Study Reveals Untapped Market of 40 Million People Who Will Pay for Indie Films on Streaming

After a decade of massive growth, the indie film industry hit its peak in 2017 with just over 200 independent films in theatrical release. That’s also when streaming began to make itself known in a very big way, and the number of indie films in theaters began to plummet.

Netflix and the like spent a few years gobbling up indie movies out of festivals, but that’s dramatically slowed since 2021. Viewership for indies on streaming dipped from 30M in 2020 to just 18M by 2022. Indie films — and the audience for them — are being left behind.

That’s the diagnosis at the heart of an incisive and sprawling, 118-page study, “US Independent Film Audience & Landscape,” available at indiefilmlandscape.org. Keri Putnam, former CEO of the Sundance Institute, led the study as a fellow at Harvard’s Kennedy School’s Shorenstein Center. She will discuss her work as part of a panel discussion at IndieWire’s The Future of Film event on Saturday, November 2 in Los Angeles.

She distilled more than 200 field interviews along with research and data on multiple distribution windows. It touches on the nuances of paid video on demand, the rise of niche streamers like MUBI and Documentary+, educational services like Kanopy, how PBS still shapes the indie market, and the untapped potential for indies on free streamers like Tubi or Pluto.

Among its many findings, she put a number to the current US market for scripted or documentary independent films in theaters or at home: 36.7 million Americans. However, the study also found that 77 million Americans would be willing to pay for a streaming service dedicated to showcasing indie films and docs. That’s a gap of 40 million people potentially going untapped and underserved.

“People are looking for alternatives,” Putnam told IndieWire. “It doesn’t mean they’re dropping the mainstream ones, but they’re maybe they’re looking for niche choices. Maybe they’re looking for choices that meet their interests in other ways. So I feel like there’s opportunity in that.”

The report touches on the intricacies for each release window, including deep dives on theatrical distribution challenges, film festivals, and social media marketing, an indie film’s lifecycle, and how releasing such movies has never been more difficult across the board.

The 77 million number was projected from a survey of 14,500 US adults. The respondents weren’t made aware it was a survey specifically about indie film, but a large cross-section expressed an interest in a service that would offer them more options.

Putnam’s study argues the biggest challenge faced by independent films is finding them. Hollywood CEOs already acknowledge streaming’s discovery problem: In a post-cable, cord-cutting era, consumers have a hard time finding the exact content they want. They’re stuck clicking through numerous apps and endlessly browsing thumbnails; no centralized platform has all viewing in one place.

That fragmentation goes double for indies. Such titles are spread across streaming services, and they’re often buried by algorithms that highlight hits over discoveries. Putnam said there’s also a severe lack of viewership data available for independent films. Places like Parrot Analytics and Nielsen don’t track smaller titles without much viewership, and niche streamers don’t publicly share subscriber numbers or viewership data.

“The streamers have totally turned away from this work,” Putnam said. She believes that “collective action” may be more impactful than more, smaller platforms that could just contribute to more fragmentation.

“Something that brings things together in a in a bold new way is what excites me personally,” she said.

The study results were compiled based on individual reports by other major research bodies that contributed to the study; each is available for download alongside Putnam’s full report. Those include data from Evan Shapiro’s ESHAP & PCH Insights, Parrot Analytics, Art House Convergence, and the Film Festival Alliance.

Putnam doesn’t have the answers to all these problems, but she does have some suggestions. The indie film community can better leverage free streaming platforms, reach out to younger and more diverse audiences, program more scripted films on public television, share more data about indie streaming patterns, or establish a trade organization for further research.

She also suggests a consolidated and collaborative streaming platform for indie films and documentaries. A24 and Neon have output deals with Max and Hulu, respectively, but other niche streamers face challenges in being able to attract and retain subscribers, offer competitive licensing fees, and create effective marketing.

In the course of her research, she said it was “dispiriting” to discover the enormous disadvantage faced by niche streamers against major players. That’s where collaboration, such as a single platform that combines the best of places like the Criterion Channel, Shudder, or Mubi, could really help. And audiences are hungry for it.

“Everybody’s running their own business. I don’t blame them. They don’t want to share their data,” Putnam said. “On the other hand, if we look at the long-term health of the sector, is there a way for something fair, anonymized, and equitable to be created that’s a repository for shared information that could be leveraged by the whole field? Maybe.”

The study’s summary findings can be found on a dedicated website, and the full study is available for download. The study was conducted with the help of The Numbers, Art House Convergence, Nielsen, Parrot Analytics, Evan Shapiro, the Film Festival Alliance, Letterboxd, and the Covid States Project Survey. The research was made possible thanks to the Randomgood Foundation and with the financial backing of Chris and Randy Gebhardt.