Indie films’ hot new venues are online

[27 August 2009]

By Steven Rea

The Philadelphia Inquirer (MCT)

PHILADELPHIA — Two summers ago, a group of university film and media grads spent a month in Philadelphia making “Happy Birthday, Harris Malden,” a goofball comedy about a guy with a fake mustache.

Their dream: to gain entry to Sundance, the holy grail of film fests, then score one of those seven-figure distribution deals and see “Harris Malden” up there on marquees across the land.

It didn’t happen.

But something else did: “Harris Malden” made it onto iTunes, as well as Amazon’s video-on-demand and Netflix’s video-streaming services. Instead of dying the dealless death of most independent films, “Harris Malden” has taken off in virtual theaters, broadbanding its way onto netbooks, desktops, iPods, and flat-screen TVs.

Forget the $5 popcorn, the $10 movie tickets, the $30 babysitter. Just stay home, click on your Mac or PC, and watch the latest indies, documentaries, and features via the Internet.

At a time when the theatergoing experience is becoming more about “event” pictures and superhero franchises and 3D, digital distribution is opening a door for an army of aspiring and established filmmakers. Titles of every stripe are becoming available, radically altering the paradigm of film distribution and exhibition.

“Our movie is a very small movie, but there it is on Netflix with any other big movie or big indie or even a full-on studio release,” says Eric Levy, who co-directed and costars in the $50,000 “Harris Malden” with his four colleagues in Sweaty Robot, their group moniker. “Being online has been great in terms of exposure and legitimacy.”

Josh Koury, a Brooklyn filmmaker, has his latest, “We Are Wizards” — a documentary about Harry Potter zealots — streaming on Netflix, too. And on the sites SnagFilms, Hulu and Fancast. Koury showed “Wizards” at fests last year. It had a small theatrical New York run, and he’s self-distributing the DVD. But the Web has extended “We Are Wizards’” life span — indefinitely.

“Digital puts it onto the lap of a lot of people that probably wouldn’t otherwise see it, and it also helps generate DVD sales,” Koury says. “It keeps the film in the bloodstream.”

And that’s where outfits like SnagFilms, with 840 nonfiction titles in its virtual library — from hits like Morgan Spurlock’s “Super Size Me” to a doc on the Philadelphia Eagles’ 2005 Super Bowl run to a short about a Chinese septuagenarian break-dancer — come in. Operating with a small staff in New York and Washington, SnagFilms culls new titles from festivals, and scoops up older ones that have run their course. SnagFilms offers its content free on a user-friendly site for any and all to see.

And to share. Part of SnagFilms’ success — it crossed the one billion page-view mark last month, a year after its launch — is due to its network of “affiliates.” Any blogger, MySpacer, or Facebooker can share a film by using SnagFilms’ movie-theater widget, a tool easily installed on a Web page. AOL and Fancast, newspaper and entertainment sites also show SnagFilms. In all, there’s a network of more than 25,000 sites.

“Our goal, pretty simple, is getting more good films out in front of more people,” says Rick Allen, the company’s chief executive officer. Allen and SnagFilms’ founder (and Washington Capitals owner) Ted Leonsis experienced the indie bottleneck firsthand when the documentary they produced, “Kicking It,” went to Sundance in 2008.

“There were seven of us that got distribution deals at the festival, out of 118 features,” he says. “That’s just crazy. And while I’m sure some of those films would only be of interest to a tiny number of people, I believe to my core that that’s not true about the great majority. Those films would be interesting to a large group of folks if you could find a way to get them out there.

“And you can’t do it through traditional distribution.”

Today, SnagFilms is dedicated to nonfiction fare. But as it expands — it acquired the film-news site indieWIRE, and hosts the influential industry blog of Anne Thompson — Allen says adding narrative films is a possibility.

A different philosophy is evident at Gigantic Digital Cinema. Headed by Mark Lipsky, a marketing executive who held top posts at Bravo, IFC and Miramax, Gigantic is set up as a virtual art house. For $2.99, viewers can watch the sort of first-run fare that typically shows at such theaters.

Some of Gigantic’s titles, such as “Must Read After My Death,” are released simultaneously in theaters, but under an agreement that blacks out those markets so Gigantic isn’t in direct competition.

“We’re trying to stay as close to the theatrical experience as you can have online, except nobody’s kicking your seat,” says Lipsky. “More and more, the new generation of TVs have upgraded connections so that connecting your computer will be no different than connecting a DVD player.”

Indeed, the new wave of HDTVs — some already in stores, more due for the holidays — could change viewing habits dramatically. The Yankee Group market research company predicts that 50 million Americans will have Internet-ready TVs by 2013.

“This is essentially the next generation of home video,” says Matt Dentler, who heads up Cinetic Rights Management, a New York firm that is a go-between for filmmakers and Web-based film venues. “It went from Beta to VHS to laser disc to DVD, and now this is really the next step, much like the way that the music business has evolved.”

And, much like the music business, digital distributors are trying to figure out how to make money in this new world order. SnagFilms relies on ad revenue, which is split 50-50 with the filmmaker or rights-holder. Gigantic also splits its proceeds.

But ask the filmmakers where the money is.

“Right now, it doesn’t generate any profit,” laments “We Are Wizards’” Koury. “I’ve seen a little check, but ... I could sell a handful of DVDs and make that pretty quickly, too.

“I haven’t seen the returns from Snag and Hulu yet, so — I don’t want to give the impression that it’s just a fruitless endeavor — but right now it’s not living up to some of our monetary expectations. That being said, more people have seen it on Hulu, Snag, and Fancast than at all the film festivals and all the theaters put together.”

Morgan Spurlock — whose “Super Size Me,” five years after its theatrical release, is the No. 1-viewed film on SnagFilms — says, “What people need to keep in mind is that the industry is in a huge transitional period right now.”

Spurlock, however, was more than happy with the “20-something-thousand”-dollar check he got from Hulu, representing his share of “Super Size Me’s” three-month run. “It’s not the same as theatrical revenue,” he says, “but it’s real money.”

Cinetic’s Dentler says that because digital distribution is still figuring out its business models, no one wants to talk numbers. But he insists the checks are in the mail.

“Is it the kind of revenue that’s going to rival a successful independent theatrical rollout?” No, he says, but even “great success stories” don’t always produce profits for the filmmakers.

As for the old bricks-and-mortar movie-delivery systems — the theaters — so far digital doesn’t look like a threat. Landmark Theatres, the largest art-house exhibitor in the country, shows movies from IFC and Magnolia simultaneously with the titles’ availability via video-on-demand. Ted Mundorff, Landmark’s CEO, believes those relationships have boosted box office, not diminished it.

“The more people see movies, the more interested they are in movies, and that can only be good for Landmark and for theatrical exhibition,” Mundorff notes.

“People definitely want their movies in a theatrical environment if they can, but not all movies are going to end up with a theatrical release. Some of those movies, for whatever reason ... won’t make it there, so digital is another avenue.”

The democratization of filmmaking — with HD video cameras, cheap editing software, etc. — has resulted in a film glut and more competition to find an audience.

“It hasn’t necessarily created better films in the marketplace, but it’s created more films, and those films are looking for homes,” says Mundorff. “And there will be different methods to view those. But along the way, all these companies still have the same problem that theatrical comes across, which is: How do you market the films, and how do you get people to see the film?

“That’s the question that hasn’t been answered.”

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