The motto in Hollywood is go big or go home. Few major studios are willing to take shots on low- to mid-budget movies anymore.
Focus Features (owned by Comcast) and Fox Searchlight (owned by Rupert Murdoch’s 21st Century Fox), the last two major studio labels still putting out those kinds of movies aimed at adults, are being forced to pivot away from buying finished films, the Wall Street Journal reported (paywall), citing people close to the companies.
Acquisitions of finished films like Loving and The Birth of a Nation were once pivotal parts of Focus and Fox Searchlight’s businesses, respectively. Other major studios like Disney, Paramount Pictures, and Warner Bros. have dropped out, too, the WSJ said.
And it’s because competitors like Amazon and Netflix have driven the market for indie fare so high that they can no longer afford to vie for top titles. The deep-pocketed streaming services have swung into prestigious festivals like Sundance in recent years and scooped up the most sought-after features, like the Oscar-winning Manchester by the Sea, which Amazon acquired at Sundance in 2016, and the upcoming Netflix release Mudbound, a 2017 pick.
Amazon also offered filmmakers bonuses of up to $100,000 for two-year streaming rights to official 2017 Sundance selections, in addition to royalties—giving titles that didn’t land a deal a de facto home.
The competition has pushed Focus and Fox Searchlight to produce more movies themselves, which they can then distribute. The WSJ reported that both Focus and Fox Searchlight are now looking primarily to produce movies themselves and look to develop long-term relationships with filmmakers, such as Focus’s latest release, Atomic Blonde, a spy-thriller starring Charlize Theron, which was produced with Sierra/Affinity.
There are some filmmakers who, despite the creative freedom and fat paychecks offered by Netflix, won’t work with the streaming service. Nate Parker reportedly turned down a $20 million offer from Netflix for The Birth of a Nation in 2016, and took Fox Searchlight’s $16 million bid, because he thought the studio was a better fit. Netflix, notoriously, doesn’t offer the wide theatrical releases most others do, which has spoiled old-school filmmakers like Christopher Nolan on the service. (Amazon is a different story.)
This is where studio labels like Focus and Fox Searchlight, and independent shops like Annapurna Pictures still have an edge. The independent production company founded by Megan Ellison, daughter of billionaire Oracle founder Larry Ellison, began distributing films this year—starting in the mid-market adult genre. Its first release is Kathryn Bigelow’s hard-hitting Detroit, which was made on a $30 million budget, and goes wide in US theaters this weekend.