How is COVID-19 (Corona Virus) going to affect indie film? That is the million dollar question for most writers. The most common answer is “no one knows”,for me that is a lazy and pathetic response. Well I am going to put my flag in the ground and state what I believe will happen. I am going to give you an intelligence type assessment, that will give you some inferences and points to watch.
Environment scan for COVID-19 and the film industry.
Let’s look at the film industry from script to viewer. We will then look at the different actors in these areas.
1. A script is created.
This is normally driven by a producer. They own a property and they engage a writer to create the script. There are other ways, such as spec sales, but predominantly writers are bought into a project.
2. The film is made.
This sounds like a huge part of the process and it is. But we are looking at the effect of COVID-19. We are going to say this huge section will be effected as a group.
3. The distribution model.
Is it going for a major cinema release, limited screens or straight to streaming? This will impact on the MARKETING which can be a major cost in the distribution.
4. It is released.
Now depending on the distribution strategy will dictate on where.
COVID-19’s effect on the return on investment.
When a film is released in the cinema, the cinema gets half the ticket price. So lets say a ticket is $20 (simple maths), the studio gets $10 and the Cinema gets $10. The cinema is keen for blockbusters, they want every seat filled and the more popcorn eaters the better. The best way to guarantee a blockbuster is a big budget extravaganza or a hugely popular existing property, Harry Potter or Marvel spring to mind. Some more maths, $200,000,000 to make a blockbuster, same again in marketing. So the studio needs a billion dollar box office. Half goes to the cinema leaving them $500,000,000 less the $400,000,000 cost, leaving them $100,000,000.
When a film goes to streaming the math is much different. Marketing is far less. Because the streaming service will also market that they have the movie to attract subscribers. The studio also gets a far bigger chunk of the rental. So for a $9 rental the studio gets around $7. They can also release it worldwide at the same time. There is also no physical restriction that there are with cinemas. You could have a months worth of viewers in the first day. We needed 50,000,000 people at $20 to reach our billion. If other same people rent it. The return to the studio is $350,000,000 with less marketing. The return on investment is much shorter and they can get to the long term streaming money sooner.
What event are we looking for in the COVID-19 recovery?
If cinema doesn’t bounce back we will see a big shift. With the decline of cinema, we will see the long predicted rise of streamers as first choice distributors. This means that studios will go to streaming first. This will speed up the demise of the cinema, starving them of blockbusters.
So how does that affect screenwriters?
Now that studios get their money back quicker, means they will invest it quicker. It is better in business to have a high turnover with many small predictable and safe profits. Having a number of small investments also spreads the risk.
I can see the studios moving towards this as the big risk blockbuster becomes hard to distribute as cinemas continue to decline, assisted by the lack of blockbuster support.
We will see the return of the mid range film. The $50,000,000 films will make a comeback. The genre I cannot predict. But I am seeing an increase in the number of productions at a lower cost.
More productions, means for scripts, which means more opportunity for writers.
This is a less firm inference. I can see this having a trickle down effect. More direct to streaming blockbusters means more viewers. Which means an increase across all sectors. So more people watching the smaller indie films. Which in return would increase the ROI opportunity, driving more low budget and indie films. This will also level the playing field, allowing great low budget films to be seen on the same platform as a Marvel giant.
So, if my prediction that cinema may never recover comes true. It is a good thing for writers as the death of cinema will open the immediacy of streaming to more producers and this will drive the need for more production in the same way that Video did.
So it is true that no one knows. But we can make a good guess and get ready for it.