.png){kind=logo}
Stuart Ford, chairman and CEO of AGC Studios, is film industry veteran who has seen the independent sector rise to incredible heights. And in recent years he has watched it struggle.
On the latest episode of Variety‘s “Strictly Business” podcast, Ford goes deep on the issues that the indie film sector faces at a time of shifting financial models for production and major changes in moviegoing habits, particularly among younger audiences.
But Ford’s AGC Studios banner has maintained a busy slate of indie-produced theatrical releases. His company provides a patchwork quilt of services to creative talent, from financing to physical production to distribution. AGC headed to the Sundance Film Festival this year with a family title, “Fing!” starring Taika Waititi that premiered in the festival’s Family Matinee section.
“We’re lucky in as much as we have both a self-financing and a sales capability within AGC Studios. We are one of the privileged few in the independent sector that to some extent can drive our own projects into production,” Ford says. “That’s not to say we have carte blanche to do it. Obviously, there are financial parameters and creative parameters that we have to pay very, very close attention to. We really live in the space that’s been largely abdicated by the major studios, which is making intelligent films for adults for the most part, usually via established filmmakers and established filmmaker relationships, but always, hopefully with commercial potential at the end of the rainbow.”
Ford emphasizes that there is opportunity for original material on the big screen that has a targeted market and accessible to more than arthouse lovers.
“I think that is really where the independent film sector is going to continue to find success and continue to find a role within the broader ecosystem, which is by creating films that have an identity that audiences can discover,” Ford says.
The challenges around moviegoing in the post-COVID era have also coincided with a steep drop in the fees paid by networks and streamers around the world in the so-called Pay 1 window, aka the first TV exposure for a title.
“Contrary to popular belief that independent film is dead, I think it’s far from dead. I do think to some extent it is shedding its old skin and moving into the next incarnation, if you like. But there’s a number of economic and financing realities that no amount of rose tinted lenses can can ignore. Production costs have gone up significantly in recent years, both because of cost of goods and services, and because, the streamers drove up those production costs. Whilst for independents, revenue streams have remained stagnant. So we’ve had the unholy situation of budget inflation meeting buyer conservatism,” Ford says.
“Financing structures have had to become more complex. Obviously, we still have soft money and regional incentives. There’s still bank financing available for pre-sales, but as pre-sales have become tougher to obtain, financiers are having to lean more heavily on gap financing, which can be expensive money and take more equity risk. So that increased cost of capital and risk exposure is deterring a lot of capital from coming into the marketplace right now, and we have to address that.”
Ford made his name as a top international buyer for Miramax Films in its heyday and then went on to launch IM Global. AGC Studios was formed seven years ago and has navigated the choppy waters in part by expanded into television, both scripted and unscripted.
“We’re very prolific. We made five or six films last year. We’re going into production on three films in the first quarter of this year,” he says. “It still works for the right projects that are constructed in the right way. But the bullseye definitely got smaller and I think the risk is currently front-loaded onto producers and financiers more than it should be.”
Ford has a clear idea of what it will take to rehabilitate the independent film sector that is so vital for the creative community in Hollywood, New York and beyond.
“The whole independent sector could light up very quickly if we could somehow get to a place where streamers are paying more meaningful license fees for that Pay 1 window post theatrical,” Ford says. “It is the decline in appetite of the streamers for those films — or certainly decline in appetite to pay — what I would say are market-rate license fees that has caused the slowdown in U.S.”
(Pictured: Taika Waititi in ‘Fing!’)
“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. (Please click here to subscribe to our free newsletter.) New episodes debut every Wednesday and can be downloaded at Apple Podcasts, Spotify, Amazon Music, and more.
English (US) ·