As the number of theaters willing to showcase independent film dwindles and the number of theaters showing film overall is reduced due to factors such as low attendance, rising costs and the popularity of internet distribution, film festivals become an increasingly attractive option to moviegoers, filmmakers, and critics looking to support independent film.
In fact, the sheer volume of independent film being produced in America at present indicates that only the top 5% of independent film will ever be released in theaters, making the festival setting one of, if not the only place to view these films as they were intended to be seen: on the large screen, in a quiet room, with 200 other strangers rapt in attention.
As you may know, in all but the largest festivals such as Cannes and Tribeca, most of the films being screened will be either independent productions or foreign films, many of the latter also filmed on limited budgets in climate similar to American independents. What you may not know is that film festivals worldwide have various mechanisms in place to support independent films beyond simply exhibiting their works and inviting filmmakers to attend screenings.
Nearly all festivals offer awards and recognition for top-ranking films, often including cash prizes, and, in some cases, distribution deals to help support independent films in their efforts to reach audiences on a larger scale. Some festivals also function as marketplaces, where distributors shop by audience response for new, hot properties to expose to a broader public (and hopefully bring them a tidy profit).
Additionally, many festivals use development funding to create grants to enable filmmakers to complete films or reduce production costs and enable them to embark on previously unrealizable projects. Other festivals offer programs similar to artist's residencies--the Cannes sidebar Director's Fortnight is one such program, offering writers and directors time and resources to work on films in a supportive environment. After spending time at Cannes developing their film, the filmmaker's only charge is to return the next year to exhibit his or her work.
Some of the festival's biggest success stories have come from directors engaged as part of the Director's Fortnight program, including 2007 Palm d'Or winner, Julian Schnabel's "The Diving Bell and the Butterfly." Even smaller film festivals without the large degree of monetary support available to a festival as large as Cannes are searching every year for new ways to support independent film and independent filmmakers. Recently, many forward-thinking festivals have begun to investigate new opportunities in web-deployed video and screening rooms, often broadcasting simultaneously with festival programming.
In some cases, festivals have made their entire catalog available online to increase exposure of their films and build their brand in the internet sphere. In addition to providing a forum for the films themselves, as print-space disappears for traditional film scholarship of the type espoused by fading figures such as Roger Ebert, Pauline Kael and Leonard Maltin, festival programs often become sought-after vessels for film analysis, criticism, and new thought on craft.