“Josephine,” a gripping drama about a young girl who witnesses a brutal assault, was the toast of this year’s Sundance Film Festival. Not only did critics praise Channing Tatum and Gemma Chan for their performances as parents struggling to help their traumatized daughter, but the film won the festival’s audience and jury awards. It seemed like “Josephine” was destined to land at an established indie like Neon or A24 or, barring that, a streaming giant like Netflix. Instead, it wound up at Sumerian Pictures,
a newcomer to Hollywood.
“The film is a real standout in lots of ways,” Rob Williams, president of content strategy at Sumerian, says. “And that’s what you look for as a new distributor — things that can stand out. As a new company it made a statement.”
The film business may be in freefall, beset by box office struggles and corporate consolidation that’s left Hollywood with fewer studios, but more than a half-dozen distributors like Sumerian have debuted in the past two years, hoping to take advantage of all the upheaval. There’s Row K, which has nabbed Gus Van Sant’s “Dead Man’s Wire” and a reboot of “Cliffhanger.” And then there’s Black Bear, the production company behind hits like “I Care a Lot” and “Sing Sing” that recently decided to release the films it makes instead of selling them to other studios. The companies are looking to back six to 12 movies annually, many of them mid-budget comedies and thrillers — the kind of films that studios
have abandoned in favor of video game adaptations and superhero adventures.
“It’s very apparent to us that there’s a hole in the market,” says Christopher Woodrow, co-chairman of Row K. “The common judgment is that no one’s going to the theaters anymore, but what the numbers show is that people are coming back to cinemas — there’s just not enough stuff out there for them to
see.”
Other new U.S. distributors include 101 Studios, the production company behind “Yellowstone,” which is making the leap into releasing films, as well as arthouse label 1-2 Special, which recently acquired the Charli xcx film “Erupcja.” Add to the mix, EKKL Entertainment, which is focused on faith-based fare and uplifting stories such as the Steve Zahn dramedy “She Dances.”
“I think people need some lighter content, some inspiring content that brings families together versus showing the worst of humanity,” says Michael Scott, the founder of EKKL Entertainment.
It’s hard to understand what’s behind the sudden influx of startups. These days any sector of the film business is difficult to navigate, but film distribution is downright treacherous. Releasing an indie film in theaters around the country, which requires marketing campaigns and other promotional efforts, can cost anywhere from $5 million to $30 million, sources say. And it takes time to see a return on that investment. Most films aren’t profitable during their theatrical runs, given that studios split ticket sales with theater owners. The real money comes through on-demand rentals and licensing deals with cable channels and streamers, and those are harder to secure. One downside of all the consolidation, which has seen Fox merge with Disney and Paramount poised to buy Warner Bros. Discovery, is that it has left indie studios selling to fewer TV and streaming platforms.
“That’s where the profits came from, and it’s going away,” one sales agent laments.
Indeed, the list of distribution companies that have launched in the past two decades with great fanfare, only to collapse in spectacular fashion, is much longer than the catalog of success stories. There’s Relativity, the brainchild of hotshot entrepreneur Ryan Kavanaugh, which claimed to have a proprietary algorithm that allowed them to separate the hit projects from the duds. That company ended in bankruptcy and bruised egos. Similarly, STX Entertainment, founded by “The Waterboy” producer Robert Simonds with backing from investment fund TPG, was so eager to disrupt Hollywood that it set up offices in a Burbank highrise that towered over Warner Bros. and Universal’s backlots. Instead, it had to essentially close shop when too many flops led to a cash crunch. Add to that litany of cautionary tales
the likes of Broad Green, remembered for offering staff perks like free meals from private chefs, but not for its movies. Or Annapurna, which provided a home to auteurs like Kathryn Bigelow and Richard Linklater, who directed great films that lost too much money. Sure, Neon and A24 have become
Oscar-winning indie players with box office hits, but given the graveyard of defunct distributors, why would anyone think releasing movies in theaters is a good business to break into?
“We’re going into this with our eyes all the way open about what distributing our own films requires,” Ben Kramer, Black Bear’s president of U.S. distribution, says.
Most of the initial releases from these new distributors have so far failed to capture the public imagination. Row K’s first film, “Dead Man’s Wire,” eked out $2 million at the domestic box office despite playing in more than 1,000 theaters. And Black Bear stumbled with its initial release, “Christy,” a
boxing drama that generated awards buzz for Sydney Sweeney but only $1.9 million in ticket sales. But these newer players say they understand that it may take time for them to develop the kind of hit films that, in success, can pay for their entire slates. Until they do, the trick is to manage money efficiently.
“We’re not spending a ton on marketing, and we’ve kept our staff at seven people,” says Woodrow. “One of the things that killed a lot of other distributors is they hired all these people and that created too much
overhead, so that puts you in a position where you have to release more movies and then you’re not releasing good movies.”
Because these aren’t public companies, it’s hard to know much about their finances. However, many of them appear to be well capitalized. Row K is a subsidiary of Media Capital Technologies, an investment
firm that Woodrow runs with Raj Singh that is backed by MassMutual. Black Bear, in turn, was founded by Teddy Schwarzman, the son of billionaire Blackstone founder Stephen Schwarzman. Despite his wealth, the younger Schwarzman is said by those who have worked with him to be very conservative when it comes to spending.
But some of the other players that have entered the distribution sector in recent years are much scrappier and more mission-driven. Take Obscured Releasing, which was founded by RJ Millard, a film
publicist, and Bill Guentzler, the former acquisitions chief at Gravitas Ventures, with the goal of helping movies considered too edgy and artsy for more mainstream studios to release. So far, its projects
include “Blue Film,” a drama about a cam boy and a pedophile that was so controversial Sundance and SXSW turned it down, as well as “Endless Cookie,” an animated movie about half brothers, one of whom is Indigenous and the other, white. The films will have more targeted runs, booking showings in 10 to 15 cities before launching on demand.
Millard says the company’s credo is expressed in its name: “It’s always been about finding these films that have not been discovered on the scene and are obscured by the marketplace or by the gatekeepers or whatever it is. This is really an opportunity for these films and these filmmakers to come out from behind that shadow.”
Like Obscured, Watermelon Pictures was also founded with a central calling. Launched in 2024 by brothers Badie and Hamza Ali, the company is trying to present richer and more complex portraits of Palestinians and Arabs than the ones typically offered by Hollywood and the media. One of its most prominent releases, “The Voice of Hind Rajab,” the story of a 6-year-old Palestinian girl who is killed by the Israel Defense Forces during the war in Gaza, won the Grand Jury Prize at Venice last year and was nominated for best international feature at the Oscars.
“We saw what’s happening in our homeland, and we knew that our voices are, whether deliberately or not, being silenced from the mainstream narrative,” says Badie Ali. “There’s a big lack of representation. So we decided to provide a platform.”
Industry veterans and artists believe that Hollywood is facing the kind of crisis that can spark a revolution and argue that many of these new companies are emerging in order to capitalize on the tumult. Moby, the Grammy-nominated musician who recently launched his own production company, Little Walnut, sees parallels with the evolution that the music business underwent in the aughts when record sales collapsed with the advent of iTunes and later Spotify. Eventually, musicians figured out a way to sustain themselves by emphasizing touring.
“I don’t know what the new model for movies is going to be,” Moby says, “but we have so many conversations with people who are trying to preserve the old model, and it reminds me of the talks I had in the music world in 2005 where people were saying, ‘CDs are going to make a comeback.’ It’s not clear what form the movie business will take, but its course will be decided by unique, idiosyncratic, creative people.”
Scott Shooman, the head of Independent Film Co., likens this moment to the one that Hollywood faced in the late ’60s and ’70s when studios, which were losing ground to television, turned to a rising group of
young directors like Martin Scorsese and Francis Ford Coppola to connect them with disaffected audiences. The result of this paradigm shift was nearly a decade of barrier-breaking classics like “Taxi Driver,” “The Godfather,” “Bonnie & Clyde” and “Easy Rider.” Shooman thinks that the people behind these new studios and distribution labels could be part of a larger effort to reshape the entertainment landscape.
“It’s ‘Easy Riders, Raging Bulls’ time,” Shooman says. “There’s so much opportunity in the space.”
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