The already-battered movie business got some more bad news on the eve of the Toronto Film Festival as exhibition giant and Regal owner Cineworld Group filed for Chapter 11 bankruptcy protection.

The world’s second-largest movie theater chain, London-based Cineworld operates in 10 countries, with 747 theaters and more than 9,000 screens worldwide. In addition to the Regal cinema chain, its subsidiaries include the U.K.’s Cineworld and Picturehouse venues. The COVID-19 pandemic hit Cineworld the hardest of any of the big theater chains. The group recorded a $3 billion loss in 2020, a further $708 million pre-tax loss last year and was carrying more than $4.8 billion in net debt.

News of a major movie house going bust only adds to the growing “death of cinema” narrative that became a dominant theme during the COVID-19 theater shutdown, when many predicted the business of traditional film exhibition was on its way out. Despite the return of the big international film festivals —Cannes, Venice and now Toronto — the theater industry has yet to fully bounce back.

“Unfortunately, at the moment there is a narrative that there’s not much worth seeing and cinemas are dying,” noted one British cinema exec, who works for a small chain of theaters unconnected to Cineworld. “I think it’s going to be tough for even a really good film to break through that.”

Theatrical revenue for North America is $5.32 billion year-to-date, according to box office analysts Comscore, up an impressive 94 percent from 2021, but still lagging the same period in pre-pandemic 2019 (when revenue reached $7.25 billion) by 30 percent. This summer’s box office, driven by the success of big studio tentpoles, including Paramount’s Top Gun: Maverick and Warner Bros.’ Elvis, did a bit better, down 21.6 percent at $3.4 billion, compared to $4.3 billion for 2019. But for independent films, the sort of cinema celebrated by TIFF et al, the hits have been few and far between.

A24’s Everything Everywhere All at Once, which has earned $68 million in theatrical revenue in North America to date, is the only independently-released film so far this year to crack the top 30 at the domestic box office. Even the studio-owned indie divisions have had trouble finding the hits, though Sony-owned Crunchyroll had success with anime titles Dragon Ball Super: Super Hero ($35 million domestic) and Jujutsu Kaisen 0: The Movie ($34.5 million), as had Universal’s Focus Features with Downton Abbey: A New Era ($44 million) and The Northman ($34 million).

But alongside the stories of doom and gloom, the production of feature films, particularly of the arthouse variety, is booming.

“We made seven films last year, and we’re making 36 this year,” says Andrea Scrosati, group COO of indie production giant Fremantle, which owns such boutique film companies as Ireland’s Element Pictures (The Favourite, Room) and Rome-based The Apartment (The Hand of God). “The reason is there are just so many more ways now to finance and monetize these movies.”

For Bones and All, Luca Guadagnino’s “cannibal love story” starring Timothée Chalamet and Taylor Russell, which premiered in competition in Venice, Fremantle’s The Apartment produced alongside Guadagnino’s Frenesy Film Company, with Comcast-owned European pay TV outlet Sky providing further funding. After the film was shot, it was sold to MGM, which is handling distribution worldwide. For The Eternal Daughter, Joanna Hogg’s Venice competition title, starring Tilda Swinton, Fremantle’s Element produced together with BBC Films and A24, with A24 taking over both U.S. distribution and world sales.

The array of new financing and new distribution models for feature films, Scrosati says, “means we can take much bigger swings, with projects that before might not have looked commercial enough.”

The main reason for this shift, of course, is streaming. Netflix has invested heavily in arthouse content —see Noah Baumbach’s White Noise, Alejandro González Iñárritu’s Bardo and Andrew Dominik’s Blonde in Venice and TIFF titles The Swimmers from director Sally El Hosaini, Tyler Perry’s A Jazzman’s Blues or German war drama All Quiet on the Western Front — and other platforms are following suit. The result is a new source of revenue and a new avenue of distribution for movies that used to live or die based on their theatrical box office.

“I’m just really happy to be opening the festival with a film by Sally El Hosaini, I think The Swimmers is one of the best films of the year,” says TIFF artistic director Cameron Bailey. “That it comes to us from Netflix just reflects where the film industry is [right now].”

Netflix isn’t alone in finding value in international arthouse. Amazon Prime backed Santiago Mitre’s Venice competition title Argentina, 1985, and arthouse streamer MUBI picked up North American rights to Park Chan-wook’s Decision to Leave shortly before its Cannes debut, where the mystery thriller won the best director award. Many, if not most, of the movies screening at TIFF this year won’t make it to a theater near you but, thanks to so-called “cinema killers,” they are getting made and getting seen.

“There are many [streamers] now making films that are really of high enough quality to deserve a play at major film festivals, this is the world we’re in,” says Bailey. “It’s evolving and will continue to evolve, but the industry has never stopped evolving. They’ve always adapted to the present conditions and found new ways to get great movies to audiences, and that’s what’s happening here.”

Etan Vlessing in Toronto contributed to this report.

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