By Martin Südderman

IT’S DE RIGEUR these days for a pricey animated or FX pic like Dinosaur or Star Wars: The Phantom Menace to be screened electronically, via hard-drive, in some specially digitized multiplex. Meanwhile, however, industry-wide installation of digital projectors remains stymied by the aesthetic objections of 24-frame romantics and the poverty-stricken cries of soon-to-be-in-Chapter-11 theater owners.

At a recent Booz-Allen conference on digital media-moderated by Filmmaker editor Scott Macaulay, producer and Studionext topper Ira Deutchman spotted an opportunity for independents in the current stalemate.

"For smaller movies, digital affords an opportunity in the theatrical marketplace that’s never existed before," Deutchman observed. "There’s always been an alternative business model for smaller independent films that we semi-affectionately call semi-theatrical: universities, art museums and non-profit theaters. These theaters reach their audience through public relations and mailing lists, and by creating a sense of membership, not through marketing dollars. They limit film engagements to a couple of days or a week, forcing audiences to rush to see a movie. The business a film would normally do over two or three weeks is compressed into a few days, and [semi-theatrical houses] have a higher profit margin.

"The reason semi-theatrical has always remained marginal is that prints are so expensive," Deutchman continued. "Films that go out through semi-theatrical distribution use one or two prints and send them slowly around the country. The problem is the national media doesn’t care. If you are playing at New York City’s Film Forum, you’re not going to get a review in Entertainment Weekly. But once you are in the digital realm, the possibility exists for a film to play in 200, 300 or 400 theaters on a semi-theatrical basis on the same day without any incremental cost. Suddenly you’re on the map for Entertainment Weekly, Time and Newsweek, which completely changes the possibilities in the semi-theatrical business. I think similar things are possible in the digital realm in everything from video-on-demand to the way DVDs are distributed. Every time you remove one middle person, you reduce your costs. You get to the point where the economics of distributing small films are much more realistic."