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Michael Jacobs, a filmmaker based in San Francisco, is the director of a movie called Audience of One. It's a documentary about a Pentecostal minister who says he's gotten the divine green light to make a mega-budget, religious science-fiction epic. If you attended one of twenty-odd regional film festivals in the past two years, you've probably heard of the film. If you didn't, you probably don't know it exists.

The film was well-received by audiences, especially at the True/False Film Fest in Columbia, Missouri, a documentary festival that has become a filmmakers' favorite. But its popularity didn't translate into a distribution deal. Jacobs says the film's objectivity — i.e., its refusal to blatantly mock its subject — didn't make it easy to market. "It doesn't reaffirm everything you already believe about the religious right," he says.

So what happens now? On the strength of Audience of One, Jacobs got the go-ahead to produce ten episodes of a series called American Dreamers for Sony Pictures' online-TV site, Crackle.com. But countless other filmmakers are stranded, as distributors cinch their wallets, exhibitors look vainly for indie success stories, and marketing costs continue to skyrocket in a flatlining economy. Even so, a few models suggest ways to reboot or reroute a system that filmmakers and programmers agree needs fixing.

In a year that has seen a few narrative features opt for self-distribution — director Randall Miller's Bottle Shock (which earned a respectable $4 million); the indie comedy Last Stop for Paul; Ronald Bronstein's way-underground whatsit Frownland — perhaps the most illustrative example of current conditions is Lance Hammer's Ballast. A spare, beautifully photographed, Mississippi-set drama shot with unknown actors, the low-budget film emerged as one of the sensations of Sundance 2008, earning Hammer the directing prize and garnering crucial critical support.

The day after the festival, Hammer says, he and venerated indie distributor IFC Films reached terms for a deal. But as the contract took shape, Hammer found that he was losing many of his key points, including the right to the final cut. Meanwhile, a thirty-day exclusivity deal with Blockbuster was suddenly extending into years, and Hammer was asked to sign away digital rights to his film for twenty years. After months of negotiations, the writer-director came away convinced that for the modest advance he was getting, he didn't want to settle for what his financial advisors called "business as usual."

"'Business as usual' is they'd pay you for [your movie], and they don't pay you for it anymore," says Hammer. Instead, he put together a small team of employees and began booking the film himself through his Alluvial Film Company. In ten weeks, as of December 7, the film had grossed slightly more than $76,000 — a daunting return for months of effort. Yet Hammer had no illusions that he would burn up the box office.

"I threw away the notion of making money," says the director, who regards the film's theatrical release as both a learning experience for future efforts and a means of creating awareness for its eventual DVD release, where the profit margin is much higher. The problem facing any feature in the glutted marketplace is lack of name recognition, and a lone man with film reels under his arm doesn't have $50 million to spend on print and TV advertising.

The main thing he's learned, Hammer says, is to cultivate and mobilize "the 1,000 true fans" who will spread the word online about a film via social networking sites and blogs. But it was worth distributing Ballast himself, he says, just to circumvent "this culture of abuse" that rigs the system against the filmmaker.

Even genre movies are gambling on self-distribution again, such as the grisly shocker Wicked Lake. Its production company, Fever Dreams, gave it a short major-market theatrical release last spring before the Media Blasters subsidiary, Shriek Show, put it out on DVD. Fever Dreams managing director Carl Morano says that many unexplored options exist for filmmakers who just want their work to be seen. He cites sales outlets such as military bases, where one box-art photo of busty bloodsuckers beats tens of thousands in P&A costs.

But theatrical distribution remains the dream, however increasingly impractical. The key to developing an audience for no-name films without promotion budgets, says True/False Film Fest director Paul Sturtz, is "extending the festival atmosphere throughout the year" by organizing city-to-city tours for filmmakers and their work, effectively bypassing distributors and going directly to theaters.

"The idea of an underground railroad is something we're trying to promote," Sturtz says. A test case of sorts was The Order of Myths, director Margaret Brown's excellent documentary about the centuries-old tradition of segregated Mardi Gras celebrations in Mobile, Alabama. Though it had distribution, through New York-based Cinema Guild, Sturtz was convinced it was the kind of thought-provoking film that would take off, given the filmmaker's presence and a town-hall atmosphere.

Together with Toby Leonard (who books the independent Belcourt Theater in Nashville), Sturtz and Columbia's Ragtag Theater helped put together a five-city tour for Brown to theaters involved in the Sundance Institute's Art House Project — a coalition of independent movie houses, founded in 2006, that now has eighteen affiliate venues from Brooklyn to Boulder. The tour did well, though it would probably have drawn even bigger crowds with more time for grassroots promotion.

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