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For indie filmmakers theatrical release is an avenue to digital success

/ Source: Reuters

PARK CITY, Utah (Reuters) - Amid the snow-covered streets of Park City, Utah, the fates of numerous films lie in the hands of film executives as they place bets on which movies screened at the annual Sundance Film Festival will be the next big box office hit.

For independent filmmakers, the big screen still holds supreme. But it can also be used to drum up a larger audience on digital platforms.

The trend comes as digital companies such as Inc and IAC/InterActiveCorp's Vimeo are looking to acquire movies as they compete, or partner with, film studios for a bigger audience share.

Brothers Mark and Jay Duplass, known for movies such as "Jeff Who Lives At Home," sold three films at Sundance this year, including "Tangerine" and "The Overnight," and all are heading to the big screen.

The cost of a theatrical release, including distribution and spending on press and advertising, raises the threshold for achieving success. By comparison, a digital release is less costly for filmmakers and could offer a bigger payout if a movie becomes a hit.

While "Tangerine" doesn't have big stars, it can grow through strong reviews, Mark Duplass said. "The Overnight," starring Adam Scott and Jason, could have gone straight to digital release, but Duplass said it was worth "taking a risk" on the cost of a theatrical release.

"When I see a movie that can really break out at the movie theaters, I feel like I do want to give it a chance," he said.

But a digital release can work alongside a theatrical release and capitalize on the box office. 

The Duplass brothers last week signed a deal to produce four films exclusively for Netflix Inc's subscription-based digital streaming service, but with an option to show them at movie theaters beforehand.

Similarly, talent agency William Morris Endeavor is opting for theatrical releases in most cases, while also finding ways to pair with the digital world.

Out of the 16 films that William Morris Endeavor has for sale at Sundance this year, only two so far have been sold in a multi-platform deal, in which a film is released simultaneously in theaters and on digital and VOD platforms. 

The rest are all theatrical releases, though Graham Taylor, head of film financing and distribution at William Morris Endeavor, is an advocate of narrowing the window between a film's theatrical release and subsequent digital, VOD and home entertainment release.

"There is a cost efficiency" to using the money spent ahead of a movie's debut at theaters to tie into digital release soon after, he said.


Joe Swanberg, director of this year's Sundance film "Digging For Fire," said he shot it on 35mm film specifically to show at movie theaters.

But he acknowledged that a digital platform may be the right fit for certain movies. While his 2014 film "Happy Christmas" made only $30,000 across nine U.S. theaters, it found its audience on Netflix, he said.

"Theatrical release is a really nice commercial for your movie, but also closing those windows between theatrical and digital isn't cannibalization," he said. "You're just doubling your access to an audience."

Netflix has 57 million subscribers worldwide and its clients have watched more independent films than on any other digital platform, said Jonathan Friedland, the company's chief communications officer.

"The economics of going the traditional theatrical release route are somewhat unfavorable for filmmakers," Friedland said.

And even as movie theaters remain a favored debut venue for many indie films, digital platforms offer the advantage of identifying and targeting a specific audience.

    "A lot of people are going direct to digital and this makes sense for documentaries or films that have a subject that clearly has a passionate audience dispersed around the world," said Vimeo Chief Executive Officer Kerry Trainor.

    Unlike subscription-based Netflix, Vimeo is an open, high-end video sharing site that allows people to charge for their content. It has 26 million subscribers.

    Director Spike Lee debuted his latest film, "Da Sweet Blood of Jesus," on Vimeo a month before its scheduled Feb. 13 theatrical release, pricing rentals at $9.99 and purchases at $14.99.

    "This is the future of film distribution. Please join us," Lee said in a statement.

(Reporting by Piya Sinha-Roy; Editing by Leslie Adler)