THE COLLAPSE OF PRE-SALES: HOW THE CURRENT MARKET IS FAILING INDEPENDENT FILM — AND WHAT STREAMERS COULD DO TO FIX IT

For decades, independent cinema was financed by a delicate but functional ecosystem: international pre-sales and minimum guarantees (MGs). Sales agents would take a package — script, director and cast — to markets like Cannes or the AFM, and distributors would commit real money upfront. That capital was the engine that allowed thousands of independent films to be made every year.

Today, that system has all but collapsed.

And unless you attach an A-list star — a near-impossible feat for emerging filmmakers — the chances of raising meaningful pre-sales or MGs have fallen to almost zero.

Independent film financing is now in a crisis that is both structural and systemic. And one of the biggest drivers is the very thing that promised to democratise content in the first place: streaming.

How We Got Here: The Streamer Effect

When streamers like Netflix, Amazon and Apple took over the global entertainment market, the economics of distribution transformed overnight.

1. Streamers removed the downstream value chain

DVD, pay-TV, free-TV, international TV packages — all of these were once vital revenue sources for sales agents and distributors. But streamers consolidated everything into a single buyout fee. That meant no backend, no long-tail revenue, no territorial upside.

With the downstream value gone, territorial distributors stopped taking risks. Why commit $200k on a film when you don’t know if you’ll ever recoup it?

2. Streamers dried up the appetite for mid-budget cinema

Before streamers, a $5M feature with a rising star and a strong genre hook could sell worldwide. Now? Buyers wait for the streamer to buy the film — or not buy anything at all.

The result:

Mid-budget independent filmmaking has been hollowed out. Only micro-budget films and giant studio tentpoles survive. Everything in between is being erased.

3. The A-list bottleneck

Because market value has shifted almost entirely to star power, attaching A-list talent has become not just important — but existential. But A-listers are tied up in streamer output deals, multi-picture commitments, or are simply priced beyond the reach of independents.

The economics now look like this:

No star = no pre-sales

No pre-sales = no bankable MG

No MG = no financeable film

This is not a functioning ecosystem. It is a closed loop that locks out independent creators and new voices.

The Tragic Irony: Streamers Are Spending More Than Ever...Just Not on Us

Look at Netflix’s $320 million spend on The Electric State — a film that was widely panned by both critics and audiences.

A few choice reviews:

“A visually numbing blockbuster with no emotional pulse.” — The Guardian “A $300 million shrug.” — IndieWire “A sprawling, empty spectacle that mistakes scale for storytelling.” — The Hollywood Reporter

Even audiences struggled to connect with it. And yet Netflix spent enough money to finance 50 – 60 independent films in the $1M–$10M range.

Let that sink in:

One underperforming tentpole = an entire year of independent cinema.

Fifty films.

Fifty new voices.

Fifty original ideas.

Fifty chances to discover fresh talent, cultural impact and actual innovation.

Instead, the market is flooded with expensive content that struggles to leave any cultural footprint. Meanwhile, streamers release fewer titles per year, many of them algorithmically engineered rather than artistically conceived — and audiences feel the creative stagnation.

The Consequence: A Creative Recession

Independent film is where new voices emerge. It’s where risky ideas become tomorrow’s classics. But without pre-sales and MGs, this pipeline is drying up.

We are heading toward:

• fewer films

• fewer discoveries

• fewer breakout directors

• fewer actors getting early opportunities

• fewer risks

• less cultural diversity

• less experimentation

• less innovation

The tragedy isn’t just economic — it’s artistic.

The future of cinema is being throttled by systems that reward only the biggest, safest, most expensive bets.

A Better Path: What Streamers Could Do to Save Independent Film

The irony is that Netflix — and other streamers — could fix this tomorrow if they wanted to.

Here’s one simple, innovative idea:

THE NETFLIX INDEPENDENT FILM FUND (NIFF)

A $200M – $500M annual fund dedicated entirely to financing independent films between $500k and $10M.

How it would work:

• Netflix co-finances 50 – 100 independent films per year.

• Films retain their creative identity, director autonomy and independent production model.

• Netflix gets a first-window licence (12 – 24 months).

• Rights revert back to the filmmakers after the window closes.

• Films are made through vetted indie producers, with streamlined reporting and recoupment.

Benefits to Netflix:

• A constant weekly flow of fresh content.

• Discovery of the next generation of talent (their own pipeline).

• Low-risk investment compared to blockbuster losses.

• Reputational leadership as the platform that supports, not smothers, independent cinema.

Benefits to the industry:

• Restoration of a mid-budget ecosystem.

• Revitalisation of global independent production.

• Sustainable careers for emerging filmmakers.

• More diversity, more artistry, more experimentation.

In short: Streamers broke the system, but they are also the only ones with the power to rebuild it.

Conclusion: The Collapse Isn’t Inevitable — It’s a Choice

The pre-sales/MG model didn’t die because audiences stopped loving independent cinema. It died because global distribution consolidated into a handful of corporations that prioritise scale over substance.

But cinema is cyclical.

Markets shift.

Audiences rediscover authenticity.

New models emerge.

If Netflix, Amazon, Apple or any streamer decides to champion independent film rather than accidentally suffocate it, the entire ecosystem could be revived within five years.

At Skinny Dipped Films, we believe in a future where independent filmmakers don’t have to gamble their careers on whether an A-list star returns an email. Where creativity is financed on its vision, not its algorithmic “package value”. And where the most exciting storytelling comes from bold voices working at bold scales — not $300M spectacles that evaporate overnight.

Independent cinema isn’t dying. It’s waiting for someone powerful enough to choose to save it.

And the streamers — the very companies that disrupted the old system — might just be the ones to build the new one.