Netflix Big Deals Add Heat To Chilly Sundance Streaming Film Market

Park City, Utah – Five days into the Sundance Film Festival’s return to in-person festivities and the single-digit temperatures outside have been something of a metaphor for the sales market too, for the dozens of films, documentaries and episodic shows on display through the end of the week.

The biggest deal so far popped Monday, as Netflix opened its wallet to buy Fair Play, a buzzy corporate thriller featuring a couple who are both vying for a big promotion at a hedge fund, and what spins out after the woman gets it. Deadline first reported the deal for the movie, which debuted Saturday at Sundance and sold for $20 million for all global rights.

That’s a big chunk of change for a film from unknown writer/director Chloe Domont, who previously had done plenty of directing work on TV series such as Billions. The film featuring two budding stars in Bridgerton’s Phoebe Dynevor and Solo’s Alden Ehrenreich.

For all the splash, the sale price is still considerably less than the festival record, set two years ago when AppleAAPL
TV+ bought festival opener CODA for a record $25 million. Apple’s investment back then paid off handsomely when CODA turned into a breakout commercial and critical hit, and won Oscars last March for best picture, adapted screenplay and supporting actor. Apple TV+ became the first streaming service to win a Best Picture Oscar.

Plenty of Sundance filmmakers, clearly delighted to again be back in person with their peers and basking in the adulation of festival fans after two years of virtual screenings and events, likely also are dreaming of a CODA-sized payday for their passion projects. Certainly, their investors are hoping.

But the going so far has been considerably slower for most projects. It’s not quite the pace of deadlocked traffic crawling down Park City’s packed Main Street, but close enough to glacial to match the thigh-high snow drifts around town.

Other announced deals have been considerably more scarce, mostly involving music documentaries and horror films.

Netflix kicked off the Robert Redford-founded festival in Park City, Utah last week by announcing that it had bought horror film Run Rabbit Run, starring Sara Snook, best known for her scheming turn in Succession’s dysfunctional family. Amazon Prime Video bought Filipino horror film In My Mother’s Skin.

Music has also been popular too. Magnolia bought a terrific documentary about rock pioneer Little Richard. Magnolia also bought Kokomo City, a documentary about trans sex workers. And Onyx Collective bought several projects to expand its slate for Hulu, including a documentary about Sly Stone.

But it’s been a slog elsewhere. The reasons are basically two, pinching indie filmmakers’s financial opportunities from both ends.

On the theatrical exhibition side, the business is still a mess. Yes, the sequels for Top Gun and Avatar have been gigantically successful (Avatar: The Way of Water just crossed the $2 billion mark in worldwide gross this week).

But the other end of the business has been turned upside down by the pandemic’s lingering effects. Few award-chasing prestige pics have managed to coax older, review-driven audiences into theaters. Overall, the 2022 box-office was still off by a third from pre-pandemic highs. That’s reduced the traditional outlets and buyers for many smaller films that depend on platformed, art-house releases to build buzz and revenues.

On the other end, the streaming-video business has also been considerably chastened since last April, when Netflix reported disastrous quarterly earnings.

Wall Street pummeled Netflix share prices back then, and the company made a series of major changes that culminated this week with a far better Q4 earnings report, beating expectations on revenue and new subscriber adds, which topped 7.7 million new customers. Share prices still aren’t at 2021’s mountain-high valuations, but they’re up about double from last summer’s lows.

It’s a more rugged story for all the legacy media businesses in streaming, however. Wall Street’s patience for steady investment, brand building and loss-making in the transition to direct-to-consumer streaming abruptly ended after Netflix’s fall. Layoffs have been widespread, and so too have been programing cuts and reduced acquisitions.

Netflix, the only company with streaming profits to brag about, is clearly flexing its muscle at Sundance as it continues to benefit from its global scale and customer base. But the relative absence so far of everyone else in the market has left many wondering who’s going to buy many of the projects debuting at Sundance.

Some here have suggested the market will pick up because streaming services need to stock up before a feared writer’s strike hits Hollywood later this year.

That’s a possibility. Buyers will have plenty of high-profile projects to pick from, including:

• Eileen, a black comedic drama featuring Anne Hathaway, Thomasin McKenzie, and Marin Ireland.
• Nicole Holofcener’s latest comedic dissection of upper middle class mores, You Hurt My Feelings. It premiered Sunday night, with stars Julia Louis-Dreyfus (Seinfeld, Veep) and Tobias Menzies (The Crown) joining Holofcener onstage after a rapturous festival response.
• Magazine Dreams, about an amateur body builder’s pursuit of perfection. Star Jonathan Majors is getting widespread kudos for his breakout performance.
• Flora and Son, yet another music-based drama from director John Carney, who previously had breakout hits with Once and Sing Street.
• Shortcomings, the directorial debut of Randall Park (Fresh Off the Boat, Always Be My Maybe), based on a much-loved graphic novel from Adrian Tomine, who also wrote the screenplay.
• Cat Person, based on the New Yorker’s most-downloaded short fiction piece ever. The thriller about the horrors of 21st-Century dating is directed by festival favorite Susanna Fogel, and features CODA star Emilia Jones (also, Game of Thrones) and Nicholas Braun (another Succession star).

So there are plenty of potential pickups, should the streamers find a few ducats in their suddenly threadbare wallets. Or perhaps, like the weather here at Sundance, they’ll just chill out and figure out how to restructure their streaming businesses to fit Wall Street’s ice-cold new expectations.

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Streaming’s cooler approach is badly timed for the indie film business, always a parlous proposition but especially now in the streaming chill.

Theatrical exhibition remains a mess, despite massive hits like Top Gun: Maverick and Avatar: The Way of Water. But the other end of the theatrical business – typically occupied by the kinds of films and fans you’d see at Sundance – has been battered. Overall, 2022’s box office was still a third down from pre-pandemic days, most of the impacts hitting mid-sized and smaller critic-driven prestige projects.

Streaming services had filled a part of that gap, buying films that could appeal to a specific niche of their audiences, while possibly generating some awards buzz at year end. But if streaming services aren’t buying, and theatrical exhibition remains a mess, where will these projects get seen, and how will they get financed?

The purchases at Sundance 2023 so far have been modest at best. Netflix announced on the festival’s first day that it had bought Run Rabbit Run. Netflix already has a watch reminder page on its site for the movie, though no trailer, images or release date.

Meanwhile, back at the ranch in Hollywood, Netflix “blew the doors off” its quarterly earnings announcement last week, beating guidance on revenue and subscribers, adding nearly 7.7 million paid members.

Co-CEO Reed Hastings decided it was the perfect time to announce he’ll be leaving the company he founded, shifting to executive chairman so heir apparent Greg Peters can slide into the operational side of the company’s shared CEO seat.

Amid all that, the company also released its 2023 programming slate, which was markedly slimmer than last year’s mind-boggling bounty of more than 1,000 features, episodes, and specials.

The slimmed-down slate also shows the company’s continued focus on making more shows for local markets around the world, instead of big Hollywood productions that get shipped everywhere else.

As if to emphasize that shifting focus, the company said last week it would end one of its bigger hits of recent years, Cobra Kai, after the show’s sixth season. And the company’s hefty investments in awards contenders has been considerably muted this Oscar season, unlike past years that resulted in Oscar winners such as Roma and The Ballad of Buster Scruggs.

It’s starting to feel like a paradigm shift has truly taken hold across streaming, manifesting at Sundance and far beyond.

It’s certainly possible in coming das that Netflix and other streaming service programmers will dive back into Sundance’s offerings and scoop up more shows this year as more films hold their premieres over the next few days. Or maybe, like so many of us trudging through the snow and wind in Park City, they’ll just chill.