“Indie Filmmakers Hit Their Target” in BusinessWeek Online notes that just as some musicians have decided to walk away from the support (and the overhead) of record labels in order to market directly to their fans, independent filmmakers “are foregoing the conventional path of shopping their films to a distributor…and using the Internet to get their stories in front of people who want to hear them.”

Recognizing that “most independent films never get distributed, and many that do languish in obscurity after brief appearances in theaters” independent filmmakers are finding new ways to find an audience and generate revenue for their work.

In a section titled “Generating More Buzz and Profits” the article cites the example of Note by Note, a documentary about the making of a Steinway piano by filmmaker Ben Niles:

Ben Niles’s first film did well at festivals, but no distributor bought it. So he decided to show Note by Note … in limited screenings, with either himself or a piano at most theaters to interest audiences. (“The piano is a bigger draw than me,” he quips.) He e-mailed piano dealers, music teachers, and technicians in each city to reach the film’s core audience. The result? Viewers flocked to screenings in cities such as Rochester, N.Y., where a 536-seat theater sold out. Note by Note has played in more than 70 markets since November.

The article quotes independent film consultant Peter Broderick, who terms this approach a “semi-theatrical” release, and claims that “it generates more buzz and profits than booking traditional runs for a few weeks in art houses.”

While the BusinessWeek article focuses on documentary films, claiming that these are best suited to this approach because they “often have clear target audiences,” the same can be said of genre-based narrative films.

Last summer, I interviewed independent filmmaker Lance Weiler for Knowledge@Wharton who described how he created a profitable niche for his psychological horror film Head Trauma by creating a similar “semi-theatrical” event that Weiler terms a “cinema ARG”:

Knowledge@Wharton: Your interactive events based around Head Trauma are essentially theatrical presentations. How are they different from a standard theatrical release of a movie?

Weiler: Head Trauma and the cinema alternate reality game — the “cinema ARG” — invert the typical theatrical relationship. When I did the 17-city theatrical release for Head Trauma, it was a 50-50 split. I didn’t 4-wall any of the screens — 4-wall is when you rent the theater and get 100% of the box office. But you’ve laid out the cash, so it’s a dangerous proposition.

I came out ahead for the entire theatrical [run], but with this event-driven model I’ve inverted the relationship. Now they are [giving me] a minimum guarantee. So before I even step foot into the building, I’ve already done better than I was doing theatrically in a week-long run.

Events are interesting for independent films, because you have to try to do something different from what’s happening in the market.

Knowledge@Wharton: But in the case of the Head Trauma ARG, you have musical performers and a bigger ensemble involved in the presentation. Aren’t your overhead costs higher?

Weiler: It depends on how you structure it. If you find the right partners, you can get away from a lot of the really hard costs. We put on [the debut event in Philadelphia in March] for next to nothing. I came out ahead and everybody got paid. Outside of the band’s performance and what they had to pay, I maxed out on rental [costs] of like $150 for amps and that was it.

Everything else was stitched together from things that I could borrow or what-not. In New York [at the Museum of the Moving Image] it’s a little bit different. Now there is a larger guarantee that we walk in with. So now there’s more money to do things.

Knowledge@Wharton: How does the guarantee work?

Weiler: It is basically a minimum guaranteed [payment] — saying, “[We’ll give you] $2,000, $3,000, $4,000 to do this event. Once we break even on what we’ve paid you, then we do a split with you.” So it’s a much better relationship, because you know that you’re making that money when you come in. It’s not as speculative as trying to get people into the theater.

The BusinessWeek article also underscores another point Weiler emphasizes: the value of retaining the rights to your own work. The co-directors of the documentary What’s Your Point, Honey? are said to have “walked away from a ‘low six-figure’ offer from a distributor so they could hold on to the rights, organize their own screenings, and sell DVDs directly through their Web site.”

Weiler similarly expressed the downside of accepting a “six-figure” deal from a major distributor when he spoke to Knowledge@Wharton:

Weiler: A lot of times what happens is you need to deliver the film with the advance that you’re given. If you need to clear music, do sound transfers, do film transfers, whatever, you’re basically paying out of your advance to do that. So if you look at a $100,000 advance, it takes you about $30,000 to $60,000 to deliver the film and you’re looking at $40,000 on the other side. What’s the benefit to having a large studio’s logo in front of your film?

The economics just don’t make sense — or they didn’t make sense to me. I knew that I could do a lot with the movie that other people wouldn’t let me do, like the cinema alternate reality game that I couldn’t have done if I had given [the rights] to some of the people who wanted the film.

So from my perspective, I said, “I want to carve up these rights,” because then I have a better shot at increasing the profit; I have a better shot at being able to try interesting new things. To me, that was more valuable.

Knowledge@Wharton: So the distributor has the rights to distribute the DVD, but you retain rights for other uses?

Weiler: Yes, exactly.

Knowledge@Wharton: And a deal like that would be hard to strike with a big studio label?

Weiler: Definitely. They want the world — as they say, “the universe.” So if we colonize the moon, when people are waiting at the moon station an d they want to watch something — they want those rights. They want to own it.

Both articles are available online:

• BusinessWeek: Indie Filmmakers Hit Their Target (via Scott Kirsner)

• Knowledge@Wharton: The Movies Meet Web 2.0: Lance Weiler on the New Economic Model for Independent Cinema (Free registration required)

• Media Trends