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New York's Independent Film Community Goes From Boom to Bust

My Big Fat Greek Collapse

"When a seed gets put in the ground, you water it."

That's how New York producer-screenwriter James Schamus once described (in these pages, in 2002) the natural evolution of his independent film company, Good Machine, from being a scrappy upstart in the early '90s to becoming a subsidiary of multinational conglomerate Vivendi Universal. Schamus's fertile take on indie film's growth defined much of the decade, as more and more corporate entities entered the field and an increasing number of non-Hollywood films reaped blockbuster-size sales, most notably Crouching Tiger, Hidden Dragon ($128 million, 2000, Good Machine's biggest success), My Big Fat Greek Wedding ($241 million, 2002), Fahrenheit 9/11 ($119 million, 2004), The Passion of the Christ ($370 million, 2004), and Juno ($143 million, 2007).

Today, Schamus's former partner at Good Machine, Ted Hope, offers a different visual analogy for the last decade—with the benefit of hindsight: "It's like the ostrich with its head in the sand."

Not unlike Wall Street's own irresponsible rise and fall, the '00s saw a reckless increase of production and marketing expenses, as the corporate-fueled aspirations of "specialized cinema" reached ever-loftier heights.

"There was an inflation of many, many kinds that took place in the first half of the decade," says veteran distribution exec Mark Urman, who has personally felt the repercussions of the over-expansion as much as anyone. In 2001, Urman co-founded THINKFilm—a boutique company that took on risky projects such as Gus Van Sant's Gerry and John Cameron Mitchell's Shortbus. Five years later, aggressive L.A.-based entrepreneur David Bergstein purchased THINK as part of his broader media ambitions; subsequently, he was sued for fraud and drove the whole unit to collapse last year. "We chose to believe that we stood apart from that [economic excess] because we were in an artistic milieu," admits Urman. "But I'm sure if you looked around, we had our own Bernie Madoffs.

"It's like in those big, corrupt churches, where it's all about glitz and money," he adds. "But what does all that have to do with God?"

The most widely recognized blasphemy was Paramount Vantage's costly art-house epic There Will Be Blood. Critics and audiences may remember Paul Thomas Anderson's movie as one of the best of the decade, but the reported $80-million-plus production and marketing costs raised eyebrows across the industry. (The Motion Picture Association of America reported in early 2008 that the average price tag to produce a specialty film had leapt 60 percent over the previous year, to $49.2 million, while advertising expenses jumped 44 percent, to $25.7 million.) In 1994, Pulp Fiction cost roughly $18 million to make and release.

Now, in what Urman calls a "really strong-coffee, cold-shower moment," all of that has changed, as financial and technological shifts have disemboweled the indie industry that corporations and investors had spent the decade puffing up.

In the past 18 months, New York, once the thriving center of independent film, has lost much of its economic base. In mid-2008, Time Warner cleaned house, downsizing longtime East Coast subsidiary New Line Cinema (once famous for releasing John Waters movies) and closing both NYC-based indie label Picturehouse (Pan's Labyrinth) and L.A. division Warner Independent Pictures (March of the Penguins). More recently, longtime art-house company New Yorker Films ceased operations, while Disney shuttered the Gotham offices of Miramax Films, once the most recognizable name in independent film. Miramax's title logo, showcasing the Manhattan skyline, will now live on as a bitter reminder of long-gone glory days.

"It's insane that you can count the number of companies buying [films] on one hand," says veteran New York producer Christine Vachon, whose latest collaboration with Todd Haynes—the filmmaker who helped define American indie cinema with Poison and Safe—will be a miniseries for the small screen of HBO.

With the inevitable decline of the DVD, a glut of productions, and changing audience-viewing habits, it was only a matter of time before the Pollyanna-ish art-meets-commerce model that spurred on specialized cinema would come crumbling down. And without studio dollars to cultivate new talents, today's indie filmmakers, many too young to remember when the industry was nascent, are struggling.

Forced to do more for less, up-and-comers like Jay Van Hoy and Lars Knudsen (producers of Kelly Reichardt's Old Joy), for example, survive by staying insanely prolific—they've made more than a dozen films in just three years—with budgets as low as $20,000. Though Van Hoy and Knudsen's Parts & Labor is based in Brooklyn, Van Hoy admits that living in New York is important to him personally, but "professionally, I don't think so. It's not populated by the number of distribution companies, and that's what drove the production community here 10 years ago."

Though producer Hope remains in New York with his current company This Is That, he acknowledges that, for the emerging artist, the costly city is no longer a necessary expense. "The center of independent film is not a geographical context," he says, "but a communicative instrument: the Internet."

If new technologies are going to save the indie film industry—Vachon says filmmakers need to stop "fetishizing" the "dinosaur mentality" of the big screen and embrace seeing their movies released via iPod—the arrival of a new low-cost, high-return, all-digital paradigm has not yet arrived.

Richard Lorber, whose art-house label Lorber HT Digital recently merged with indie giant Kino International, characterizes the current situation as "unnerving," where "everybody is looking down field at the digital future, but the business models and the pricing structures have not crystallized in a way that anyone can monetize their assets effectively.

"We may be going back to the pre-boom era," continues Lorber, "where there was no safety net of home video or TV sales." As for Video on Demand, which many see as indie film's savior—including companies such as Cablevision's IFC Films and Mark Cuban and Todd Wagner's Magnolia Pictures, which admittedly have had a strong year due to VOD sales—Lorber says it's relatively inconsequential for most art films. "The big VOD channels are controlled by a handful of cable monoliths that are limiting the access due to their bandwidth constraints and pushing their own content."

There may be some silver linings in the current period of downsizing and disorder. Without corporate meddling, indie films could get bolder, riskier, and more fun—like they were before the big studios noticed their market potential. The shared sense of befuddlement is also strengthening the ties among the industry's survivors. "There's a lot of vibrancy among the people that are still working," says David Fenkel, co-founder of fledgling outfit Oscilloscope Laboratories, one of the few art-house companies to emerge during this unhinged transitional period. And, collectively, everyone is looking for new ways forward.

To bolster the troops, Hope Twitters near-daily affirmations ("technological changes are propelling cinema into a new & glorious age of visual stoy-telling [sic], open access, and deep relationship w audience"). And even Urman is staying optimistic. After a stint in L.A. at another now-defunct company called Senator Distribution, Urman is back in New York working as a distributor-for-hire. "Given the cyclical nature of the business," he says, "the more homogenized and big and noisy Hollywood films get, the more people will want to see independent films. So we should be entering the greatest moment for independent film in a decade."

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