A great proxy for the domestic (U.S. and Canadian) independent film market is the domestic limited release theatrical market. That is, by examining films that opened at 1,000 box office venues or fewer, one gets a strong sense of the market for independent films. Despite constantly evolving new media platforms, a successful box office release is still the only, and most sought-after, path to major indie financial success.

Independent films can be described as those movies receiving no funding from one of the six major studios (Disney, Fox, Paramount, Sony, Universal, and Warner Bros.). Independent films dominate the limited release theatrical market, with 184 being released in the first half of the year, as opposed to only 12 studio-financed films.

Let’s take a look at what the first half of the year yielded.

Well, it seems that if a filmmaker wants their film to find a theatrical distributor, the film should (1) be private equity financed (more than 70% of the budget); and (2) debut at Sundance, Toronto, or Cannes:

(1)  43% of the films released in the first half of 2009 were private equity financed, and another 17% were distributor financed (> 30% of the budget), with the remaining 40% financed via some other funding combination, such as foreign government subsidies, foreign distributor financing, presales, and/or debt. Why the tendency toward private equity? Often independent filmmakers are first, second, or third time directors or producers seeking to prove their worth. Without a successful track record, such filmmakers must rely on the faith of high net worth individuals to fund their talents, as more sophisticated financing arrangements generally demand a more developed package (e.g., a script with an established director, producer, and cast).

(2)  Why Sundance, Toronto, or Cannes? Simply put, these are three of the most monitored and respected festivals in the world. They are notoriously difficult to gain entrance to, and domestic distribution executives use them as an initial signal of a film’s quality. 21 first-half 2009 films debuted at Sundance, another 21 debuted at Toronto, and 18 debuted at Cannes. Tribeca was not terribly far behind with 14 films. Only 40 films (20%) did not debut at any festival.

Once a film secures distribution, the spotlight turns to the distributor. Evaluating distributors is particularly difficult, as their fate often rests in the public’s acceptance or rejection of a project. At the time a distributor decides to take on a film, no statistical method exists for determining whether such a film will succeed or fail. Thus, judging the success of a distributor by the box office of its films makes no sense. A distributor that positions a film for public acceptance must ultimately acquiesce to the most unpredictable, but critical, factor in a film’s future: the public.

Perhaps it makes more sense to examine which distributors keep films in theaters the longest. Taking a look at the first quarter (Q1) of 2009, 98 films were released, of which 44 were in theaters for 6 weeks or longer. (Quarter 2 films cannot be analyzed since many have not approached the end of their runs.)

Naturally, some of these films were kept in theaters because they were successful. However, if we examine which films were not necessarily successful, but nonetheless stayed in theaters for at least 6 weeks, we can say that the distributors of these films were likely committed to crafting a meaningful theatrical run. (By “meaningful,” I mean a theatrical run that established audience awareness for later formats – DVD, pay TV, etc. – and gave the film a decent chance to turn into a “hit.”) Such distributors would be the apparent ideal for introducing a project to the marketplace.

Choosing a box office threshold of $500k to mean “success” (which only 20 films out of Q1’s 98 exceeded), 29 failed to exceed the $500k threshold but, nonetheless, were kept in theaters for 6 weeks or more by their distributors. These distributors were First Run Features and Zeitgeist Films, each with three films meeting the criteria; Argot Pictures, IFC Films, Koch Lorber Films, Regent Releasing (now Here Films), Rialto Pictures (handling reissues), Strand Releasing, and The Weinstein Company, each with two films meeting the criteria; and 9 others handling one film each.

With the exception of The Weinstein Company (whose films were budgeted at over $15 million, with one approaching $50 million – both estimated) and Rialto Pictures (who handled reissues), the other seven aforementioned distributors appear to be the top ones, thus far this year, for giving an independent film its best shot at theatrical success and beyond.

The raw data for this article can be found here.

Jeremy Juuso is the author of Getting the Money: A Step-by-Step Guide for Writing Business Plans for Film. He is also the founder of Jeremy Juuso Consulting (www.jeremyjuuso.com), a firm specializing in the writing of film business proposals, analysis of film data, and education of investors on the basics of the movie business. He may be reached at consulting@jeremyjuuso.com.

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