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BY AMY KAUFMAN AND BEN FRITZ
Los Angeles Times
LOS ANGELES
--Struggling to compete with big-budget movies at the box office, indie films are increasingly finding a lucrative niche in one of Hollywood's fastest-growing markets: video on demand.The number of films released in theaters and video on demand at the same time nearly doubled from 2009 to 2011 and is projected to jump about 30 percent this year, to 68.
The dark comedy "Bachelorette" exemplifies the trend: It has grossed about $5.5 million from video-on-demand (or VOD) rentals since premiering in August, compared with a paltry $418,000 earned in theaters.
"It has become harder to generate revenue from independent movies (in theaters) and VOD is our next best option," said Kevin Iwashina of film production and sales company Preferred Content. "This is how we're putting a Band-Aid on our business."
Since the advent of videocassettes in the 1980s, film fans typically had to wait at least three months after a movie opened at a local cinema until they could rent it through cable or the Internet.
But in a market with theatrical advertising costs rising, DVD sales plummeting and the local multiplex dominated by films about superheroes and cartoon animals, independent movie producers are desperate for alternatives.
With VOD, returns may be smaller than for a box office smash, but odds of turning a profit are higher. In addition to "Bachelorette," other recent VOD hits include last month's critically acclaimed drama "Arbitrage," starring Richard Gere. And late last year the simultaneous VOD/theatrical release "Margin Call," an independently financed picture about the financial crisis, was a critical and commercial success and earned an Academy Award nomination for original screenplay.
Nonetheless, many filmmakers remain skeptical that VOD can bring them the same prestige, not to mention profits, as the big screen, where quality movies have always premiered.
"The perception is that VOD movies are crappy," said director Derick Martini, whose film "Hick," starring Blake Lively, was released in theaters and on-demand in May. "Your work can be seen by so many more people, but filmmakers don't make movies for the small screen."
Distributors of independent movies, meanwhile, very much want consumers to find the higher quality offerings available on VOD. And they want to change minds of filmmakers who remain resistant.



