With the recession derailing the bank finance model and with it the vast majority of film funding, filmmakers now have to adapt quickly to get their films made. Some are taking on more commercial projects for corporate clients, whilst others are innovating, using the latest social media tools to bypass the traditional funding mechanisms.

A PricewaterhouseCoopers report shows that over 50 independent UK film companies went bust in the last 18 months, with Tartan, Palm Tree UK and Grass Roots Films amongst the fallen. To make matters worse, the demise of Woolworths and Zavvi last year saw the UK lose a chunk of the DVD market that many independent films rely on. This created a massive gap in the DVD retail market, with a significant portion of walk-in purchases disappearing; evidence suggests the void has not necessarily been filled by online retailers either – according to the British Video Association, DVD sales suffered a year-on-year drop of 9.5%.

Meanwhile, the UK Film Council, seen by many as the backbone of the industry, received a third more funding applications than last year. Producer Leo Pearlman, the man behind football documentary In The Hands Of The Gods, claims that the organisation chooses to fund safe ‘banker’ projects with established directors on board rather than back new talent.

“In the last 2 years, Jane Campion and Shane Meadows have received large portions of that cash,” Pearlman tells me. “Now they are both exceptional directors, but they are clearly not new directors. The UK Film Council’s remit is to build up UK independent film, and somewhere along the lines they have completely lost sight of that.”

A spokesperson for the UK Film Council, Tara Milne, disagrees: “We have supported today’s established filmmakers since their early careers, and we also fund new filmmakers, like James Marsh, Noel Clarke, James Watkins, who go on to achieve national and international success.”

Nevertheless, the increased competition means that some filmmakers have instead turned to commercial interests for funding. After Shane Meadows persuaded Eurostar to finance Somers Town with the help of the advertising agency Mother, others have been trying to follow suit. Environmental documentary The Vanishing Of The Beesstruck a sponsorship deal with the Co-operative Group and their film distribution partner Dogwoof which saved the filmmakers nearly £30,000 in marketing costs in exchange for a bit of brand identification. There is a risk however, that such commercial partnerships can cause people to view these films as advertorial. The film came under fire from a review in The Sunday Times that said that it was ‘let down by… a blatant plug for its co-sponsor, the Co-Op.’

Executive Producer James Erskine says that Co-Op had no say over any editorial matters.

“I personally welcome that kind of funding, there just needs to be an open and clearly defined set of rules. The only obligation of the filmmaker is to get their film made with as much integrity as possible.”

Pearlman’s studio, Fulwell 73, plans to wait out the recession by diversifying, taking on TV work, music videos, corporate films, and doing “whatever we can do to survive”.

“At the moment, if you are only going to make feature films, then you’re going to spend a lot of time making very little money,” says Pearlman. Approaching companies for funding or taking on commercial work are two ways for a studio to cope with a recession, but for there are more options open to today’s guerrilla filmmaker than ever before.

Filmmakers often now go online for a digital whip-round, also known as ‘crowdfunding’. Hinging on a process known as ‘Do-It-With-Others’ (DIWO), the website IndieGoGo acts as a resource market, where visitors can watch a pitch trailer for films in varying states of production, share clips with friends (thereby creating a buzz), ‘demand’ screenings in their area and even contribute to a film’s release costs. Filmmakers can set various tariff schemes for their donations – Terence Nance, writer, director and producer of How Do You Feel,uses the site to serenade viewers with a quirkily cut pitch-song asking for £5,000 to finish the animation on his film. By way of enticement, Nance offers contributors a copy of the film, a ‘special thanks’ credit and “a free one night stay at my home” as well as an avocado omelette.

So far the stand-out IndieGoGo success story has been the documentary Tapestries of Hope, which raised US $25,000 through the site to expose the shocking child abuse problem in Zimbabwe, where young girls are raped because of a mythological belief that virgins can cure Aids and HIV. Another film, The Lilliput, a feature based on the true story a Jewish dwarf who hid in garbage bins during the Holocaust, raised $10,000.

For Nance, the donations would enable him to finish his film’s animation and build an online databank where users can contribute via text, video, pictures or sounds, effectively crowdsourcing the content for a mixed media film which would be ‘free, viral in nature, created by the public, infinitely re-mixable, and constantly growing online’. Using social media in such a way allows a project to grow organically, if popular, from a trailer into a short film, and from a short film into a feature or a series.

For DIY filmmakers averse to the idea of relying on random people and online serendipity, there is a worry that creative control may be lost. And an example of the difficulties of crowdsourcing film is theA Swarm Of Angels project, which after nearly four years of development is currently on hiatus. However, Slava Rubin, co-founder of IndieGoGo, claims that DIWO is merely a means of bypassing the ‘permission culture’ that acts as a stumbling block for many filmmakers.

“DIWO isn’t about giving up the integrity of the film,” he tells me. “Its about getting organisations, brands, partners to be a part of the process as opposed to leading the project.”

Some directors are using social media in a manner that is beginning to transcend the idea of the film as an end product, instead using a multi-platform approach to send audience members down a rabbit hole into an alternate reality that can exist totally independent of the cinema screen.

“We were bound by distribution format; now people engage with media in so many different ways and places, there is a possibility of a film not being bound by 90 minutes,” says Liz Rosenthal, director of cross-media think-tank Power To The Pixel.

Rosenthal highlights Lance Weiler (listed by BusinessWeek as one of ’18 People Who Changed Hollywood’) as the perfect example of the potential power of cross-media. Weiler accompanied his feature, Head Trauma, with four quite terrifying but compelling ‘webisodes’ riddled with clues, ciphers, film clips, sound effects and subliminal messages. The results are enchanting – each webisode looks like some sort of holo-slide from a Philip K. Dick novel, a living, breathing, talking comic book. Fans wanting to take it further can participate in an Alternate Reality Game (ARG) called Hope Is Missing and 2.5 million people are already involved.

“It got people searching all around web looking for clues of where they need to look next – more people participated than actually saw the film,” says Rosenthal. “You could say that that story was just as important, if not more than the 90 minute feature.”

The key to the success of Head Trauma and Hope Is Missing was using social media tools to ‘micro-target’, or tap into, pre-existing audiences and generate a word-of-mouth following, rather than just hoping people will watch it when comes out. Rubin says that tools such as IndieGoGo allow independent filmmakers be more proactive in their promotion: “Hollywood has done a great job in really building up the audience in advance, but the indie world has always been a little bit behind that process. If you wait until you’re actually releasing your movie to start marketing it, its way too late.”

Grassroots promotion can be spectacularly successful. Timo Vuorensola, director of Finnish sci-fi comedy, Star Wreck: In the Pirkinning, used a pool of 3000 online fans (who had previously helped with parts of the film’s production – including its special effects) to publicise the film online for free, resulting in Star Wreck being downloaded 8 million times and picked up for DVD distribution by Universal.

The big studios are keen to learn from these viral campaigns. Having the cash to really push the boat out, Hollywood studio Warner Bros created an alternate reality game (ARG) for The Dark Knight of truly epic proportions; 10 million people in 75 countries played an intricate online game that utilised every possible medium available, with spoof websites, phone calls from actors and a fully-functioning Gotham Times fictional newspaper. Creating a seemingly bottomless world for fans to indulge in, The Dark Knight ARG won a Web Award for Games at the 2009 SXSW Festival and generated huge interest in advance of the film’s release.

Similarly, Paramount created a buzz around low-budget horror Paranormal Activity by releasing it in a small number of college towns, and then encouraging others to demand it come to their city; in so doing, they created an illusion of scarce distribution to generate online word-of-mouth. 2012‘s unfortunate viral campaign terrified Americans into thinking the world was really ending, but the infamy arguably helped the film out.

Although those at the top and the bottom of the industry seem open to innovation, many in the middle are still sceptical of the role social media has to play.

“I could be wrong but every year there is some film that you hear about that did it all through Facebook or Twitter or God knows what, but those are the exceptions to the rule,” says Leo Pearlman. “I don’t know anyone who is actually using them as the basis for a successful film production business.”

James Erskine also expressed doubt: “The question of how you get your film to a viable commercial audience have been struggled over by movie studios for over 100 years. I don’t think the internet is going to revolutionise that. I think it will allow communities to respond to a specific interest and reach a specific audience that you wouldn’t have been able to reach conventionally, for cheaper, but I don’t think it will really have a massive impact on the mainstream.”

The evidence suggests otherwise. As well as the big studios, more established parts of the independent industry have begun to take notice of social media. IndieGoGo recently formed a partnership with the San Francisco Film Society in a unique deal which allows filmmakers to use the crowdfunding tools of IndieGoGo, whilst receiving access to the fiscal sponsorship scheme of the SFFS, which means their contributors now get tax reductions on their donations. Rubin says: “We really are bringing the best of the old and new worlds together. Nowhere else can you combine those two things.” He adds that any studio trying to save money is missing a trick by not embracing social media: “Reaching a million people with social media is going to be much cheaper than with billboards.”

With the traditional barriers removed, some people (such as Erskine) worry that the sheer volume of content will become white noise, drowning out potential classics and fragmenting film-going audiences. Rubin, however is unconvinced by the theory.

“Its just a matter of having the right discovery tools to find what you need,” he says. “The best content will still get to the top.”

With social media crowdsourcing opinion, we might actually see a higher number of quality films becoming successful, rather than those selected by studios. Determined and talented filmmakers now have the tools to get films made, with or without government or commercial funding.

Although necessity is often cited as the mother of invention, it is important to stress that the rise of these innovations was not triggered by the recession. “Niche marketing is easier with social networking sites, niche content is now more acceptable, peer to peer funding is becoming much more acceptable thanks to the Obama campaign”, says Rubin. “Film was just next to evolve after journalism, photography and music.”

While those who ignore the advantages of social media risk being left behind, there is also a risk for those who attempt to use social marketing techniques in an insensitive manner: film production companies can have a much deeper, intelligent and far-reaching relationship with audiences, but the process is a dialogue and online audiences can respond aggressively to excessive plugging and poorly thought-out online initiatives.

The film-going public will see themselves become not just sedentary consumers, but creators, distributors, and even financiers. From bouncing ideas around on a forum to offering money, services and content to help make a film, to requesting screenings (e.g. using MovieMobz– a ‘cinema on demand’ service currently networking 200 digital independent screens across 26 cities in Brazil) or streaming a film directly to their laptop or iPhone (NetFlix, the US equivalent of LoveFilm, also allows users to stream to their computer or TV), people are going to experience cinema in a profoundly different way, although this does prompt a re-evaluation of the aesthetics of the cinema-going experience.

By removing a film from it’s normal format and environment, there is a risk that instead of being something we dedicate ourselves to for 90 minutes, it becomes an amorphous collection of experiences we have as we are going about our business, at the shops, in work, or at the pub, the thought of which will have cinephiles choking on their popcorn.