The advent of the internet and the rise of home streaming has brought a new level of diversity to the film industry.  Now small films, once overlooked by Hollywood, are finding their niche, and their profits, in a more and more complex market.

Studios and filmmakers are now competing against videogames, social media, mobile technology, and an ever-increasing array of new tech and media for both audience and attention. And as a result of the boom in available streaming outlets such as Netflix, Hulu, Vudu, and others, the market is now more open to niche films than ever before.  The mega-budget blockbuster aka "tentpole film" is now more expensive to produce than ever, especially due to the pandemic.

A new report found that safety measures add 4% to 6.5% in costs to film. COVID protocols added $90M in costs to 50 projects. | California Film Commission (2021)

This new era has simultaneously  given rise to an unprecedented fragmentation of the film market, yet the film industry has, by and large, opted to focus their resources primarily on said mega-budget films, leaving a vast production void in the amount of quality smaller films being produced and released each year, essentially ceding that territory to smaller, more agile studios and filmmakers.

Thanks to technology, films once produced for $1 million can now be produced for $100,000.  Film crews that once numbered in the hundreds are now numbered in the dozens.  Industry-standard films, of top visual and sound quality, can now be produced for a fraction of the cost of their predecessors.

While budgets still range wildly - from $10,000 for your average high-quality college thesis film, to $500 million for James Cameron's CGI blockbuster, Avatar - one thing still remains the same:  audiences will pay to see a good film, no matter how big the budget, and no matter who's in it.  And while it's harder for a small film with no stars to make big, big money theatrically, with the diversification of the methods by which audiences are consuming films, profit is still very much alive in the independent cinema.

Film entertainment is big business in the United States and it was estimated that the movie business generated 35.3 billion U.S. dollars in revenue in 2019. The global entertainment market topped $100 billion for the first time ever in the year 2019. | Forbes (2020)

The success of independent films such as Precious ($10 million budget, $47.6 million domestic gross) and Beasts ($1.8 million budget, $11.5 million domestic gross)   mark a new era for independent film.  Precious exemplifies a character-driven script that made an "end-run" around the studio system. Costing just $10 million to make, and given a limited release  by Lionsgate, the film grossed $1.8 million on its opening weekend, and ranking 12th in place at the box office.  Within 4 months, it had grossed $47 million.)

Films begin in many different ways.  But they usually begin as a script.  The script is read by a producer, a director, an actor, or an agent, and that person decides to put that script into motion.  At a studio, a movie can sometimes begin as a pitch from a studio exec, who then hires a writer to write the script.  Once the script has been green-lit, aka given the go ahead to be turned into a film, it moves forward into the process of Development, which is just a fancy word for saying the script is getting spruced up, improved, or tailored to meet the creative needs and/or financial needs of those who are pushing it forward.

Once the key players are happy with the script, the script then enters Preproduction, which is where the script gets broken down into a schedule, actors and crew are hired, and locations are picked out.  It's the initial planning phase of a film's production, where are the elements are put together to prep the film so that shooting can take place.

And that shooting is called Production. Production is the 20 days or 8 weeks (or 50 weeks or more in some studio films) it takes to get the film actually shot, with the actors on set saying their lines and the cameras rolling and the director saying "Cut."

Unlike a studio production, indie films have smaller crews,  and therefore tend to move more like a small and effective squad than like a massive, lumbering army.  Indie productions can keep costs down by tapping into their reservoir of vendor connections and experienced friends and colleagues who are willing to give better deals.  This means industry professionals and great equipment, but at better rates than studios often get.

Once all the scenes for the film have been shot, the Production ends, and everyone goes home, and then the Producers give the footage to an Post-Production team to start spinning the raw footage into a final movie.  This phase is called, you guessed it, Post-Production.  This is the phase where the film is edited, music is written and recorded, dialogue fixes are made, special effects are added in, etc.

Indie productions also tend to complete their post-production period in about a quarter of the time it takes a studio picture. 

Once the film is completed, it must find a Distributor to release the film to the various different markets in order for the film to earn its money back as well as any profit.  As there are no typical distributors, there is no typical distribution deal, but a ballpark average cut for a distributor to take is 35%.  

The Distributor is a company or entity that we partner with who takes the film, makes prints of it for theatrical exhibition, or makes DVD copies and gets those DVDs on store shelves, or pays us to play the movie on their streaming network, such as Netflix, Hulu, or Amazon Prime.  

The film could secure one single distributor who handles all markets (US and Foreign) and all formats (theatrical, DVD, and all TV, etc.) OR the film could end up with 5 or 25 different distributors, all of which could serve a different format and/or a different territory.  For example, we could have one distributor that handles DVD in China and India, but not theatrical, while we have another distributor that handles worldwide theatrical.

Good distributors know their markets, and know their formats and territories.  A good distributor will know what to do with our film, how to market it, how to get people to come and see it, and how to make money from it.

Some distributors are large companies who only specialize in big movies.  Some distributors are smaller and are able to really hone in on a specific market, or a specific genre or territory.  And many times, a single distributor could end up handling a number of sub-distributors in a variety of different territories and formats.  

There are roads to distribution, and several formats of distribution:

Film Festivals and Film Markets

The first step towards securing distribution for our film is getting it out on the film festival circuit.  The Sundance Film Festival, Tribeca, Toronto, South By Southwest, Slamdance, Telluride - all of these are major film festivals we feel our film would have a great shot at.  But even without getting accepted at one of those major festivals, there are hundreds of other great festivals and film markets with smaller profiles which our film could play and still garner momentum.

With a series of successful showings at film festivals and film markets, and with some favorable press reviews/momentum, we could move the film to limited theatrical runs in specific areas we think might provide the best audience turnout, and contribute to the film's buzz and further momentum.

Press / Distributor Screenings

To contribute to the ongoing buzz, we intend to hold as many press screenings as possible, inviting members of all major media outlets to attend.  If we can garner some favorable reviews, we can use those reviews to attract more press, and therefore more media attention.  The more favorable press we receive, the higher our chances are of securing distribution for the film and for the film to make its money back and then some.

Theatrical Exhibition

One of the most profitable, high-profile venues for distribution is showing the film on an actual movie screen in a theater. The theater owner (aka the EXHIBITOR) pays a percentage of whatever the film takes in at the box office to the studio.  This is also called "rental."  Studios and distributors generally share 50% with the theater owner.   

Big studios can release big films on up to 3,000 or more screens across the country and around the world, while smaller films usually have to start on one or two screen and then build up to a large number of screens if they're successful. 

With a good film festival run and with good word-of-mouth, theatrical distribution is much easier to secure, but still difficult.

VOD, Cable, and Broadcast Television

And then of course, there's free cable tv, pay cable TV, and Video-On-Demand, all of which are experiencing explosive growth worldwide, with the emerging dominance of  services such as Netflix's streaming program, which allows users to select from thousands of movies online, download those movies to their settop players, and watch them whenever they like, all included in the regular monthly Netflix membership.

With the massive amount of digital channels opening up on local cable networks, the need for content to fill those channels has never been greater.  And as those channels get more and more niched, into channels with such specificity as The Golf Channel, The Food Network, etc., the chances of an independent film finding a home on television and on-demand-streaming-services are looking great indeed.

Digital purchases of films rose 50% over last year and continue to rise. | Financial Times

Movie producers have little to fear from online distribution in the long term.  Films this year are expected to earn $29.4 billion from TV and home video and streaming sales. | UK-based Generator Research

Typically, a strong festival run, followed by a high-profile theatrical run boosts the film's chances for all video / streaming / cable / TV deals.