Producer says film’s old business model is nearing its end

Independent producer Daren Smith argues in an IndieWire column that the film business is not passing through a temporary downturn. Its long-established economic model has been weakening for years, and producers who wait for a return to the past risk losing valuable time.

Smith’s argument is based on a pattern he sees across the industry: repeated studio layoffs, company closures, disappointing releases and occasional independent successes are treated as isolated shocks. In his view, the constant cycle of surprise obscures a longer-term transformation.

For filmmakers, the practical consequence is severe. Developing a project and hoping that a distributor will eventually appear is no longer a dependable plan. Instead, Smith says producers need to begin with audience demand, then shape a project’s financing, production and release strategy around what the market can support.

The numbers behind the change

The collapse of home video is central to Smith’s explanation. DVD sales once provided a major source of income for both studios and independent companies. That revenue helped make films with moderate budgets financially viable, particularly dramas, comedies and romantic comedies.

Home video revenue peaked at more than $15 billion a year in the mid-2000s. As that business declined, the middle of the film market became harder to finance. Smith describes the result as a split between productions costing less than $5 million and major studio projects ranging from $70 million to $350 million. Companies that had specialised in films costing roughly $5 million to $20 million have disappeared over the past two decades, he writes.

He places the point at which the financial logic began to fail around 2005, adding that the situation is worse today. Box-office revenue also concealed the scale of the audience decline because rising ticket prices helped maintain earnings even as fewer people attended.

The figures cited in the column show the change: US ticket sales stood at 1.58 billion in 2002, fell to 1.23 billion in 2019, and reached 769 million in 2025. The 2019 figure predates the lockdowns, making the decline part of a trend that began before the pandemic.

Smith says the industry’s focus on short-term reports has made that trajectory difficult to recognise. Trade coverage can present one week as evidence of recovery and the next as proof of disaster, while the deeper movement becomes visible only across many years. Optimistic assumptions, including the belief that audiences will always return to cinemas, have also encouraged producers to postpone difficult decisions.

A production becomes truly independent

Smith describes the experience of his films Faith of Angels and Brotherhood as the point when the changing economics became personal. While seeking a distributor for Brotherhood, he examined about six companies and concluded that the traditional release model would require the film to earn at least $15 million at the box office for its costs to be recovered.

A self-distributed release using a highly targeted campaign, and only one-tenth of the usual marketing expenditure, lowered the break-even point to just under $6 million. Because Smith was responsible for returning investors’ money, he chose the second approach.

His company, Craftsman Films, then handled the project’s financing, development, production, marketing and distribution. Another company assisted with securing theatrical bookings. Smith presents this decision as more than a change in release tactics: it made Brotherhood genuinely independent because control of the entire process remained with the production company.

The lesson he draws is that distribution can no longer be treated as a hopeful outcome after a film has been made. It must be budgeted and planned from the beginning. A project’s intended audience and likely route to that audience should influence how much money is spent on it.

Adapting instead of waiting

Smith compares film’s current position with disruptions that affected music, news and television earlier. Music entered a prolonged decline before recovering through a different commercial structure. Its revenue fell from a 1999 peak of $14.6 billion to about $6.8 billion in 2014, then rose to $17.7 billion in 2024. Streaming accounted for $14.9 billion of the 2024 total.

He sees that history as evidence that recovery does not necessarily restore an earlier business. A sector may grow again while operating according to entirely new economics. Cinema’s physical barrier—requiring people to travel to a theatre and pay for access—delayed this reckoning, Smith argues, until the 2020 lockdowns removed much of that protection.

His conclusion is aimed at producers without studio backing, an established slate or institutional permission. They can continue doing strong work within a system that no longer supports them, waiting for conditions to improve. Or they can study the direction of the market, change their methods and prepare projects around the reality they face.

For Smith, recognising the industry’s decline is not an act of defeat. It is a reason to plan. The end of one film-business model, he suggests, need not mean the end of filmmaking—but surviving the transition requires action before the old system disappears completely.