This is clearly a boom period for independent films, with many independently produced films enjoying critical and commercial successes. Along with many corporations in the United States, the major studios began the radical process of restructuring or “downsizing” in recent years. While in the past they all maintained expensive production facilitates and significant overhead expenses, the impact of unions and guilds and runaway productions forced studios to adopt new business models.
The major studios are releasing fewer films, but expect greater gross revenue per film. As a consequence, smaller production companies with lower-budgeted films have been able to acquire a bigger share of the market. Large film budgets have not guaranteed success whereas smaller-budget, well-written independent films have realized phenomenal returns. The Blair Witch Project, My Big Fat Greek Wedding, Napoleon Dynamite and Saw are examples of smaller independent films that have scored big at the box office.
The successes of these and other moderately budgeted films have hastened a change in the structure of the industry, with all the studios creating specialty divisions to produce or procure lower-budget independent films with high production values.
Crown Baus believes that there are several convergent trends that should contribute to improved economics for the motion picture business over the next several years.