A few days ago, Eugene Hernandez, at IndieWire, raised an interesting question about the struggles of independent film in an essay on “art vs commerce”. There has been a lot of noise about the commerce of independent film, hardly comparable to the hoopla of art and celebrity, but let’s suppose there seems to be more tension between “art” and “commerce” today versus yesterday. What do we make of that?

It seems to me that in the dualism of “art versus commerce” we diminish a vital, third column. The issue may not be “art versus commerce” so much as the triangle of “art – finance – commerce“.

From IndiePix’ point-of-view, we rely on the independent film community to determine what is art. The network of festivals and festival awards and industry events is a process that we believe expresses accurately the independent film community’s view of what is art and what is not. Independent films that are not particularly “art” — like “Super High Me” — may find an audience and even possibly generate money. That’s OK, good “commerce” perhaps. But the festival accredited, award winning films that the community identifies and recognizes through its distributed but reasonably formal festival process and awards events stand as the collective judgment of the best of independent film. And at least from IndiePix point of view, those films are welcome here.

[This is a side comment: with respect to the art of independent film, we have been reading "Hammer-to-Nail", the new-ish blog organized by Ted Hope, Corbin Day, and Michael Tully. Their subtitle is "ambitious film" and they reward ambitious film with thoughtful commentaries from a growing coterie of "collaborators" and "accomplices" (as they put it). Over at Spout, one of my favorite writers in the whole community, Karina Longworth, holds court behind her glasses and gives us the benefit of her well phrased, tightly presented, in depth insight into film.]

So what about commerce? Well, commerce is about buying and selling, so why don’t we come back to that in a bit. Let’s focus on the middle column: finance.

Our friend, Dan Cogan, over at the Fledgling Fund, has a very clear (if somewhat chilling) point of view about “finance” and independent film. There are three layers of finance, he points out: (1) sweat equity provided by deferrals and free labor by the filmmaker and his team; (2) philanthropy in the form of grants and family money, neither of which expects or is interested in being paid back; and (3) equity money which expects a return on its investment.

[We include advances on license fees in the philanthropic layer, since advances on license fees have a non-financial benefit to the grantor, namely the broadcast license for the title. We would include advances on distribution rights in the third layer since that is a money oriented investment that seeks a return in kind.]

If you are a filmmaker organizing your project, or if you are a third party trying to understand how a project has been put together, this is a useful paradigm. There are examples of films that are funded entirely by the filmmaker’s “sweat equity”. There are other films that make it to the festival circuit by combining sweat equity with philanthropy. There are very very few independent films, relative to the number of independent films made each year, that do not have sweat equity and that do not have philanthropy, and that are supported solely on the third layer of money — money that wants a money return. The new studio, DF Indie, wants to be a “layer 3 player”, and they will do 10 of perhaps 10 thousand a year!

Even the most celebrated independent film of recent memory, Slumdog Millionaire, had non-equity money at stake.

At IndiePix — and going back to the idea of the three “columns” of “art – finance – commerce” — we want to emphasize art as defined and ratified by the independent film community. We are comfortable with letting the community define that and supportive of their process of doing so. In our IndiePix Studios, we study the finance of film projects. We acknowledge the layer 1 (sweat equity) and layer 2 (philanthropy) contributions. We try to add value in layer 3 (equity) by helping organize a project so that it can return the capital and some benefit to those people who are participants in the money layer. And at IndiePix Fims, our distribution arm, we are focused on the commerce that contributes to Dan’s three-layer financing paradigm.

So this is not an “either-or” sort of thing. This is not a “versus” sort of thing. To me it’s more like one of those elegant, complicated time keeping machines of the early Renaissance that somehow kept things together and seemed to do the job.

Art in independent film is created by filmmakers who undertake complicated and costly projects. Whether the budget is micro or blockbuster, it’s more than writing a book or painting a painting. And its a social effort with the participation of many people in many different disciplines. Very few filmmakers will have a long term career, develop his or her craft, and create a body of work — in short, become a recognized artist — by continually depending on sweat equity. We think that the role of philanthropy (as discussed above) is important (and philanthropists are increasingly focused and specific about their non-financial objectives), but it’s not enough to make up the whole picture of finance. Thus the important role of commerce in the tick-tock heartbeat of this community.