Boxoffice-June.1989

It s Murdiferous!''
A Colloquy on the Current State
of Independent Distribution
By David Kipen
Associate Editor
Save fifty cents in this business and all
you have is five dollars worth of bookkeeping
—Oppenheimer the studio head, in Raymond
Chandler's The Little Sister.
OR,
AS Hemdale Films chairman
and co-founder John Daly says,
"Money is expensive." A few
years ago, however, money was cheap.
It came from front-end video deals and
junk bond backing. It went into independent
film distribution and, frequently,
independent production. It paid for
what Heritage Entertainment president
Arthur "Skip" Steloff ruefully calls "a
shark-feeding orgy of picture-making,"
and before it could be paid back the bottom
fell out.
Black Monday, the day the New York
Stock Exchange went into free fall, was
not the only reason for the shakeout in
independent distribution. Even if all the
independent features released during
the boom years had been masterpieces,
there would not have been screens
enough and time to nurture them properly.
Making matters worse, they were
not all masterpieces. When, on the
morning of Oct. 19, 1987, Wall Street hit
an iceberg, that only opened a new
chapter in the increasingly sorry log of
independent distribution. The number
of that chapter, for DEG and FilmDallas
and who knows how many more to
come, is 11.
Among those independents whose
phones are still connected. Heritage,
Alive Films, New Line Cinema and
Hemdale represent four different strategies
for survival. One's buying theatres.
one's concentrating on production,
one's fortifying its diverse film library
with the further misadventures of a
dead child murderer, and the last is
defiantly stepping up its distribution operation.
In vaiying degrees, all will have to
contend with what Roger Ebert, arguably
the nation's most influential film
critic, considers "the biggest problem.
...Manv of the theatres in America
Arthur "Skip" Steloff, Heritage
are now run by chains, and it's veiy simple
to sit in the central office and strike
a deal with one of the majors and fill up
300 of your screens. The theatre chains
that are booked centrally have bookers
who have little sympathy with or interest
in independent films, and would
rather just book 'Rain Man' into .300
screens, than trj' to book a city at a time
according to their knowledge of thimarket
and the film."
While Washington's fiscal policies
were lighting a fuse on Wall Street
before the fall, the Justice Department's
new laissez-faire deregtilation
policy was taking the teeth out of the
Paramount Decrees, making possible integrations
not only lateral, but vertical.
New Line Cinema founder Robert Shave
allows that vertical integration is "not
necessarily a healthy thing for
the industiy.
It could be a healthy thing for
the company that's doing it, if they
don't pay too much for the screens.
Also, if they don't take the wrong kind
of advantage of the fact that they own
screens by holding their own pictures."
Notwithstanding his reservations
about the majors' entry into exhibition,
Shaye himself has flirted with the idea
of partnering New Line with an independent
theatre chain. "We talked to
Landmark [Theatre Corporation]. It
struck me that there were lots of fits.
They're kind of like the New Line of the
exhibition business. But they have a difficult
business plan to achieve, because
the competition is the rest of the world.
We just thought that, at the end of the
day, it was a business we didn't want to
get involved in."
Skip Steloff had no such misgivings.
Heritage recently signed a definitive
agreement for the purchase of Landmark,
and also that of the Pacific Northwest's
Seven Gables chain, which the
Landmark management teatn will nm.
"We, the distributor," SteloflP says, slipping
effortlessly into his acquisitions
pitch, "are going to be able to show you
where your film is going to open, how
it's going to open. Here's your campaign,
and gtiess what? These are the
theatres you're going to be in on a cer-
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