Indie producers should embrace private equity as studio giants leave them behind
Opinion
Our indie film sector risks being muscled out of the limelight — unless we get smart about seeking alternative funding.
Independent productions represent the beauty of filmmaking in its purest form: up-and-coming hopefuls can pick up a camera, don their writers’ cap, and turn their ideas into art. These productions give industry talent the opportunity to break through. They are the lifeblood of the film industry.
Unfortunately, the bigger players, the studio heavyweights, shadow this community in size, capital and output. And recent mega mergers are only going to affect it further.
Mega-mergers pose a threat
I won’t pretend that the last 18 months haven’t been tough for our corporate overlords. Strike action, ad downturns, linear’s death, and the rise of streaming giants have all placed them in shaky positions.
But their penchant for M&A activity is a real threat to the indie sector — and the recent Paramount debacle is no different.
The studio is now in merger talks with fellow giant Sony, who has placed a $26bn-strong offer on the table for the deal. Of course, this follows a lot of other activity in recent years, including Disney’s acquisition of Fox and the Warner-Discovery merger.
Unsurprisingly, the effects of these corporate contracts all trickle down to the sector’s grassroots productions.
In the UK, we have some of the best the industry has to offer: from our facilities and landmarks all the way to our cinematographers and directors, we are a real hub of creative assets and talent. However, there is already huge competition for these resources — and consolidated media titans, more so than ever before, could reduce the UK to a ‘services hub’ for the US.
These larger US studios have the marketing power and reach to secure theatrical releases, streaming deals and promotional opportunities. In fact, they already exert tremendous influence over our entertainment sector: in 2023, 77% of our film expenditure came from overseas, according to the BFI.
On the flip side, our domestic film production fell by 30% last year (BFI). These corporate giants, bolstered by consolidation, could worsen this trend, suffocate competition, and damage our indie filmmakers.
We cannot let this happen.
Search for new opportunities
The UK’s indie film sector is already suffering from a funding drought.
Productions have historically received support from institutions such as the British Film Council, the BFI Film Fund, and Film4 to develop and co-finance their films. However, like everyone else, these organisations have also felt the effects of the economic downturn — and have cut funding. The BFI, in particular, announced a £7m reduction in 2023/24.
To avoid being shouldered down by the larger studios, independent filmmakers must start looking for new opportunities to get their films produced and distributed. Traditional financing options are now becoming few and far between; indie filmmakers, just as they do day to day, must get creative.
Private equity is a fantastic alternative and a relatively untapped resource.
Beyond the fearmongering around PE, these firms have a lot to offer for indie productions — and they are already relatively well-versed in the film sector, too. Stripe’s $225m investment into A24 is proof in the pudding.
But, besides a vital capital injection, private equity can also provide independent film companies with operational-level expertise and guidance. In the super congested, highly competitive state the sector finds itself in, this is critical: private equity’s C-suite-level advice will help independent filmmakers streamline their operations to maximise efficiency and ROI. They could expand production, extend their distribution, and see a complete makeover.
At the moment, the future of our indie film sector is looking gloomy. Under looming consolidation, the UK is slowly but surely becoming co-dependent on our American neighbours.
Our indie film sector risks being muscled out of the limelight.
Don’t give up on financing
I’m fortunate to have learned the fundamentals of running a business while building Exodus Healthcare — so I’m less hesitant to strike up conversations with investors.
But the same can’t be said for the majority of people starting out in independent film. That’s through no fault of their own — it’s daunting to put yourself out there and convince someone why your film, which hasn’t even been shot yet, will exceed their return on investment.
I know the value private equity can offer and I’ll be the first to encourage industry newbies to strike conversations with PE firms in the coming months. Corporate contracts, mergers and acquisitions only pose a threat to our independent filmmaking community. And, under Hollywood’s downturn, these woes are only going to continue.
Of course, I won’t deny some of the pressures PE can bring: as a creative, it can be challenging answering to execs in suits and ties and having to change your processes based on their advice. It’s also no secret that players in the sector have stripped companies bare and laid off workers to turn a quick profit.
But, in the darkening cloud looming over the film sector, PE’s positives outweigh its negatives — I’d encourage any filmmaker to embrace these firms with open arms.
This doesn’t just apply to the UK, too. In high-growth, profitable industries like Nigeria’s Nollywood or India’s Bollywood, a PE boost could see your firm stay at the forefront of success as these sectors continue to garner more international attention.
So, for all indie film companies, filmmakers and creatives out there, don’t give up on financing – and don’t let the competition get the better of you.
Scout alternative capital. Embrace private equity.
Sarudzayi Marufu is the founder and executive producer of Euras Films and executive producer at Beyond the Canon, an organisation that aims to diversify the curricula at globally leading drama schools and theatres.