Indie movies are having a surprising comeback in a bleak time for Hollywood

• Indie films like "Longlegs" and "Thelma" are thriving despite Hollywood's challenges.
• A strong box office and diverse audience targeting have boosted indie movie success.
• Increased film financing and innovative distribution methods are aiding indie growth, too.

Despite all the doom and gloom in Hollywood, there's optimism coming from a surprising place: indie films.

A strong box office this year has buoyed films like Neon's "Longlegs" and "Cuckoo" in the horror genre, which is particularly popular with young people (and best watched in a communal setting). There's also A24's thriller "Civil War," and Magnolia Pictures' action-comedy "Thelma."

Sure, they're not financial blockbusters when measured against this year's big franchise films like "Despicable Me 4," "Deadpool & Wolverine," and "Inside Out 2."

They also didn't seem destined to be obvious commercial hits, and yet, they're successes by specialized film standards. "Longlegs" barely promoted its biggest star, Nicolas Cage, and is the year's biggest indie film, grossing over $100 million worldwide. "Thelma," about an 83-year-old tracking down her phone scammer, became Magnolia's highest-grossing narrative feature.

Conservative-themed movies are also having success, following recent faith-based movies. The Dennis Quaid-starring biopic "Reagan" and Matt Walsh's doc "Am I Racist" have cracked the top 10 domestic box office this summer.

"Coming out of COVID and post-peak streaming, it's become evident again indie film can succeed in a big way in theaters," said Shawn Robbins, founder and owner of Box Office Theory, a movie industry analysis firm. "There have always been studios making these kinds of films, but distribution strategies, marketing, largely through social media, have changed the game."

The summer box office rebound from a soft spring, with releases that targeted a wide range of moviegoers, has lifted all film boats. Anecdotally, more indie projects have been moving forward since the spring, said Seth Needle, a cofounder of Blue Harbor Entertainment, a film marketer and distributor.

"There's been really strong box office from independents; it certainly shows the ceiling that exists for an independent film that's well made and well marketed. In the past, you'd see all that at the expense of independents," Needle said, referring to franchises' success.

The case for hope for indie films

Recently, there's been a spree of pieces predicting the death of indie films. They were hobbled during the pandemic, when festivals, a key source of awareness-building, were shuttered. The Hollywood writers' and actors' strikes shut down most film as well as TV production for much of 2023. Netflix, after spending big on entertainment and lavishing creative freedom on filmmakers, has also cut back while turning its focus to broadly appealing, commercial hits.

Still, production of indie films — traditionally defined as those made outside the big studios — has been more stable over the past two years than the big studios, which sharply cut spending to get to streaming profitability, according to research firm Ampere Analysis. A rush to put delayed projects into production at the major studios squeezed many independent projects out of shooting schedules earlier this year. But indie production activity has since recovered, per Ampere.

Some optimists also point to an uptick in film financing and momentum by indie players like Miramax, which just got a new CEO in Jonathan Glickman, and Neon, which has a new deal with Waypoint Entertainment to back mid-budget films. Private funding and tax incentives offered by locales to stimulate the film industry are other sources. Film and TV investor Content Partners also just started a film financing arm, beginning with $15 million in debt financing for Lionsgate's films.

Brands like Procter & Gamble and Neutrogena are taking a bigger role in film financing, too, providing another source of hope for indie films. Brands are becoming more open to financing projects, then trying to recoup the cost by selling it to a studio or streamer.

Some indie films are finding nontraditional ways to distribute outside the traditional theater system through avenues like startup Kinema, which helps filmmakers host in-person and online screenings. Blue Harbor is taking an experimental approach to distributing "Know Your Place" by marketing the film to pockets of audiences in Seattle, where the film is based, on top of a limited theatrical run.

Indie films can also be a bargain to rent or buy on streaming compared to big studio films.

"One of the transactional platforms told us, there's an opportunity for indie film because a lot of studio films are renting for $20, trying to capitalize on box office success, while indie films can be less than half of that," said Michael Messina, a Blue Harbor cofounder.

Yet not all indie filmmakers are convinced the economics have fundamentally changed. Netflix and the other big streamers are still not buying the same number of films they used to, and ones made at the mid-budget level are on the wane. Film sales from the Toronto Film Festival, a closely watched barometer of the indie industry's health, have been muted.

Buying behaviors are still making it tough for indie filmmakers, said Ken Kao, cofounder and president of Waypoint Entertainment.

"They're still dictating movies be made for a certain price, and it's challenging," he said. "If it's an auteur film, it pretty much has to be made for sub $15 [million] if you're lucky. Almost every single movie I'm making right now, I'm figuring out how to compress the budget. We're rerouting to Eastern Europe to make them. It's all a function of these studios not wanting to pay for midsize independent films. I don't feel like that was the case 10 to 15 years ago."