Movie Star Wreck by Finnish filmmaker Timo Vuorensola
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When Finnish filmmaker Timo Vuorensola came up with the idea for his movie Star Wreck, a parody of Star Trek, he knew that looking for conventional distribution would be futile. An amateur, science-fiction comedy with a miniscule budget - and in Finnish, to boot - would hardly be attractive to mainstream studios. So Vuorensola took matters into his own hands: he used a Finnish social networking site to build up an online fan base who contributed to the storyline, made props and even offered their acting skills. In return for the help, Vuorensola released Star Wreck in 2005 online for free. Seven hundred thousand copies were downloaded in the first week alone; to date, the total has now reached 9 million.

"Releasing it for free is just good marketing," he says. "Whether it's through piracy or distribution your film is out there on the Internet, so we decided to harness this." And he has managed to make quite a bit of money out of it. Online sales of merchandise - including T-shirts and collector's editions of the DVD - have generated $430,000 on a film that only cost $21,500 to make, Vuorensola says. He and his team have also now secured a proper distribution deal with Revolver Entertainment in the U.S. and Britain. (See the best movies of 2009.)

In the age of YouTube and viral marketing campaigns, it was only a matter of time before independent filmmakers came to realize that cutting the middleman out of the process is sometimes the best way to guarantee large audiences see their works. This is especially true at a time when funding from studios has been seriously hit by the recession - just as it was on the way up. "The last 10 years has been a renaissance period for independent filmmaking and there has been more money coming into production for films than in any other decade in the history of film," says Jonathan Wolf, managing director of the American Film Market, an annual event where filmmakers and studio executives converge to sign production and distribution deals. But since the economic downturn, many indie movie distributors, including New Line Cinema, Miramax, the Weinstein Company and Paramount Vantage, have either left the market or slashed their funding.

Like Vuorensola, American animator Nina Paley ignored traditional distribution methods and released her film, Sita Sings the Blues, a comic adaptation of the Hindu epic, The Ramayana, directly online earlier this year. She first created a blog, www.ninapaley.com, to develop a community of supporters, and then posted the film on another site, www.sitasingstheblues.com, for free. It was an instant success. "I have my blog, but I essentially gave the film to the audience and they ran with it," Paley says. "It wasn't self-distribution, it was audience distribution." (See the best blogs of the year.)

Paley also sells merchandise on her site, including 35mm prints of the film stamped with a Creative Commons License, so the buyers know the money is going directly to the filmmaker. And she has a donation link through which she has received gifts ranging from $2 to $2,000. To date, Paley has made net profits of $55,000 - and she's secured theatrical distribution in France and the U.S. "What I have learned is that the more freely you show the film, the more audiences will buy the DVD and surrounding merchandise," she says. "With a normal theatrical release you have to spend so much money on advertising and promotion that most independent films lose money."

Even some mainstream filmmakers are starting to use online distribution to build buzz about their projects or simply to get their films to as many people as possible. Last year, Michael Moore released Slacker Uprising - a documentary about his attempts to have President George W. Bush removed from office in the run-up to the 2004 election - online for free in the U.S and Canada to encourage young people to vote. And in May, documentary filmmaker Franny Armstrong launched a website called www.indiescreenings.net, where people can buy a license and then screen her climate-change documentary, The Age of Stupid. Armstrong incentivizes buyers by allowing them to keep any profits from ticket sales. She can't guarantee that her film won't be copied and shared after someone purchases a license to screen it, but she says she had to put her trust in people to spread the word about climate change. (See TIME's coverage of the Copenhagen climate-change conference.)

Liz Rosenthal, founder of Power to the Pixel, an organization that devises new models of film distribution, says the reason many indie directors are turning to the web is that it allows them to better engage with their audiences. "The whole film business has no connection with their audience," she says. "And with any business you have to know your consumer. The Internet has become a free distribution machine, so what can you sell that makes money? Things you can't copy. They need to be things that are based around your audience. Directors cuts, merchandise, 35mm prints of your film." (Read: "Why Netflix Stinks: A Critic's Complaint.")

Soon, the middleman could be a thing of the past. And it may only be a matter of time before movie theatres - popcorn and all - are on the way out, too.

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