Inside the Economics of the Modern Indie Studio: Forget Home Runs, Aim for Singles and Doubles

“They’re operating in a completely different universe from their major blockbuster studio counterparts,” Comscore’s Paul Dergarabedian says

-The economics of running a successful independent film studio can be wearing. As former Relativity Studios head Ryan Kavanaugh said recently, “You’re on the edge at all times. You need $1 billion in cash a year just to keep it going, between releasing movies and making movies… it’s very hard.”

And he would know. Kavanaugh last year saw his company essentially fold, for a second time, joining the likes of Open Road and The Weinstein Company as independent studios to fade from view in 2018.

Add that to the narratives of turbulence and scaling-back that have circled other indie production and distribution houses like STX Entertainment and Annapurna Pictures, and the industry paints a picture of almost perpetual uncertainty among indies.

Still, experts caution that the box office performance of indies can’t be compared to that of major Hollywood studios. “They’re operating in a completely different universe from their major blockbuster studio counterparts,” Comscore senior media analyst Paul Dergarabedian said. “It’s a completely different model. It’s like a big box retailer and then you have a boutique store, which offers maybe a cooler, but less accessible product.”

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