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Indies still looking for Internet equation

Filmmakers consider sites like Netflix, iTunes

If only more indie filmmakers could sell as many Internet downloads as “Helvetica,” the future of indie distribution might look more promising. Gary Hustwit’s documentary about the ubiquitous font has taken in a six-figure sum from its showing on iTunes at $9.99 per download.

But while more success stories are starting to be seen, the indie download business is still having problems gaining traction. The power of the Internet was supposed to level the playing field on which independent filmmakers and studios compete for audiences. So what happened?

A decade after the dot-com boom, when the Web promised to make any piece of content globally accessible to any interested viewer, a dominant online destination for indie film has failed to emerge — though many have tried.

Earlier this year, San Francisco-based Caachi quietly shut down, and world cinema purveyor Jaman let go most of its staff. Two of the first sites to try to connect cinephiles with streaming and downloadable indie films, GreenCine and Intertainer, have since exited that business.

And while Hulu.com, a site geared to mainstream TV and movie content, is reaching more than six million unique visitors a month, SnagFilms, a site dedicated to independent documentaries like “The Future of Food,” is barely reaching 100,000, according to the Internet traffic-monitoring service Compete.com.

One thing the Internet has clearly changed, observes distribution consultant Adam Chapnick, is access to an audience. “But having easy access to the global audience doesn’t get anyone to see your movie,” he says. A solid marketing strategy, whether traditional or digital, is still essential.

But distributor Freyr Thor, of Vanguard Cinema says, “Just because these specialty indie platforms haven’t succeeded, that doesn’t mean one cannot succeed. There’s a patience factor and a money factor that have been missing.”

One of the newest contenders is the Auteurs, a Palo Alto-based site featuring films by Luis Bunuel, Roman Polanski, and Wong Kar-wai, launched in late 2008.

Other indie film sites that haven’t succeeded “were not social enough,” says Efe Cakarel, Auteurs CEO. “Our members not only can watch films online, but also discuss the latest films with their friends on Facebook and Twitter and meet others who share their taste in film.”

But distributors, producers and indie directors today say that most of their Internet revenues comes from two places: the DVD rental service Netflix, which offers an online streaming service to its members, and Apple’s iTunes. A few mention YouTube, Amazon.com and Massachusetts-based EZTakes as other online outlets with good revenue potential — with the emphasis on “potential.”

Brooklyn-based helmer Hustwit says that iTunes has generated the lion’s share of digital income for his 2007 doc “Helvetica,” which has been on iTunes’ top-10 list of most popular docs for more than a year. Eric Lemasters, senior vice president of digital at E1Entertainment (formerly Koch Entertainment), says that tech-oriented docs like “Welcome to Macintosh” have done well on iTunes, but that iTunes and Netflix are close competitors. Vanguard, which handles digital distribution of titles like “Factory Girl” and “Raising Daylight,” generates more money on a per-title basis from Netflix than from iTunes, Thor says.

Filmmakers complain that independent films can be difficult to find on iTunes. “Their navigation is just bad,” helmer Joe Swanberg says. And Thor says that Apple has rejected all of the subtitled foreign films he has submitted for inclusion. (The service currently carries fewer than 30 foreign films.)

But while Apple offers a fairly straightforward 70/30 revenue split with most rights-holders (Apple keeps 30% of rentals and sales), Netflix’s streaming terms are different. The site pays a flat annual fee to make a film available on its “Watch Instantly” streaming service, whether five people or five thousand choose to view it over that period.

Distributors say the annual fee for online streaming varies, depending on how popular Netflix predicts a title will be; part of that calculus is based on how many of Netflix’s 10 million members have added the title to the list of DVDs they plan to rent. But the annual license fee, says Thor, has in general been rising over the three years his company has been working with Netflix.

Swanberg, director of the 2009 microbudget drama “Alexander the Last,” says that San Francisco distributor Heretic Films had been offering some of his earlier films to Caachi — but both the distributor and Caachi went out of business.

Swanberg says that although his own films aren’t yet available on Netflix’s streaming service, it’s his preferred method of watching movies at home. He uses a set-top box from Roku to watch the digitally delivered content on his television.

YouTube is considering adding paid movie rentals to its ad-supported site, but documentary filmmaker Hunter Weeks says that wasn’t offered to him as an option when “10 Yards,” his 2008 doc about fantasy football leagues, started streaming on the site in its entirety last month. He expects to make “a couple grand” from YouTube’s “partner program,” which shares some advertising revenue with content creators. Weeks’ doc quickly racked up 100,000 views after it was featured on YouTube’s homepage.

Producer Ted Hope (“Adventureland,” “The Savages”) anticipates independent filmmakers who are willing to tinker with traditional release windows “absolutely could gain an advantage” in the online world. “I think we’ll start to see more folks coming out of Sundance and other festivals trying new models, to make their films available in different digital formats when they’re at the height of their media attention, rather than nine or 10 months later,” he says.

Director Cory McAbee, who is showing his sci-fi Western “Stingray Sam” at festivals and limited-run engagements, says he hasn’t felt resistance from festivals or other venues, despite the fact he is simultaneously selling the film in digital form on his website.

Vanguard’s Thor is hopeful that “a true independent digital cinematheque” will emerge at some point. But “you need three things to make it happen: a long-term vision, an easy-to-use interface, and money,” he says.

And those three stars have not yet aligned.

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