WHAT WE ARE SHOOTING this quarter.
The Q2 numbers came in. Two of our originals delivered on time and on budget. Three of our brand reels placed at festivals — a higher rate than we projected, lower than we hoped. Sinners 2 over-performed tracking by 41%, which is both a great quarter for the indie category and a small problem for us, because the directors on our slate are now meaningfully more expensive than they were six months ago. We expected this; it arrived faster than we modeled.
The numbers we are most proud of are the ones nobody asked for. Average production days lost to weather: 0.4. Crew retention quarter over quarter: 96%. Average days from greenlight to first day of principal: 71. These are the metrics that determine whether we are a studio or a hobby, and they came in better than they have in two years.
If you don't measure the boring numbers, the exciting numbers eventually stop happening.
Mid-budget originals — $8M to $40M production — captured 28% of summer 2026 box office, up from 16% in 2022. This is the band we have been operating in since inception. We did not design our slate around this trend; we designed it around the kinds of films we wanted to make. It is a happy accident that the audience caught up to where we already were.
The pattern we keep returning to: audiences track talent and story, not franchise. Two studio tentpoles missed tracking by more than half this summer. Both were films with director-as-hired-hand marketing, dense competitive release windows, and review embargoes lifted at exactly the wrong time. None of these failures should have surprised the studios that greenlit them. Our Vol. 02 Paper 01 has the full analysis — but the headline is simple. The studios that miss tracking are the studios that lose at greenlight.
BRAND FIRST · DIRECTORS NEXT · property last.
We will not greenlight a film built on property without director-first marketing. We will not chase tentpole budgets. We will continue to operate in the $5–28M band where the math is recoverable from streaming and the upside is uncapped. This is the bet.
We have produced 47 brand reels. 38 of the 47 placed at festivals (Vol. 02 Paper 04 has the methodology). Brand-funded production is now a meaningful share of the operating budget — and it is, in our view, the most underpriced asset in the indie-studio model. The brands that fund our short-form pieces are getting the most aesthetically ambitious work we have ever made.
The reason it works is the discipline at the deal stage. We require four conditions before we sign: narrative independence, director autonomy, runtime ≥ 18 minutes, brand-as-context (not brand-as-subject). Brands that won't accept these conditions are not our clients. We walk from roughly half the deals that arrive in our inbox. Walking has been the most lucrative single business decision we have made.
The brand-film category solves the commercial problem the indie category cannot — and the ambition problem the commercial category cannot. We are surprised more studios aren't operating in both rooms.
Three signals matter to us for Q4 planning.
First, director salary inflation. The mid-tier director market has tightened materially over the last six months as the indie category continues to outperform. We expect this to compress our margin band; we are budgeting for 12% higher above-the-line costs in Q4 than we did in Q2.
Second, the AI question. AI is showing up in pre-production (storyboards, mood boards, treatment iteration) and in post (audio sweetening, VFX iteration). It is not yet showing up in performance or direction — and our position is that it will not in any time horizon we are budgeting for. We are open to AI in service of the work and skeptical of AI in place of the work.
Third, the Sphere expansion question. Sphere Las Vegas is now profitable and the franchise is in conversations about a second venue. If immersive theatrical becomes a real distribution channel in the next 36 months, it changes the production economics of our short-form catalog. We have begun pre-production on one short specifically designed for Sphere-format delivery.
We are not going to chase IP. The studio model we are watching the majors run — buy IP, manufacture sequels, build franchise architecture — has a structural problem. The audience has de-rated franchise sequels for five consecutive years. The economics still work for the top decile of franchises and break for the rest. We are not in the business of being the top decile of franchises.
We are in the business of making 20 originals and 47 brand reels in five years, of which a small number will be remembered for longer than the season they ship. That is the only ambition that makes the math work for an operation our size. We expect to disappoint the people who think "indie" should mean "small." It doesn't. It means we get to choose every film.
If the choice of every greenlight is yours, the studio can be small forever and still be the only studio you want to be inside.