While the importance of SVOD platforms grows, documentaries and niche films are no longer receiving licensing deals from Netflix, Amazon Prime, and Hulu.

Sundance filmmakers should prepare for a streaming reality without buffering. Sales agents are telling their clients that Amazon Video Direct is not expected to offer its Film Festival Stars program at this year’s Sundance Film Festival. Open to official selections at major festivals, the two-year-old FFS offered cash bonuses and preferential royalty rates for filmmakers to self-distribute their films on Amazon Prime.

According to multiple sources, Amazon has put FFS on hiatus as the company takes a hard look at its future. Distribution partners, sales agents, and the festival itself has not heard from Amazon Video Direct in months, most telling IndieWire they would be “shocked” if the FFS deal returned for Sundance.

When “streaming platform” entered the filmmaker vocabulary just a few years ago, it sounded like an indie godsend — a way to ensure that virtually any film could find an audience, if not a buyer. However, the current reality looks a lot like the old one: Rich streaming deals are reserved for the few.

FFS also skipped the 2018 Toronto International Film Festival this fall; the year prior, 100 TIFF titles took advantage of the deal, with Amazon shelling out advances of approximately $5.8 million.

“I would be very surprised if they reactivated it for Sundance, based on my sense of how that program has proceeded,” said Richard Lorber, CEO of distributor Kino Lorber, which used FFS in acquiring a number of films. “There would be signals, I think, to those of us who are in the market for the kinds of films that would be at Sundance. My understanding is that they’ve taken a hard look at it, and seeing if there’s a benefit to it from their perspective.”

IndieWire reached out to Amazon Video Direct multiple times since December 18 for this story, but emails and phone calls went unreturned.

Sales agents expect the marquee films of Sundance 2019, both scripted and nonfiction, to find an extremely healthy and competitive market. However, many are concerned the money that will be offered to films in the middle and lower ends of the market — the well-reviewed films with arthouse, niche appeal — will be significantly less compared to previous years.

When Amazon launched Festival Stars at Sundance 2017, it found tremendous skepticism from producers who criticized the “lowball” offer. At Sundance 2018, Amazon upped the cash bonuses (topping out at $200,000 for a U.S. Competition title) and extended the window between a film’s festival premiere and its Amazon Prime debut, allowing more time for a theatrical release and to monetize other windows before being available to stream for free by Prime customers.

Since then the market has also shifted, with SVOD becoming an even bigger piece of a movie’s distribution value. Meanwhile, access to the major platforms for smaller festival films has all but evaporated.

“We have found that it has been more difficult for indie films to obtain SVOD license agreements with the major streamers, including Amazon, Netflix, and Hulu,” said Danny Fisher, CEO of FilmRise, which acquired titles like “Marjorie Prime” and “Manifesto” at Sundance. Both received SVOD deals at Amazon through FFS.

Netflix has all but stopped licensing indies and documentaries, preferring to develop its own movies or buying all rights for Sundance titles like “The Kindergarten Teacher” or “Shirkers.” Amazon Prime has followed suit, moving away from output deals with indie distributors and only handing out SVOD deals for splashy titles like Michael Moore’s “Fahrenheit 11/9.”

After Steven Loveridge’s intimate portrait of international music star M.I.A. premiered last year at Sundance (where it received a Special Jury Prize), the “Matangi / Maya / M.I.A.” team felt their film was undervalued based on the all-rights offers it received from Netflix and others.

“After months of exploring options and proving our audience potential (with the 4th highest doc opening PSA in 2018), we have not been able to find an appropriate SVOD home/offer,” wrote Sara Kiener, head of distribution strategies at non-profit powerhouse Cinereach.

“I think it’s partially because the film does not align with the growth priorities for the main SVOD platforms,” wrote Kiener. “Either they’re not currently interested in acquiring documentaries, or the audience for our film is outside the current subscriber growth mandate for the platform. In a way, it seems like the film suffered because our audience overlapped too much with existing subscribers and not enough with new potential subscribers (taking into account growth opportunities outside the US).”

Courtesy of Sundance

Today, major independent distributors with output deals are virtually the only assured path for a documentary or independent film to gain access to a major SVOD platform. For smaller arthouse independent distributors, cutting a direct deal with Hulu, Amazon Prime, or Netflix has become very rare.

“For the arthouse independents, there’s no level playing field for us with larger, studio-owned independents, be they IFC or Magnolia,” said Lorber. “Companies that are vertically integrated with cable networks or theatrical chains, or studio parents like Sony Classics, all of whom have special relationships that are either direct output or quasi-output deals with major channels. Whether it’s Starz as a pay cable channel, or whether it’s Hulu as an SVOD.”

Arthouse indies like FilmRise and Kino Lorber used the FFS offer to bid more aggressively on niche and international films at Sundance, SXSW, Tribeca, and TIFF; with the assurance of the FFS cash bonus, they could offer above-average minimum guarantees. However, that may have served as a steroid that inflated the market for smaller festival films.

“It overstimulated the expectations of sales agents,” said Lorber. “They were doing what they’re supposed to do and get the best deals for their clients and help pay for the productions. So we wound up overpaying, frankly, for almost all the films that we picked up in connection with the Amazon Stars program, based on the backstop of this artificially escalated Amazon fee.”

Since that safety net supplied a high floor, FilmRise and Kino Lorber don’t believe the loss of FFS would affect its bottom lines. They point to other opportunities to monetize their deep libraries. Said Fisher, “FilmRise has been offering quality festival films licensing agreements directly with FilmRise, which then syndicates such rights to the numerous platforms with whom it has relationships — both existing and to-be-launched.”

However, for filmmakers who don’t find themselves in a bidding war, or catch the attention of Netflix, Sundance looks considerably bleaker. Lorber said he would likely be interested in the same titles, but his company would likely pay 10 to 30 percent of Amazon’s cash advance, where in the last two years it was paying 70 to 90 percent. He also said they would be more conservative with a film’s theatrical release.

Lorber added that his company’s FFS titles “significantly underperformed, in terms of the revenue-share, advertiser-based component.” However, he makes it clear that he doesn’t believe the fault lies with Amazon, describing the program as “a curious anomaly.”

Said Lorber, “We’re scratching our heads, and I’m sure the Amazon folks are. They’re all very smart. Very good people. They were very generous with both their time and their energy and their enthusiasm for the program and their love of the titles. And we spent hours with them talking about promotion, marketing ideas, and met with their publicity folks and their marketing folks and for whatever reason, it never clicked. It never built a head of steam.”

Kiener sees the potential loss of FFS as a real blow to both the theatrical and SVOD viability for independent filmmakers.

“With most audiences finding new content on platforms like Amazon, Hulu, and Netflix, I am concerned that films that can’t find suitable homes from one of those outlets — whether from the Festival Stars program or otherwise — will never even have a chance of being discovered,” wrote Kiener. “Moreover, it’s a real dilemma for anyone who may have used the Festival Stars program to finance a theatrical release, whether that’s an individual filmmaker or a smaller distributor.”

Two of the 2018 festival films that were part of Sundance’s ​Creative Distribution Initiative, which helps festival films forge effective and sustainable self-distribution paths, utilized FFS: “Thunder Road” and “306 Hollywood.” CDI director Chris Horton worries that the absence of FFS points to a market that continues to move away from the niche films and unique voices that Sundance celebrates.

“As SVOD platforms focus on original content and acquire fewer films for streaming-only rights, many independents will have challenges reaching wider audiences,” he said. “This shift in priorities, along with the demise of FilmStruck and Fandor and the absence of Prime Video Direct at this year’s Festival, underlines the need for new models for independent film to reach core fans we know are hungry for fresh, original work.”

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