At a Sundance press breakfast this morning IFC Films announced a partnership with SXSW in which five films screening at the festival will be available simultaneously on IFC’s on-demand platform. The films include Joe Swanberg’s premiering Alexander the Last as well as our Filmmaker mag cover film Medicine for Melancholy, which will return to the festival for a special screening.

Attending the event was Steven Soderbergh, who spoke about independent filmmakers’ need to “let go of the fantasy” that their film will receive a conventional theatrical release in this tough climate. He also quipped that the Festival Direct program appealed to him because of the name’s association with Fresh Direct, the online service he uses for his grocery shopping. IFC’s Jonathan Sehring mentioned one advantage of the program is its ability to reduce the cost of releasing a film. He argued that the releasing strategy will allow producers and sales agents to avoid the problems of studio accounting.

Swanberg said, “These movies have a moment when people are looking at them, and (for my movies) that was the festival premiere.” He spoke about the difficulty of sustaining interest in a film across the duration of a slow multi-city roll-out, and said that he prefers the concept of creating a single event that will drive ancillary distribution in new media platforms.

When asked whether on demand could cannibalize festival attendance, SXSW head Janet Pierson said a festival’s mission is to connect talent with audiences, and she echoed Swanberg’s comments about “capitalizing on the wave” of interest in a film that a festival premiere creates. She said she thinks that a festival premiere is a different experience than home viewing and believes audiences will still thirst for that in-person event.

Journalist and fest programmer Tom Hall asked if this deal will kill the idea of a festival run for filmmakers like Swanberg, who have built up audiences in different cities by playing at the regional fests. Swanberg threw the question back at the programmers in the audience: “You tell me whether it will kill the festival run. All I can do is send you the film and you will have to decide if you don’t want to program it because it’s on VOD.”

Spout’s Karina Longworth asked Sehring whether on demand revenue numbers will ever be publicly released like box office numbers are now; Sehring cited information available on certain tracking services like Rentrak but claimed that affiliate agreeents currently prevent the public release of these numbers.

When asked about how BluRay will impact our future viewing, Soderbergh called it the “worst launch of a new format in the history of formats. I think they had a window of opportunity they totally missed because of the HD/Blu-Ray(war).”