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Occasionally, such festivals show major Hollywood films. In 2006,
The Da Vinci Code
was the opening-night presentation at the Cannes International Film Festival. Usually, however, the focus is on less mainstream cinema. Some festivals, like those in Cannes and Pusan, South Korea, include markets where such films can find distributors. The International Film Festival Rotterdam even helps finance films made in developing countries. Not all festivals award prizes, but the bigger ones that do—most notably Cannes, Venice, and Berlin—can draw attention to films that might otherwise get lost among the hundreds of movies circulating among festivals.

Festivals offer a distribution and exhibition outlet for films that might never be picked up for release beyond their country of origin. For example, during the mid 1980s, festival programmers were drawn to new and exciting work coming from Iran. Even without much exhibition in theaters, the films of Abbas Kiarostami, Mohsen Makhmalbaf, and their compatriots became major attractions at festivals. Their high profiles led to occasional films being given commercial distribution in Europe and North America. Although festival screenings didn’t make films profitable, the Iranian government sponsored such works as a way for the country and its culture to gain a higher profile internationally.

Passing from festival to festival becomes a mode of distribution for many films, which are sometimes promoted by the stars or directors in question-and-answer sessions. If a film fails to find a theatrical distributor, it may go straight to DVD and to screenings on specialized cable channels, such as the Sundance Channel and the Independent Film Channel in the United States.

Film festivals offer “theatrical” exhibition, since most of them show films in local theaters and sell tickets. At the two-week Palm Springs International Film Festival, for example, one nine-screen multiplex, a three-screen one, an auditorium in a local museum, and one in a community arts center all participate in the festival.

When a film leaves theatrical distribution, it lives on. Since the late 1970s, video has created a vast array of ancillary markets, and these typically return more money than the theatrical release. Distributors carefully plan the timing of their video release, putting the film first on airline flights and hotel television systems, then on pay-per-view TV, then on DVD release, and eventually on network broadcast, satellite and cable stations, and cable reruns. Video has proved a boon to smaller distributors, too. Foreign and independent films yield slim theatrical returns, but video markets can make these items profitable.

With only a fifth of Americans being regular moviegoers, television, in one form or another, has kept the theatrical market going. During the 1960s, the U.S. television networks began supporting Hollywood production by purchasing broadcast rights to the studios’ output. Lower-budget filmmakers depended on sales to European television and U.S. cable outlets. Television created an important nontheatrical market for films, one that film studios have exploited ever since.

When videocassette rentals became popular in the 1980s, studios were initially convinced that their business would suffer. It didn’t. During the 1990s, worldwide film attendance increased significantly. In 1997, when the DVD format was introduced, consumers embraced it eagerly. The disc was portable, took up less storage space than a VHS tape, and offered superior picture and sound quality. It could be played on tabletop players, portable players, game consoles, and computers. It encouraged families to install home theaters with big-screen TVs and multiple speakers. And it was widely available. In the United States, the Wal-Mart chain became the main purveyor of DVDs, accounting for over a third of all sales. Again, despite studio fears, even the arrival of the DVD failed to draw people away from theaters.

The major U.S. studios started their own home entertainment divisions to sell DVDs. Because the discs cost less than VHS tapes to create, the studios reaped huge rewards. In 2007, the major U.S. studios earned about $9.6 billion worldwide in theaters, whereas home video sales and rentals yielded $24 billion. Most of the video income came from DVD sales, which yield much higher profits to studios than rentals do.

Today the DVD market sustains most of the world’s theatrical filmmaking. Yet movie theaters remain central to the exhibition system. A theatrical screening focuses public interest. Critics review the film, television and the press publicize it, and people talk about it. The theatrical run is the film’s launching pad, usually determining how successful it will be in ancillary markets. Theatrical hits may account for as much as 80 percent of a video store’s or an Internet service’s rentals.

Even though the worldwide audience grew during the 1990s, most of the growth was in new markets. U.S. and European attendance showed signs of dwindling slowly. Commercial theaters were competing with home theaters, video games, and Internet entertainment. Since the early 2000s, exhibitors have worried especially about shrinking windows—the time between a film’s theatrical release and its release on DVD and other platforms. The concern is that if the DVD comes out too soon after the theatrical run, people will simply wait for the DVD. Some small distribution firms are experimenting with simultaneously releasing a film to theaters, on DVD, and on cable television, a practice that would eliminate the window that protects the exhibitors.

One lure that exhibitors are using to keep audiences loyal is building Imax screens in multiplexes and showing studio tentpole pictures in that immersive format.
The Polar Express, Chicken Little,
and other releases earned a large portion of their returns in Imax and in Imax 3-D. Entries in the Harry Potter and Batman series also play in both Imax and regular theaters. Higher ticket prices benefit exhibitor and film studio alike.

Apart from using the Internet to promote films, Hollywood sells DVDs through online merchants like
Amazon.com
. These offer a far wider choice of titles than a bricks-and-mortar store, and courier delivery reaches remote parts of the United States and other countries where such stores did not exist. DVD rentals could also be profitable if handled online through Netflix, which offers unlimited rentals for a subscription fee. The big rental chains like Blockbuster have established similar programs in addition to walk-in stores.

The next step for the studios has been to eliminate the cost of physical copies by selling movies as downloads or renting them as streaming video. As broadband access increases in capacity and more people acquire high-speed connections, films of any length can be made available online. Video on demand promises huge profits, and digital encryption can be used to prevent consumers from copying films. The distributors’ aim is to create a system depending less on buying or renting an object than on purchasing a service.

To further this goal, Netflix has expanded its service, added its “Watch Instantly” feature. As part of customers’ monthly fee, they gain access to streamingvideo copies of movies at near-DVD quality. Instead of the lengthy wait necessary in downloading a feature film to own, viewers can begin watching the video within a minute but are not able to save or burn a copy. Apple also has a service through its iTunes store, renting access to streaming video of films on PCs, Macs, iPhones, and iPods. Recent movies are available a month after their DVD release, with older titles available for a lower fee.

Despite the swift success of the format, DVDs caused distributors some worries as well. The discs were easy to copy and manufacture in bulk, so piracy took off worldwide. A bootleg DVD of a Hollywood movie could sell for as little as 80¢ in China. Moreover, with nearly 60,000 titles available at the end of 2005, shelf space was at a premium, so discount chains dumped slow-moving titles into bargain bins. DVD retail prices began to drop. The distributors hoped that a new format, the high-definition DVD, would block piracy and recharge the market, coaxing viewers into buying their favorite titles yet again. In the long run, they hoped, consumers would start to bypass packaged media. Far better to purchase films online and, using a convergence device such as XBox 360 or PlayStation, watch them on the family television monitor. But then the movie theater would be even more jeopardized.

Home video in all its varieties brings commercial films into the home. A major additional type of nontheatrical exhibition arises from movies made by amateurs and by aspiring filmmakers. Most of these are shared over the Internet on YouTube and other sites. Some filmmakers, however, want to show their work before a live audience.

To meet that desire, festivals of DIY films have arisen, including the DIY Film Festival, based in Los Angeles and traveling to other cities. Another started in 2001, when 10 small teams of filmmakers in Washington, DC, accepted a challenge to make a short film in 48 hours. All the completed shorts would be screened as a program immediately after the deadline. The result was the 48 Hours Film Project, which has offered similar challenges annually in an increasing number of cities, totaling over 70 by 2009. More informally, the Kino movement began in 1999 in Montréal with the slogan “Do well with nothing, do better with little, and do it right now!” The movement consists of local chapters in about 50 cities internationally. These typically meet once a month to screen their members’ latest films.

With the spread of small-format video capacity to cell phones and the availability of cheap post-production software, more people can shoot moving images with no training. Much of what they shoot remains raw footage. It may be shown to friends or family and then erased. Handheld personal music devices have added video screens, so that movies can be viewed on the go. Digital technology has made nontheatrical film viewing more casual and omnipresent than ever.

Grosses, synergy, ticket prices, and movies on video game consoles might seem very remote from issues of film as an art. Yet film is a technological medium usually aimed at a broad public, so the ways in which movies are circulated and shown can affect viewers’ experiences. Home video turns viewing into a small-group or individual activity, but seeing a film in a packed theater yields a different response. Comedies, most people feel, seem funnier in a theater, where infectious laughter can ripple through a crowd. Filmmakers are aware of this difference, and they try to pace comedies slowly enough that crowd laughter doesn’t drown out a key line.

Video distribution and exhibition have created new choices in the realm of storytelling. Until the 1980s, people couldn’t rewatch a movie whenever they wished. With videotape and, especially DVDs, viewers can pore over a film. Bonus materials encourage them to rerun the movie to spot things they missed. Some filmmakers have taken advantage of this opportunity by creating
puzzle films
like
Memento
and
Donnie Darko,
which fans scrutinize for clues to plot enigmas
(
1.42
,
1.43
).
Video versions can complicate the theatrical release version, as the extra ending of
The Butterfly Effect
does. Some interactive DVD movies permit the viewers to choose how the plot develops. The DVD of Greg Marks’s
11:14
allows you to enter parallel story lines at various points, in effect recasting the film’s overall form.