Stuart Ford, Chairman and CEO of AGC Studios, is a film industry veteran who has seen the independent sector reach incredible heights. And in recent years, he has seen it struggle.
In the latest episode of Variety’s “Strictly Business” podcast, Ford takes a deep dive into the challenges facing the independent film sector amid shifts in the financial model of production and major shifts in movie-going habits, especially among younger audiences.
But Ford’s AGC Studios banner continues to maintain a busy schedule of independently produced theatrical releases. His company provides a patchwork of services for creative talent, from financing to physical production and distribution. AGC came to Sundance this year with the family-friendly title Fing! The film, starring Taika Waititi, premiered in the festival’s Family Matinee section.
“We are fortunate in that we have both the self-financing and sales capabilities within AGC Studios. We are one of the fortunate few in the independent sector to be able to bring some of our own projects into production,” Ford says. “That doesn’t mean we have complete discretion to decide that. Obviously there are financial parameters and creative parameters that we have to be very careful about. We live in an area that’s pretty much abandoned. Usually we’re making intelligent films for adults, usually through relationships with established filmmakers and established filmmakers, but there’s always, hopefully, commercial potential at the end of the rainbow.”
Ford emphasizes the opportunity to bring original work to the big screen that has a targeted market and is accessible to people other than arthouse enthusiasts.
“I think this is where the independent film sector will continue to thrive and continue to find its role within the broader ecosystem, by producing films that have an identity that audiences can discover,” Ford said.
The challenges surrounding moviegoing in the post-corona era have coincided with a sharp decline in the so-called pay-per-window, or the fees networks and streamers around the world pay for a title’s first television exposure.
Stuart Ford (Photo by Pierre Hsu/Variety via Getty Images)
Variety (via Getty Images)
“Contrary to the popular belief that independent film is dead, I believe that independent film is far from dead. To some extent, I think that independent film is shedding its old skin and moving into a new era, if you like. However, there are economic issues that cannot be ignored, no matter how rosy a lens is. “There are a lot of economic and financial realities that have increased production costs significantly in recent years as the cost of goods and services and streamers have driven up their production costs. Meanwhile, the revenue stream for independent films remains,” Ford says.
“Financing structures have had to become more complex. Obviously, soft money and local incentives are still there. Bank financing is still available for pre-sales, but as pre-sales have become harder to obtain, financiers are having to rely more on gap financing. Gap financing can be expensive and take on more equity risk, so the increased cost of capital and risk exposure is currently preventing more capital from entering the market, and we need to address that.”
In its heyday, Ford made a name for itself as the top international buyer of Miramax film, and later launched IM Global. AGC Studios was founded seven years ago and has weathered some ups and downs, in part due to its foray into scripted and unscripted television.
“We’re very prolific. We made five or six films last year. We’re going to start producing three films in the first quarter of this year,” he says. “It still works for the right projects built in the right way, but I think the bullseye has definitely gotten smaller and the risk is now being front-loaded to producers and financiers more than it needs to be.”
Ford has clear ideas about what it will take to rebuild the independent film sector, which is so important to creative communities in places like Hollywood and New York.
“If we can somehow get to a situation where streamers pay more meaningful license fees for the post-theatrical pay-one window, the whole independent sector could be revitalized very quickly,” Ford said. “The cause of the U.S. economic downturn is streamers’ reduced appetite for these films, or certainly their reduced willingness to pay, market-rate license fees.”
(Photo: Taika Waititi in Finn)
“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. (Click here to subscribe to our free newsletter.) New episodes are published every Wednesday and available for download on Apple Podcasts, Spotify, Amazon Music, and more.
