What The Success of 'It Follows' Means for Indie Film Distribution

This Monday I read an article in Forbes calling last weekend’s expansion of “It Follows” from 32 to 1218 theaters a mighty flop. Badass Digest‘s own Devin Faraci tweeted his reaction to said article…

@devincf: “IT FOLLOWS is a very good movie that made an ambitious play and it didn’t work. The movie isn’t a hit. It didn’t do well.”

I disagreed with Devin’s tweet (sorry Devin) and the article that inspired it, so I decided to counter with an argument as to why this release is not only a huge success, it is an important precedent for independent film distribution.

The Forbes article contextualizes “It Follows” as if it were a major studio film with an enormous marketing campaign. It bemoans the fact that it only made half of what [Adam Wingard’s] “You’re Next” grossed in its opening weekend and is therefore a failure.

“It Follows” was initially announced as a “compressed window” VOD release (theatrical March 13, VOD March 27) with a modest advertising budget. “You’re Next” had a $20 million dollar advertising campaign replete with billboards, bus shelters and a giant TV campaign. It went wide in week 1 on 2437 screens, more than twice that of the “It Follows” week 3 expansion. The fees to license Lou Reed’s “Perfect Day” just for the “You’re Next” trailer are likely comparable to the initial marketing budget of “It Follows.” This just isn’t a fair comparative measure.

Despite that marketing budget handicap, “It Follows” was the fifth highest grossing film in the nation last weekend. #4 was freaking “Cinderella.” “It Follows” vastly outgrossed the giant, hugely-promoted Liam Neeson thriller “Run All Night,” also in its third week of release. The $3129 per screen average was the fifth highest of all the top 20 grossing movies of the weekend.

All of this was done by a movie from an unknown director, a cast with no name recognition and a very limited advertising budget. “It Follows” is on track to gross more than $12 million dollars, is already the highest grossing film in the history of Radius, boasts a 95% certified fresh on Rotten Tomatoes and should be painted as the independent film success story of the year, not a “flop.”

I chatted with Tom Quinn (founder and CEO of Radius-TWC, the distributor of “It Follows”) yesterday to ask him if he thought the release was a success. Tom confirmed that they have been planning for the possibility of expanding this run for months and confided that they had an internal success criteria of grossing over $2 million dollars. Nearly doubling that threshold to hit $3.8 million was a huge victory and he now projects “It Follows” to have double the profit margin than the original “compressed window” release would have.

The real story here is this nimble distribution strategy deployed by Radius. When “It Follows” shattered records and posted a massive $40,000 per screen average in its first week, Radius postponed the week 3 VOD launch and opened the floodgates to quickly confirm over 1000 theaters. Many of these theaters did not have the “It Follows” trailer in rotation and yet it still racked up a $3129 per screen average.

I release films under the Drafthouse Films banner. Sometimes we release films “traditionally,” meaning a long, exclusive theatrical run followed by VOD and iTunes. More often than not, however, we release films in this “compressed-window” strategy, with theatrical, VOD and iTunes happening virtually all at once. This allows us to save money on marketing and only promote the film once for all platforms. Whenever we choose the compressed-window strategy, we know that 80% of the cinemas in the country will refuse on principle to play the film, severely hobbling the theatrical box office.

What I would love to see in the wake of “It Follows”‘ success is increased flexibility by all the major players involved: VOD platforms, cinemas and iTunes alike. Strong indie films with a chance of breaking out would begin with a 2-4 week theatrical window. If they do extremely well, the VOD and iTunes windows would be pushed back to allow the theatrical revenues to be maximized and for awareness of the film to build. At the same time, expansion market cinemas would be willing to pick up the film, provided it crossed certain revenue thresholds in its first two weeks of release. If the theatrical grosses aren’t there, the film would stick to the compressed-window strategy or maybe play in those expansion markets with just a few showtimes.

To date, the cinema industry is largely unwilling to discuss any flexibility in the way independent films are booked. I am in accord with the industry that new-release blockbusters need to have a long exclusive theatrical window. But for independent films, we need greater flexibility.

READ MORE: As ‘Snowpiercer’ Hits VOD, the Industry’s Divided on Distribution’s Future

Later this year, Amazon is proposing a slate of films developed by legendary indie producer Ted Hope. To the dismay of both cinemas and VOD providers alike, Amazon has floated a four-week theatrical model followed by a launch on Amazon Prime. I am in full support of trying out this model. I would further advocate, however, that the Amazon Prime launch date be flexible, such that if one of these titles opens as strongly as “Grand Budapest Hotel,” it can have the theatrical breathing room to crawl up to $60 million dollars in box office. We kept “Grand Budapest Hotel” on screen for six months at the Alamo Drafthouse, and it is now our 10th highest grossing film of all time.

On the flip side, some films that perform well on VOD should never play in cinemas. Currently VOD platforms require films to have a 10-market theatrical release in order to get elevated placement. Not all films deserve this. Take “The Cobbler,” for example. It has a 7% rating on Rotten Tomatoes and was called “ghastly,” “wildly ill-conceived” and “almost fascinatingly awful enough to recommend” by top critics. By no rational account is this a good movie. It is not a must-see theatrical experience. But it certainly deserves elevated placement on VOD channels. Adam Sandler’s diehard following will make it a success on VOD, and they aren’t going to be swayed by whatever the critics might say or how it performs in theaters (grosses were not reported for this title, if that tells you anything about its performance).

My hope is that “It Follows” will be remembered not just as a great new horror film but as the movie that paved the way to a new, flexible, nimble partnership between cinemas, VOD platforms and iTunes. I firmly believe that a new paradigm could benefit filmmakers and all parties involved. In the meantime, check out “It Follows” in a theater near you. It is a really fun movie and a great cinematic experience.

League is the founder of Alamo Drafthouse Cinema, co-founder of Fantastic Fest and was named by the Austin American Statesman as “one of the most unusual CEOs in Texas history.” He likes to eat really good food, drink really good beer and sing really bad karaoke but is getting slightly better at it. This post originally appeared at BadAssDigest.com and we’re republishing it with League’s permission.

READ MORE: Tim League Reveals Mega-Awesome Distribution Strategies

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