As a counterpoint to the utopian bliss of the Sundance Filmmakers Lab, I’ll direct your attention a speech given by James D. Stern last week on the present and future of independent film.

In my post-mortem on The Nines, I wrote that the business model of selling your indie at Sundance for theatrical release was largely mythology. The numbers are stacked against you, and have only gotten worse.

According to Stern:

An astonishing 9,293 films were submitted to Sundance last year. Of those nearly 10,000, only 218 were screened. Of the lucky handful to get bought, so far only three have been released theatrically.

From January through May 2008 … the number of indies that grossed over $1 million dollars went from 16 to six. Less than half.

Fewer indies are making it to the big screen, and fewer of those movies are earning money. And video isn’t the savior it once was. DVD and TV deals are smaller, when you can even get them.

Stern acknowledges that changes in the distribution system — particularly the rise of streaming video — may help out in the next few years. Right now, Netflix is like an infinite video store, but once it becomes possible to monetize each viewing of a movie, there’s suddenly value to being one of its 10,000 movies.

Provided they actually pay us for our content in appropriate ways, these are the once and future friends of independent film.

But to his credit, Stern won’t let filmmakers themselves off the hook. In mythologizing the struggling writer/director auteur, we’ve created a genre of movies that are built to fail. Quoting Patrick Goldstein from the LA Times, Stern notes:

“The real problem with the indie business isn’t quality, but discipline. We have a generation of filmmakers who feel entitled to make personal films… and a generation of executives who’ve been willing to essentially use specialty films as a loss-leader to launch their division or win awards. If people in the indie world want to start making money again, they have to start treating their investment like a truly precious natural resource, not like Monopoly money. Discipline is not antithetical to art.”

That’s an idea I’ve been trying to reconcile while up here at the labs.

My friend Howard Rodman often says, “The point of studio development is to take a script only you could have written and turn it into something anyone could have written.” I’m keenly aware that our goal as writers and advisors is to make projects more unique and specific.

Yet the fact that we can say a script “feels like a Sundance movie” belies this intent. It’s shorthand for challenging, quirky, maddening and (if we’re being honest) non-commercial. We want these movies to exist. But we need to be honest about their prospects.

Stern argues that filmmakers need to keep their audience in mind from a project’s initial conception — even if that audience isn’t a typical mainstream audience.

I was blown away when I found out that the #32 film on the all-time documentary box-office list is a little 2005 film I’d never heard of, called “The Wild Parrots of Telegraph Hill.” (It’s about wild parrots living on Telegraph Hill, by the way.) Can you imagine how tiny the market sliver is of people willing to take a night out to go see this peculiar-sounding film?

Well, the filmmaker did imagine them. Rather thoughtfully, in fact. And then proceeded to use viral marketing to rally those people into the theater, by making the film an event for every bird-lover on God’s green Earth.

Audubon Society members. Bird-watching clubs. Breeders. Veterinarians. Humane Societies. Feather-fancier magazine subscribers. There are a lot of people out there who really love birds. And I think every last one of them went to this movie.

Every filmmaker would like her movie to break out of its niche and gain wider exposure and acceptance. But Stern’s point is apt: figure out your base, and develop a marketing plan that succeeds even if it never goes beyond that. If this sounds more like planning a small business than planning a movie, that’s sort of the point.

I wouldn’t make another indie the way I did The Nines. I’d figure out how I was going to make money before figuring out how to get money.

There is more to Stern’s speech, which is certainly worth a read.