Streaming has dramatically changed the landscape for film financing

Yahoo Finance entertainment reporter Allie Canal breaks down how film financing has evolved in the age of VOD and streaming.

Video transcript

SEANA SMITH: As streaming wars dominate the headlines, Hollywood has been forced to adapt to the shifting media landscape. Now filmmakers and media heavyweights are taking an entirely different approach to film a financing. For more details, we want to bring in Yahoo Finance's Alexandra Canal. And Allie, what can you tell us about this?

ALEXANDRA CANAL: Yeah, so we're in the age of streaming. Obviously, that's had an impact on Hollywood, but it's also had a ripple effect on film financing. And I talked to a prominent entertainment lawyer, who told me that gone are the days if you're an independent filmmaker that you're going to see your film on the big screen. Now you basically have to beeline it to streamers, or else, forget about it. Your film is dead and gone.

And there are a couple of ways that film financing is done. So number one could be a cash flow arrangement. So a streamer, once the project is greenlit, they give you all the money upfront. That's a great situation. However, there is another option where a streamer will provide some sort of a contract that says it will pay upon project completion. That means you need to go to a bank, get the loan to finance up until that time. So a slightly more cumbersome approach.

And then there's also a lot of alternative forms of financing, like NFTs. So there's a lot going on in the space. But basically, if you want to get a film financed right now, you've got to go directly to a streamer. Or else, all else is fails, really.

DAVE BRIGGS: Interesting. David Zaslav, the CEO of Warner Brothers Discovery, said this morning, this direct to TV streaming model never made sense, and that will not be happening on his watch, on Warner Brothers, Discovery. But the prominence, the power of these studios, is it gone?

ALEXANDRA CANAL: It basically is. It's just completely changed. Over the past 10 years-- 10 years ago, studios basically had a lot of power because they controlled the distribution. Now, with all these streaming services, they're the distributors, and they really have the power. The studios basically are operating like a production company of sorts for these streamers, obviously, with the exception of Disney.

And the lawyer that I spoke with, he told me in today's world, content isn't necessarily king. Distribution is king. And that's something that really struck me, because I feel like, you don't really think about it in that way. But it's something that's evolved, and it's something that's changed amid the current environment.

SEANA SMITH: All right, Alexandra Canal, certainly lots of changes going on.

DAVE BRIGGS: That's a big, bold statement there.

ALEXANDRA CANAL: Right? I thought so, too.