many indie film lines are on the brink

It’s been a rough year for indie film distribution. New Line Cinema, well-known for releasing a good handful of genre franchises like “Nightmare on Elm Street” and “The Lord of the Rings,” but also responsible for more thoughtful specialty works like “Little Children” and “Pan’s Labyrinth,” was recently reabsorbed into its parent company, Warner Brothers, following the disastrous, budget-crushing failure of last year’s “The Golden Compass.” In October, Warner is also scheduled to shut down its Picturehouse division, which launched in partnership with HBO a mere three years ago.

Another “mini-major,” Paramount Vantage, has cut 50 staff positions after its parent corporation, Viacom, lost $15 million on “A Mighty Heart.” News Corp.’s Fox Searchlight, which released acclaimed specialty favorites “Juno” and “Little Miss Sunshine,” has scheduled only six new films in 2008, a 40 percent reduction from its 2007 slate.

ThinkFilm, whose pictures have won seven academy awards, recently lost its president, Mark Urman, amid a growing slew of allegations that the distributor had not been paying its bills. Even worse is the messily ongoing lawsuit filed by the director of 2007’s Best Documentary Oscar winner, “Taxi to the Darkside,” who accuses ThinkFilm of fraudulent claims regarding money promised to market his work that was never actually delivered.

Even the otherwise wildly successful Netflix has ankled its much ballyhooed Red Envelope acquisition effort, which sought out quality new works and talent to champion through their flourishing shingle. Netflix chief content manager Ted Sarandos recently told IndieWire, “Sometimes, the sky has to fall to be able to recreate and build new models.” At this point, the future of the indie film distribution industry is uncertain at best.

A number of contributing factors have led to these unfortunate withdrawals. For one, there’s far more films competing for your dollar than ever before. According to the Motion Picture Association of America, the film industry has seen a drastic increase in theatrical film distribution in the United States over the past few years, up from 466 titles in 2002 to more than 600 in 2007. More of these are independently produced “art house” fare than one might initially think, given the unassailable amount of promotion lavished on bigger studio releases. In fact, most of the programming at arthouses like The Music Hall and The Screening Room has traditionally originated with these distributors.

A decade ago, the indie movement depended highly on word of mouth and free publicity, which has lately been nearly impossible to generate. Swelling competition from both the big studios and the glut of other specialty products has left the smaller fish clamoring for screen time. Theatrical runs are often truncated to double or single weeks, giving no chance for word to spread or a following to grow organically as it once could.

As the boutique distributors scramble for visibility in an expanding landscape, many are finding it more difficult than ever to stay afloat. On the surface, it might look like overall ticketing income is up over last year, but once inflation and the “Dark Knight” windfall are factored in, and in the face of increased competition from home pay-per-view services and the Internet, the number of hard ticket sales has actually dropped.

Then there’s the growing expense of marketing films. According to a report from the MPAA, promotional expenses for indie labels ballooned by 44 percent between 2006 and 2007. Recent economic downturns have made private equity funds harder to gather from individual investors and filmanthropists who make their money in other industries but are compelled to try their hand in The Biz. Rising costs and reduced revenues make for poor returns on investments.

One natural answer to this conundrum would simply be to make fewer films. But as filmmaking technology becomes exponentially more affordable and film schools continue to free record numbers of trained artists into the wild, this seems unlikely at best. Many filmmakers are increasingly resorting to the Internet and self promotion, foregoing theatrical releases entirely and hoping to negotiate safer deals with strictly online distribution companies like iTunes (an uphill battle, as they have typically favored more mainstream products), Amazon.com’s Unbox or Jaman.com, all of which continue to offer reduced popular exposure and opportunities for income, but sidestep many hazards of conventional distribution.

These directions are not just for the first-timers, either. Documentary poster child Michael Moore just announced that in a bid to get his most recent picture “Slacker Uprising” (about his efforts to get American youths into voting booths) seen before election day, he will make it available for download through Blip.tv starting Sept. 23, and release it direct to DVD three weeks later. Previous attempts of similar sorts have met with lukewarm success (Ed Burns’ vanity piece “Purple Violets” and frat boy splatfest “Jackass 2.5” were both features initially released exclusively on the Internet), but at least someone saw them.

So the present looks a little grim, but there may be some light in the future. One thing’s for sure: it’s not getting any easier for the little guy. Quoted in Variety, recently ousted Picturehouse president Bob Berney offered some hope, “I think the audience is still there, but that several of the business models and the way some of the truly independent companies were set up and funded are outdated.” He added, “Good films will always find a market.”