Red Envelope Closes

With most American movie projects, the money flows in one direction. First, some Hollywood executives hammer out a deal over lunches of salad greens, bottled water, and antidepressants. Then the money flows to the stars, the director, the DP, the key grip, and all the way down to the poor schlep listlessly sweeping up the lobby in a multiplex.

Sometimes, though, the money originates with the distributor rather than the studio. In  Europe it’s common practice to have television channels occasionally fund theatrical movie releases. In the 1980s the BBC4 funded some of the best British cinema of the decade. The Canal+ Group in France functions much the same way, funding movies through its StudioCanal division. Throughout history various European countries have had arrangements in which television networks (or Hollywood film distributors) had to devote a certain percentage of their profits to local film studio projects. These so-called quota films were uneven in quality, but sometimes something great emerged. One famous example of a great quota film is Walter Ruttmann’s Berlin, Symphony of a Great City (1927), which started a brief vogue for montage slice-of-life films–Dziga Vertov’s Man with a Movie Camera among them.

The practice of distributor funding is less common in the US. Netflix established its Red Envelope Entertainment acquisition arm to fund projects for theatrical and DVD release. In its brief two-year existence Red Envelope helped fund some distinguished American independent films, most notably Charles Ferguson’s Iraq War documentary No End in Sight.

Now Red Envelope is no more. Netflix pulled the plug on the division not because it wasn’t profitable, but because it interfered with the specialty studios owned by the major Hollywood studios. Netflix’s decision is particularly ironic considering the major studios are scaling back, or closing down, their specialty studios. The American independent film industry contracts a little bit more, along with, it seems, any kind of alternative American culture. 

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