Here’s where the film business stands now.
Theatrical distribution has become an opening weekend market. If a film doesn’t do huge numbers on its first day out, there is no chance that the film will make money. In this model, only big films with huge m+a costs and a dominant number of screens have any chance. All other films have been or are being squeezed out. Forget about indie films in this environment.
DVD sales are shrinking. The economy is probably the dominant reason, but piracy is taking off and also, I would say, the fact that all the ads go into opening day, is also playing a part. For indie films, this is the worst thing ever, because the model of opening a film in NY and LA and then making a killing on DVD is finished. And that’s the only market there is for this stuff!
Internet streaming may be the way of the future, but, for various and not very interesting reasons, it’s not here yet and it’s not coming anytime soon.
Piracy is accelerating. All the creative industries are suffering because of the internet. Everything on the internet is available for free and immediately, so to compete with that you can’t make any money.
It’s a bleak scene, but there are some things that I have thought of because of this situation and a little historical research.
First of all, there was a time when the only way to see a film – and the only way to finance it – was to see it in a theater. Once a film was finished playing, sometimes after year-long runs and sometimes at places called 2nd run theaters, the film was gone. It was done. Over. You’d never see it again. Rep houses didn’t come along until the late 60’s, and they were never a big part of a revenue stream until VHS came along.
At this time, budgets were lower and there wasn’t such a gap between blockbuster and small film.
Couldn’t this model still work? I think it could, but the opening weekend model has to change, and I think that it will, because, I can’t imagine it sustaining itself.
All films work in theaters because of word of mouth. Hollywood is a machine that has learned (not completely) to manipulate that word of mouth. Small films only have word of mouth. Word of mouth only works if it has time to spread. If a film opens, has people talking, and is then gone for several months until it is available on DVD, that’s a waste. It needs to stick around the theaters.
Theatrical viewing as an experience cannot be pirated. It is a tried and tested source of income.
Would it make sense to put a film into theaters and then say, this film will never be available on DVD? It sounds crazy now, but, it’s a thought.
Pango Films Blog 
I couldn’t agree more with you about your thoughts on Opening Weekend Marketing. the studios find themselves asking why a decently promoted, but not much “hyped” film is doing poorly every week, surely it couldn’t be that people already saw it because the first weekend was promoted so heavily… could it?
After major studio films are released i never seen any promotion for them beyond the first wednesday, and believe me, i scour for it for statistical purposes. sustainability is key for us as filmmakers in the coming months, and we have to do our best to make sure our films are promoted for as long as they hold relevance; even if that means finding the lingering relevance ourselves.
Look at Star Trek. That’s considered a hit, right? 75% of people who are going to see that movie saw it opening weekend in the 4000+ screens. 20% more in the second weekend. And then the rest will trickle in over the next four weeks until it’s pulled. Like you say, not a word about it since it opened. Word of mouth is out there, as far as I can tell. I’ve heard good things. But it’s over. It was “an event”, and now the event is over. All we’ll have is memories on DVD.
I waited two weeks to see State of Play and it was gone. I still can’t believe it. That movie never had a chance.
You’re right. Big Studio Movies are advertised as “events” (sometimes literally adding “the summer’s biggest event” to the marketing/promos) rather than discussions. i suppose it all depends on the films themselves though. i too missed State of Play, which is film that i hear warrants discussion, as does The Brothers Bloom. I’ve seen no TV Spots for either of those two movies. A trailer for State of Play in theaters, but nothing except internet marketing for The Brothers Bloom.
Hollywood is slowly becoming senile
It’s weird too, because when I go to the multiplex, there is room in the theaters for something different. Star Trek filled 4000 screens on the opening weekend, but it wasn’t filling theaters this week. There were plenty of other movies playing to mostly empty theaters. Some alternative programming could definitely bring some people in.