U.K. Indie Film Distribution Hits Breaking Point as ‘Santosh’ Saga Exposes Market Crisis: It’s an ‘Utter S—-show’

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As a seasoned film industry professional with over two decades of experience under my belt, I must say that the current state of independent film distribution in the UK is a challenging one, to put it mildly. The loss of support systems and funding, coupled with the ever-shifting landscape of audience preferences and consumption habits, has made navigating this space more treacherous than ever before.

Months after being well-received at Cannes, where it was shown as part of the Un Certain Regard sidebar, Sandhya Suri’s first fiction feature film “Santosh” was chosen to represent the United Kingdom in the Oscars’ international film category. This selection means that “Santosh” will follow in the footsteps of “The Zone of Interest,” which became the first U.K. film to win the award earlier this year.

The crime thriller “Santosh,” originally in Hindi, follows a widow who assumes her deceased husband’s police officer position. This movie delves into societal issues such as class, religion, and misogyny in rural India. “Santosh” garnered the Golden Frog for its debut director at Camerimage, was nominated for a European Film Award, and won two British Independent Film Awards. In France, it enjoyed a successful summer box office run with over 150,000 viewers to date. Most recently, it has been included in AMPAS’ list of international film contenders.

However, “Santosh” managed to accomplish most of it without securing a U.K. distributor in advance, as the team behind Mk2, including the producers, had spent considerable time searching for an appropriate partner.

indeed, there was a last-minute scramble near the end of December to secure an agreement and meet the deadline for BAFTA submissions. Eventually, Vertigo Releasing joined forces with Indian production house Civic Studios to get the deal done.

Despite the widespread acclaim that “Santosh” once received, I’ve found myself grappling to find a buyer for this film, an experience shared by many industry insiders. It wasn’t the quality of the movie that was holding us back; in fact, just a few years ago, it would have been snapped up almost immediately. Instead, the challenge lies in the chaotic state of U.K. distribution for arthouse or foreign language films, as two individuals have described to EbMaster. One executive succinctly expressed this predicament by stating that “the situation with ‘Santosh’ underscores the crisis in U.K. indie distribution… nobody’s buying and everyone is incredibly cautious.

Santosh might not be unique in this regard, but he certainly stands out. The Zambian sophomore feature from BAFTA nominee Rungano Nyoni titled “On Becoming a Guinea Fowl,” which is a follow-up to her critically acclaimed debut “I Am Not a Witch” (the U.K.’s Oscar submission in 2018), was one of the most talked-about and well-received films at Cannes this year. In previous years, such highly praised movies often found distribution deals before the festival even started. While A24 secured the film’s rights for the U.S., a deal with Picturehouse Entertainment in the U.K. wasn’t finalized until October.

Danny Perkins, previously in charge of StudioCanal UK and now leading Elysian Film Group’s distribution and production, highlights several issues that have escalated in the U.K. These include a long-standing tradition of cinema ticket revenues favoring cinemas over distributors, an underperforming Pay-One window for less mainstream films compared to other markets, and Video On Demand (VOD) failing to compensate for the drop in DVD sales revenue. Furthermore, he mentions that these challenges occur against a backdrop of reduced income from content sales, while the cost of content continues to rise, causing distributors to earn less money.

The film titled “Santosh” wasn’t produced in the UK, but was co-produced by BBC Film, similar to “On Becoming a Guinea Fowl”. This arrangement means that local television rights for distribution were unavailable, as they were already held by the BBC. As one executive explains, there has been a conflict between funders (like BBC Film and Film4, who are among the primary financiers of independent films in the UK, along with the British Film Institute) and distributors regarding this issue. Essentially, the BBC and Film4 argue that claiming free television rights is their responsibility, while the distributors claim they won’t purchase these films if they don’t have TV backing. They fear investing £100,000 in marketing (P&A) without the security of television distribution to support it. The question then arises, who else will finance these films?

In most cases, pay TV services do not purchase non-English language films. This means that for a film like “Santosh,” an art-house foreign language production supported by BBC Film, the only viable option for distribution is through theaters.

In the United Kingdom, it’s becoming more challenging for independent films, particularly those lacking star power or significant backing from a major distributor, to gain traction in the theatrical market.

2023 witnessed a significant decline in the U.K. box office revenue for independent films, falling nearly half compared to 2022 and accounting for merely 3.8% of the total earnings. A cursory look at the list for this year reveals a market predominantly controlled by Hollywood studios. Out of the top 50 films in 2024, an overwhelming 46 were distributed by these major studios, with only StudioCanal’s “Paddington in Peru” (a film that isn’t typically categorized as indie or arthouse), managing to crack the top 25.

However, when it comes to this specific situation, the U.K. seems to be an exception among significant European markets, as other large box offices across the continent have experienced multiple non-studio successes. For instance, in France, films like “A Little Something Extra” and “The Count of Monte-Cristo” are leading the 2024 charts, while Germany has seen films such as “Chantal in Fairyland” and “School of Magical Animals 3” climb into the top 10. Italy’s box office saw “The Boy With Pink Trousers,” “Un Mondo a Parte” and “Parthenope” make it into the top 15, with “There’s Still Tomorrow” continuing to do well in 2023.

Based on the words of a sales representative from the U.K., the situation has become so dire that if the distributor were to acquire another independent British film title, it could lead to an employee revolt. The staff expressed their intention to resign, as they have invested immense effort in monetizing these films, only to suffer losses instead.

For Zygi Kamasa, the former Lionsgate UK head who last year launched distribution and production banner True Brit Entertainment, the U.K. market has fallen into two camps, with the arthouse and foreign language sector — which heavily relied on ancillary revenues that are now no longer there — definitely the one that is struggling.

In the digital realm, entities such as Sky, Amazon, iTunes, and Google typically prioritize the most popular 30 titles. Furthermore, traditional pay-TV partners like Netflix, Amazon, and Sky are not significantly purchasing these films, and if they do, the compensation is minimal,” he explains.

In terms of independent British movies, it’s primarily the larger-scale, more commercially oriented films that continue to find an audience, but these opportunities are relatively scarce. Kamasa cites StudioCanal’s upcoming releases “Back to Black” ($15.7 million box office) and “Wicked Little Letters” ($12.1 million) as illustrative examples. He notes that these films perform well in cinemas, have a place on pay TV, and are desired by streaming platforms; however, he emphasizes the widening gap for mid-budget indies. He explains that this market is becoming increasingly fragmented, with films too small to be commercially successful but not small enough to qualify as low budget, leaving little room for them in the marketplace.

In 2007, while at Lionsgate, Kamasa played a significant role in the release of the German-language blockbuster “The Lives of Others,” which grossed approximately $5.5 million from U.K. box office sales. He adds that the film also sold numerous DVDs. However, he believes that it wouldn’t achieve the same success today and probably wouldn’t have had the lasting impact on ancillary markets as it did back then.

There’s also a degree of uncertainty among the U.K.’s distributors.

For several years, Curzon and Picturehouse have been recognized as premier venues for art films, including many festival favorites. This year, Curzon even enjoyed a local triumph with the Irish hit “Kneecap”. However, both entities have found themselves entangled in financial troubles that extend beyond their primary operations.

Last month, Curzon, which is part of a collective including Curzon cinemas and a streaming platform, was purchased from the Cohen Media Group at a foreclosure auction by U.S. investment firm Fortress. It appears that Fortress has no intention of retaining Curzon but instead aims to sell it off in the future, similar to how they sold the Alamo Drafthouse chain to Sony earlier this year.

In the ongoing saga, Picturehouse, a cinema chain, finds itself caught up in the issues surrounding its parent company, the global theater titan Cineworld. Recently, Cineworld shuttered six cinemas in the U.K., as part of a significant financial restructuring plan guided by its hedge fund investors. However, for quite some time, there’s been uncertainty about Picturehouse’s future within this conglomerate.

According to a distributor, this sector isn’t particularly robust. It seems that there’s a lot of uncertainty surrounding its performance.

Mubi is making a substantial impact in the theater scene (it almost made it to the top 50 movies in the U.K. for 2024 with a revenue of $4.5 million), yet as one producer notes, it doesn’t acquire too many films.

Moving forward, smaller distribution companies like Modern Films, Studio Soho, and Conic are well-respected for promoting a diverse collection of low-budget arthouse films. However, they lack the necessary strength or resources to effectively promote films aiming for successful theatrical releases or award recognition.

Although I really like them,” a producer notes, “are you certain that this will fulfill your requirements for the release?

Assistance is now available for distributors through the British Film Institute’s Audience Projects Fund, which aims to back “bold, audience-focused independent UK and international films” by providing grants. However, this fund has received criticism due to changes in its eligibility criteria, including a new rule that prohibits distributors who are over 50% owned by non-UK companies or individuals from applying. This effectively excludes Curzon (a company with its own streaming platform, which also fell foul of the BFI’s rule that films can’t receive funding if they release simultaneously).

Filmmakers are now calling for more intervention.

Leaving the EU has taken away all the backing systems previously provided by Creative Europe for U.K. distributors, and even some from the British Film Institute, according to one source. It seems they are in need of some kind of support now.

However, it’s important to note that not everything is negative. The exhibition titan Vue took a step into UK distribution this year with the successful release of the Italian film “There’s Still Tomorrow”, and as a result, they have now officially established their own distribution label, Lumiere.

According to Tim Richards, founder and CEO of Vue, our hypothesis was confirmed: there’s a significant interest in watching certain movies on large screens. Currently, they are selecting additional titles for the UK market. The focus is on smaller films with lower budgets, encompassing British, independent, and foreign language productions. Their aim is to distribute approximately 12 such films annually in the UK, with plans to extend their operations to other Vue markets across Europe.

Unlike other distributors, Lumiere benefits from the backing of the U.K.’s largest theatrical chain, a scale that Richard intends to leverage for marketing Lumiere’s movies with minimal promotional spending. Additionally, they plan to utilize Vue’s in-house AI technology to decide where and when these films will be shown.

According to Richard, there’s a tendency for people to create a “self-fulfilling prophecy” when it comes to doubting the success of independent films in the U.K. box office. He argues that there’s a common belief that audiences are no longer interested, which leads to these films not being shown. However, he points out that when these films are screened, they often prove to be successful.

There’s a sense of hope that the current predicament is simply another hurdle in a line of difficulties the independent film industry has previously encountered and surpassed. As Perkins puts it, “Over the past 25 years or so, there have always been obstacles.” Yet, he adds, “There’s always an audience out there,” and the independent sector consistently manages to create tales that captivate and enthrall them. This, in fact, is what makes distribution so rewarding.

Thanks to advancements in digital technology, entering and thriving in markets has become significantly easier compared to the past, and connecting with audiences has never been more accessible.

According to Perkins, the task at hand for distribution is understanding the fresh economic dynamics of the sector, he explains.

For numerous individuals, such as “Santosh,” who seems to be right in the thick of the U.K. independent distribution turmoil, the current predicament is one of the most difficult they’ve encountered. As a producer who experienced a similar battle to secure a platform for his feature film puts it, “It’s an incredibly complex landscape, and it’s just getting more and more challenging.

But the crisis has at least provided one source of optimism.

“I mean, it has to bottom out,” says a distributor. “Because it can’t get any worse!”

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2024-12-20 16:17