The news that Annapurna, the indie-film company run by billionaire heiress Megan Ellison, is having financial trouble and is scaling back its ambitions, drives home the not-so-new reality of today’s film business: To survive, movies have to fit into either the Disney or Blumhouse model.
In other words, they either have to be big, splashy, IP-based franchises (Marvel, Star Wars, etc.) that are distributed, marketed, and cross-promoted by a mighty, global entertainment conglomerate like Disney. Or they have to be made on the cheap for a specific audience–in the case of Blumhouse, horror fans–that has a proven track record of actually going to see movies in theaters.
This month’s A Star Is Born, which is already soaring at the box office, is a rare anomaly. Made for $36 million, the film is an old-fashioned, big screen romance (albeit one with a dedicated fan base thanks to its star, Lady Gaga, and the film itself, which is the fourth adaptation).
Everything else fits into the risky bet category. In the age of Netflix, when there are more at-home viewing options than ever before, those bets only rarely pay off. The one exception is true indies that are made so cheaply that they have a shot at recouping their costs. (Even those are now often distributed by Netflix and Amazon.)
But Annapurna has never been that. Despite its auteur-friendly reputation, which is reflective of Ellison’s cineaste tastes, from the get-go the company has wanted to have it both ways: indie-sensibility films with non-indie budgets. Vice, the upcoming Dick Cheney film directed by David O. Russell, cost a reported $60 million to make. It looks great! But still.
Another upcoming film based on Roger Ailes and Fox News, has a $35 million price tag, which is the cost of A Star Is Born. The Ailes movies is in the crosshairs of Annapurna’s troubles; the company reportedly took out a completion bond to finish it and is now shopping it around to another buyer. Then there was Detroit, the Kathryn Bigelow film that cost $35 million and that Annapurna tripled its staff to 120 in order to independently release last summer. (The film bombed, grossing $16.8 million.)
With Ellison’s family resources (her father, Larry Ellison, is worth a reported $58 billion), there’s no reason to think that Annapurna is going under anytime soon. But going forward, the company will have to adhere more closely to the new Hollywood reality, however bleak it is for arthouse film lovers.
A good model is A24, an indie studio that has adapted to the times–and kept spending lean–by focusing its marketing efforts on clever, meme-driving online campaigns, and making savvy, second-window distribution deals with Amazon Prime and DirecTV. On the film production side, A24 keeps budgets below $10 million while taking chances on lesser-known directors that it believes in. The formula has paid off with films like the Oscar-winning Moonlight, Lady Bird, and Eighth Grade.
Lean companies are generally lean out of necessity. As an heiress’s vanity passion project, Annapurna has never had any necessity built into its DNA–Ellison and her father have already plowed $200 million into the company. Will it be able to shift gears and adapt to a more nimble model? Arthouse film lovers certainly hope so.