Independent film distribution makes or breaks careers and divides the films that people actually see from those that will quietly disappear into obscurity. Distribution is the critical element that defines whether or not a film is truly independent. If a filmmaker has no distribution contract in place when shooting begins and they start spending investors' money, then the movie is an independent film.
In that case, typically no one will consider distributing the film until it is completed and has been seen in film festivals and film markets. Even then, there is no guarantee of distribution. Filmmaking is a business and distributors want to make money by choosing the films that they think audiences most want to see. So a well-made heartfelt independent film that gets into a major film festival may not make it into your local multiplex if distributors and theatre owners doubt that there can be a significant audience for it.
Fortunately, for films with smaller potential audiences, there are new ways to distribute films profitably online. Streaming and video-on-demand downloading are becoming significant revenue streams for independent filmmakers. Internet distribution is particularly useful because most people who might be interested in seeing a film don't live in New York or Los Angeles, typically the only towns where many independent films are shown theatrically. Viewers also aren't restricted to seeing the films during the few short weeks that films are in theatres.
While audiences have access to independent films through rental stores like Blockbuster and the mail service of Netflix, internet distribution can offer a much broader selection of films and instant gratification. If it's midnight in Singapore and you get the urge to watch a Swedish horror film, you can. Another advantage of internet distribution can be timing. Services such as the Independent Film Channel cable network can offer video on demand for films that it distributes as soon as they are released in theatres, so you may not have to wait months before a film you are unable to see in a distant theatre can be seen on your very own small screen.
As studio distribution executives and independent distribution companies watch revenues from DVD sales -- a major source of profit -- decline, video on demand is seen as a bright and growing stream of revenue. As internet technologies become more sophisticated, film audiences are migrating towards the internet and away from DVD sales and rentals at local video stories.
When all is said and done, however, every filmmaker knows that independent film distribution is strongly determined by theatrical release. How a film performs in theatres is a strong determinant of how a film will perform in DVD, internet, television, cable, and other distribution markets. Box office revenues also determine how much a film can earn in other distribution methods. If a film does well in its first few days in theatres, expect distributors to pay up for rights to show the film using other distribution methods or in other countries. If not, the distributors may be much less interested and much more cautious about what they'll pay to distribute a film.
A film that gets into theatres -- and most don't -- and does well in theatres will receive lots of publicity and press. It may also be nominated for awards and have strong word of mouth awareness. People want to see films that they've heard of or that their friends have recommended. There is also the shared experience of enjoying a great story with perhaps hundreds of other people who are experiencing it with you. Even in the age of the internet, getting your independent film into theatres alongside Hollywood blockbusters is still the most desired form of distribution, particularly for films that don't have big stars or big explosions in them or for genres that don't have a large built in audience like drama.
Competition for limited theatre screens is keen and investors don't like to lose money on films that won't find an audience. Distribution has become such an important factor in an independent film's commercial success or failure that investors are now asking filmmakers whom they expect will be the audience for their films, even before they are made. Even with promise of new revenue streams through internet distribution, that remains the critical question and in many cases determines whether a movie will ever get made.