Tentpole films rule while indies struggle to hang on

Each week brings us new signals that there is no such thing as a movie industry anymore. That entity loosely known as Hollywood has deftly divided itself into two separate industries that (fortunately) have little to do with each other.

On the one hand, there’s the industry of tentpoles and 3D franchises — a business newly re-energized by the success of “Avatar” and by the $660 million decision to convert 14,000 more screens to digital and 3D. This sector clearly is finding an expanding audience worldwide.

But there’s also a growing audience for that other sector of the movie business encompassing indie movies and art films — for the sake of simplicity, let’s call it “cinema.” The distribution apparatus of this sector is shrinking, not expanding, and so is its financial base. And nobody seems to be rushing to do anything about it.

Spending divide

The “Avatar” vs. “Hurt Locker” Oscar race illuminates the key distinction between the two sectors. The tentpole business is a study in excess, a perfect game for corporate spendaholics. “Cinema” is all about discipline, an exercise in ruthless budget-cutting. Tentpoles are funded by corporate fiat. Movies like “Hurt Locker” or “Precious” or “An Education” are funded by accidents of history.

We all know that the tentpole industry has a bountiful future. I’m not so certain about the future of cinema.

Some insiders worry that the imminent disappearance of the film canister may prove to be a metaphor for the state of cinema. “I am concerned about the diminishing supply of ‘good’ and marketable specialty films,” observes Ted Mundorff, CEO of the superbly run Landmark circuit (63 theaters, including the banner complex in Los Angeles).

Landmark registered record business a year ago — the “Slumdog Millionaire” year — but has needed to look for substantially more films this year to match those record returns. The supply of well-crafted, accessible cinema is not keeping up with the demand — a fact reflected in the decline in acquisitions at markets like Sundance and Berlin over the past few years.

Paradoxically, more aspiring indie films are being shot thanks to the low barrier to entry (cameras and editing technology are cheap) but that doesn’t help circuits like Landmark, which are looking for films that are accessible, that demonstrate a modicum of professionalism and, hence, can build over time.

“Indie films need to linger at theaters,” points out Michael Barker, co-head of Sony Classics. ” ‘An Education’ was ‘discovered’ by audiences over a period of several weeks.” The film, an Oscar nominee, may end up grossing about $15 million in the U.S., higher than “Hurt Locker’s” $12 million.

Sony Classics and Fox Searchlight remain the only two entities in the speciality film world that are controlled by majors, yet both operate with singular autonomy. Over the past year or two the other majors have retreated from the indie business, having driven up production and marketing costs.

The exodus in the long run will surely benefit every sector of the business. The studios are free once again to focus on what they do best — tyrannizing young audiences into seeing their sequels and tentpoles. That leaves the indie distributors to figure out how to reconstruct what once was a thriving mini-industry before the incursion of the majors. This entails not only fiscal discipline but also shrewd marketing aimed at the sector of the audience that the majors all but ignore: grown-ups.

Yes, grownups, too, love their movies. There’s proliferation of new schemes to make indie films available on demand — the Tribeca Film Festival disclosed one such plan this week tied to its festival. Rainbow Media (through its IFC and Sundance Channels) and Magnolia Pictures also are promoting such mechanisms, and YouTube introduced a movie rental option at the last Sundance festival.

But this audience also has demonstrated its willingness to pay to see its favored films at movie theaters if given the opportunity. It’s even willing to make the ultimate sacrifice — to pay to see a movie that doesn’t have a sequel.

Now, that’s dedication.

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