As reported in a September 19th, 2012 post to Deadline New York, the buzz going into the 2012 Toronto Film Festival was that an "abundance of new distributors and star-cast acquisition titles would result in some spirited auctions, the kind that make people overpay."
That didn't happen.
Instead, the actual advances paid for independently-financed films, even for films with major stars, failed to top $2 million US - except for Derek Cianfrance’s The Place Beyond The Pines (with Ryan Gosling, Eva Mendes and Bradley Cooper in the lead roles) that went to Focus Features for under $3 million.
While $2 or $3 million may seem like a lot of money - we're talking about films that in most cases committed big money upfront to attract stars (note: the biggest deal was for a star-packed film by a prominent director, Derek Cianfrance, who previously helmed Blue Valentine, which grossed over $12 million in theaters). Meaning that the investors and producers were probably counting on much more upfront when their films screened successfully at Toronto.
And they didn't get it.
This is good news for the distributors.
Who wouldn't want to pick up distribution rights to a star-driven finished film for a fraction of its production cost? Let the investors assume the risk that a production might go haywire. Why invest in a risky production when you can cherry-pick at a festival?
But the prices paid at Toronto for finished festival-worthy films, with big stars doing great work, is very bad news for the investors in those films. They will likely only see pennies returned on every dollar they invested.
And what's most troubling to me is that professional producers can no longer kid themselves. When your best efforts come together - and you hit a home run - but you're still incapable of earning your investors a fair return - or even covering your expenses - how can you stay in business?
Here's how Deadline New York sums it up: "[B]ecause buyers didn’t overpay, the chances for a continuing indie resurgence is good. But for those wannabe indie mavericks who dream of bringing their films to a festival and leaving a millionaire, those days are long gone."
I'd go one step further: For those indie mavericks who've learned their craft and accomplished great work with name actors - the lesson is plain: Get out now! Find another business model where expenses are small and you don't have to negotiate with distributors who have no interest in paying you enough to survive to make your next film.