Historically, independent production companies have been poorly capitalized, raising money for one film at a time, and wielding no influence over distribution in a highly competitive industry. The best-case scenario for many of these companies was to negotiate a deal with a major studio, either for an outright sale or for distribution purposes. However, in all cases, the studios always had full discretion over distribution budgets and marketing campaigns.
Since the films have to compete with the studios’ own productions, some ninety percent of independent films are never distributed, and even those that are, often suffer from an under-funded distribution effort that fails to maximize the film’s profit potential. For instance, at the 2010 Toronto Film Festival, there were only a few acquisitions as high as $1-2 mm per movie. Studios know that the film production companies have no alternative but to sell the movie, because they are not funded or set up to deal with its distribution. Such small transaction values would preclude the profitable production of a picture with any kind of creative or artistic talent.
However, even those few movies that do get sold struggle to compete with the studios’ internal productions. If a major studio has its own $5-10 mm film, and an independent film it acquired for $1-2 mm, then it is clear where the studio would focus its priorities. Even the major production companies such as Legendary Pictures, or Spyglass Entertainment that have distribution deals with major studios still lack control over how their film will be promoted, and whether the allocated P&A spending will enable the film to realize all of its revenue potential.
By funding and guaranteeing distribution for our films on 500 to 2500 screens, we are aiming to create a diversified business model that captures value throughout the supply chain that has previously been given away due to a lack of planning or funding. We believe that this will differentiate Vistar Pictures from prior ventures and also make it a highly attractive venue for outstanding filmmakers that want to maximize the financial reward from their work.