The international banking sector isn't the only industry being whiplashed by a sub-prime crisis. As the Toronto International Film Festival kicks off its biggest weekend of screenings and sales activity today, ghosts are haunting the gala parties and deal rooms, threatening to spoil the annual celebration of world cinema.
The independent film scene, which has been commercially dominated in recent years by the niche arms of major studios that kept TIFF stocked with films and the stars in them, is in free fall, a victim like the U.S. real-estate market of irrational exuberance on the part of buyers.
Former festival stalwarts are shutting down or scaling back. Filmmakers are anxious over lower up-front guarantees from distributors. And while TIFF is keeping its chin up, the long-term effects of the industry upheaval may not be known for years.
"I think everyone has to work harder than they were working before," said Josh Braun, a sales agent specializing in documentaries who was also an executive producer of David Cronenberg's A History of Violence.
"And everyone was already working pretty hard."
For more than a decade beginning in the early 1990s, commercially oriented independent film distributors were the cool kids in Hollywood, flooding festivals with cash and making big bets that often brought home Academy Awards.
Led by the mercurial Harvey and Bob Weinstein, Miramax Films set the pace with its mastery of marketing, launching its breakout film The Crying Game in 1992 at TIFF and going on to spend freely on other unlikely hits that became Oscar bait, like Il Postino (a TIFF 1994 alumnus) and The Cider House Rules (TIFF, 1999). But though the industry believed Miramax had developed a workable financial model, the company in fact spent recklessly on scores of other acquisitions that failed to ignite much interest, such as the whimsical Sundance comedy Happy, Texas, which earned less than $2-million at the box office despite a $10-million acquisition price tag.
Still, the splashy successes beguiled Disney into buying the company and spurred other studios into creating their own "mini-majors," that were designed to operate more efficiently and creatively than the bloated parent companies. But few lived up to their early promise. Over the last few months, three so-called mini-majors owned by Warner Bros. Pictures have shut down or been stripped of their freedom by the parent company, which has renewed its focus on big-event pictures, like this summer's Batman sequel The Dark Knight.
The mini-majors are New Line, which spun gold with the Lord of the Rings trilogy but lost more than $100-million on the special-effects flop The Golden Compass; Picturehouse, the art-house division co-owned by HBO and New Line that was behind last year's Oscar-winner La Vie en Rose; and Warner Independent Pictures, which released the earnest Paul Haggis war drama In the Valley of Elah and made a small hit out of Good Night, and Good Luck.
Last week, Warner Independent, which had been in business for less than five years, was forced to offload this year's TIFF film Slumdog Millionaire to its competitor Fox Searchlight because its bare-bones staff is not equipped to handle the distribution of the film, which after screening at the Telluride Film Festival last week now looks like it may be a feel-good hit of the fall.
In addition, the Paramount Pictures division Paramount Vantage is scaling back, proving that even awards don't keep the bankers at bay: The studio was behind both There Will Be Blood and last year's best-picture Oscar-winner, No Country for Old Men.
The subject of last year's big bidding war at TIFF, Helen Hunt's directorial debut, Then She Found Me, received a warm critical reception when it was released last spring. But it took in less than $4-million at the box office, and its U.S. distributor, ThinkFilm, is in chaos.
And the Weinstein brothers, who left Miramax in the hands of Disney three years ago, are running an unspectacular operation that has not yet had a major success. This year, they will bring only one film to TIFF, Kevin Smith's Zack and Miri Make a Porno, which seems unlikely to challenge for Oscar.
The veteran filmmakers who are in Toronto for this year's festival are coming with a diminished set of expectations. Jeffrey Levy-Hinte, a producer of narrative and documentary fare who has brought a number of films to TIFF in previous years including Mysterious Skin and Laurel Canyon, is here with the docs The Dungeon Masters and Soul Power.
Nowadays, he said, independent producers often have to become partners in the release of films with distributors, working the festival circuit to whip up interest.
Levy-Hinte added that, too often, so-called indie filmmakers have not offered true alternative fare. "I think independent filmmakers have done themselves a pretty large disservice by trying to emulate others," he said, noting that for years after the critical success of Reservoir Dogs, many indie filmmakers made gritty dramas. Little Miss Sunshine spawned its own whimsical imitators.
Even filmmakers who are lucky and talented enough to walk a rare path, seeing their film distributed in theatres and nominated for an Academy Award, are finding it's hard to turn a profit. This week, the producers of the Iraq war documentary No End in Sight released the Oscar-nominated movie onto YouTube, where it can be seen for free until Nov. 4, the day of the U.S. election. While something other than commerce drove their decision to make the film in the first place, even the $1.2-million the film took in at the U.S. box office didn't help clear it into the black.
Audrey Marrs, one of the film's producers, noted that the film had launched to great acclaim at Sundance. Still, she said, "I was formerly an indie rocker, and just because you get a lot of press doesn't mean you necessarily sell a lot of records, and I think it's sort of the same in the world of film."