Hollywood studio production today is an international merchandising megabusiness.  The conglomerates that own the "Big Six" major studios have determined that action-event movies with high-dollar talent and spectacular special effects best lend themselves to such merchandising.  As a result, they have adopted a strategy of making "tentpoles" in search of blockbuster hits - films that gross over $200 million at the U.S. box office. 

The average production budget for a studio movie in 2006 was $70 million.  As the studios have spent more and more on comic book and action-adventure spectacles, less and less has been left over for what used to be Hollywood’s mainstay – the story-driven drama.  Into this vacuum have come smaller production entities – referred to as independents.  These movies are made with smaller budgets and  increasingly are the movies that garner prestige and awards in Hollywood.  

Since the year 2000, of the 40 Best Picture Academy nominations, 27 were made independently.

Variety reported, "Studios these days don't make Oscar movies.  They may distribute them, but few prestige pictures get made without a handful of mavericks.  Fed up with the conglomerate mindset about what constitutes a good film, these people are willing to put their own money on the line." "Mavericks Reap Oscar Rewards", Variety, March 7-13, 2005.)

Without studio overhead and top dollar for talent, independent movies can be made for much less than a studio feature.  "All but one of the five Motion Picture Academy Best Picture nominees for 2006 (Brokeback Mountain, Crash, Munich, Good Night and Good Luck and Capote) were made for less than $15 million.  The picture that won the Oscar, Crash, was made for $6.5 million." ("Less Cash, More Crash," Time magazine, February 7, 2006.)

The financial rewards can be substantial for the independent investor.  In 2006, "driven by titles like Crash, Brokeback Mountain and March of the Penguins, independents and indie distribs generated $1.3 billion, or 15% of all ticket sales." ("Lost in Transition: Studio Sked Jammed as Town Leans on Niche Pix," Variety, May 22-28, 2006.)

Even without nominations and awards, a well-made independent movie often reaps significant returns.  Phenomenal examples of high theatrical grosses from indie movies with no award recognition are My Big Fat Greek Wedding, $241 million, The Passion of the Christ, $371 million, and Fahrenheit 9/11, $119 million.  

Other independent movies with no award recognition have racked up less but impressive box office gains, such as:  Memento, $25.5 million; Monsoon Wedding, $13.9 million; Bend It Like Beckham, $32.5 million;  Whale Rider, $20.8 million; and Napoleon Dynamite, $45 million.  ("Summer Pix Break Out of Niches and into Plexes", Variety, July 11-17, 2005.)

Those figures do not include revenues from DVD and television, income that typically exceeds what a movie makes at the box office.  Nor do they include revenues from foreign distribution.

Sources of Independent Films

Independent movies come from three sources: 

(1) Specialty divisions owned by each of the major studios, such as Universal's Focus Features that distributed Brokeback Mountain;

(2) Distribution companies that operate independently of the Big Six, such as  Lionsgate that distributed Crash;

(3) Smaller independent production companies that are typically owned and/or controlled by the creative person, often a writer/director or writer/producer in combination with a financial partner or group.  My Big Fat Greek Wedding is an example of a movie produced by such a company.  These smaller independent companies typically make one motion picture at a time with budgets in the range of $5 to $15 million.  They seek to sell their movie to one of the studio divisions or independent distributors that acquire up to half or more of their distribution slates from the small production companies.  Luminous Films falls into this category.