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The media machine has paid a lot of attention to a new movie studio that's trying to tap into the underserved niche of low budget films.

DF Indie Studios announced on Monday its plan to release 10-12 movies with budgets of $10 million or less, each year. One reason the company has gotten so much attention: DF Indie says it's well on its way to raising $100 million in equity, mostly from individual investors. And it claims it will de-lever the traditional movie-making model, by paying for productions with equity rather than relying on credit. DF Indie also says it has a plan to independently distribute its films without going through any of the big studios or players like Summit Entertainment.

I'm unclear what the other options are, but I'm curious to hear.

There's no doubt the independent and low-budget film world is in a period of flux and could use a new player. Over the past few years the major studios have shuttered or dramatically pulled back many of the specialty divisions that focus on lower-budget, independent-style films. Warner Bros [TWX Loading... () ] closed its Picturehouse division and Paramount [VIA Loading... () ] dramatically scaled back its Vantage division. Meanwhile financing from Wall Street has dried up and with many of the revenue streams, like DVDs, falling off a cliff, it's harder for independent players to put together ten million dollars to shoot a movie. Not to mention that with marketing costs through the roof, the chance of selling distribution rights to a movie studio has declined.

But there's no question that there's potential for low budget movies. Low cost films like Juno, distributed by Fox Searchlight [NWS Loading... () ], which hit big at the box office, are the holy grail for filmmakers. But at the same time finding a "Juno" or "Little Miss Sunshine" are, well, nearly as hard as finding the Holy Grail. There are thousands of independent films for every one that has a chance of being a "Juno." And while the box office is booming, do moviegoers want to see low budget films at the theater? Or do they go to the theater for over-the-top special effects and look to indie flicks to watch at home on DVD or Video-on-Demand?

This new venture dropped some hot buzzwords and piqued my interest. But DF Indie is still trying to raise money, which means in this economic environment it could be a while before all the finances are signed sealed and delivered. Remember, Steven Spielberg, who has the most remarkable track record of all time, has had to wait a long time to finalize his equity financing and it's still not finished. It makes sense that this kind of innovative venture would emerge now. But I wonder if the potential is less about trying to circumvent the monopolistic theatrical movie distribution system to get into theaters, and more about making the inexpensive films to reach consumers directly via Video-on-Demand, while the studios shell out the big bucks for theatrical blockbusters.

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