What can a setting contribute to the narrative? Well, pretty much everything that a character can, including conveying a tone, emotion, or idea. This video essay by Now You See It explores the huge role settings have played in some of cinema's greatest stories, like Fargo, Up, and The Lion King to show us how important a setting in a film really is.
As indie filmmakers, we may not have the money or clout needed to gain access to many locations in which we wish to set our films. Dressing a set can get pretty spendy, as well. As a result, our decision-making process defaults to choosing whatever's available to us rather than what would serve our story better.
But as the video demonstrates, so much potential exists in a location or the way a set is dressed. Settings can act as an extension of your character, helping to communicate their emotional state or inner thoughts. Or it could even be a character all on its own, setting a tone and atmosphere for the entire film, like Pride Rock in The Lion King, or the snow-laden terrain in Fargo.
Settings, like everything else that shows up on screen, can communicate to your audience. Make sure that you don't let its storytelling potential go to waste.
Source: Now You See It