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Indie Digital Movie Distribution Gets Targeted

Independent film distributors usually enjoy good times when new distribution avenues first emerge, because they aggressively license their films while the more cautious major studios hang back. So why haven't Indies cashed in on the digital boom with downloads from websites and services like iTunes -- to the extent they did in the early days of the videocassette takeoff two decades ago?

"In a world where every film ever made is available anytime, consumers will need guidance," says John Sloss, co-founder of Cinetic Media, a leading consultant to the film industry. "The full infrastructure and navigation are not quite there yet."

Sloss believes that buys of digital movie downloads will gravitate to web services that market films based on consumers' expressed interests, past buying patterns, and behavior -- as Amazon already does with books by sending targeted recommendation emails to consumers saying "based on books you bought, you might like this too..."

Another aspect of his scenario is that release windows of films -- to video-on-demand, handhelds and DVDs -- will compress to be simultaneous with theatrical release. "I think a two-week gap between theatrical and other windows will be a lot in the future," Sloss adds. He served as executive producer for the Oscar-winning murder drama 'Boys Don't Cry,' and helped packaged adventure comedy 'Little Miss Sunshine' and romantic drama 'Far From Heaven.'

To date, some low budget Indie films have tried clustering theatrical, online download and/or video release without significant success. Meanwhile, window creep is gradual for major studio films. With the typical cost for a night out at the movies, Sloss feels consumers would be willing to pay a premium for the convenience of in-home viewing via pay-per-view at or near theatrical release.

Kagan Research estimates the seven top Indie theatrical distributors in the U.S. -- which include Lionsgate and Warner Independent Pictures -- averaged a gross profit margin of 26 percent in 2005, less than the 39 percent of 10 major distributors. Warner Independent leads on the strength of nature documentary blockbuster 'March of the Penguins.'

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