Okay, so Netflix is, well, Netflix. They are not and were not a huge player in Independent film financing and distribution, but they tried to be. And now they're closing Red Envelope's doors.

I'm sure they'll still look at indie films for Netflix distribution, but it sounds like not near as much as they once did. The article below says they are shutting down the operation because they "didn't want to compete" with Hollywood studios (their customers). While I'm sure there is a slighty bit of truth to that statement, that is not the real reason. Let's be honest here. They weren't making their money back. That's it. And that's the problem with almost all independent film today. It's a great artistic outlet - I love watching indie film (and making them). But if you want to eat you can't survive making independent films. And not that Netflix wasn't surviving - they just weren't making money. That's my take anyway, and as usual I could be wrong. Decide for yourself...

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July 24, 2008 - By ANICK JESDANUN -- NEW YORK -- The movie-rental service Netflix Inc. is closing a small unit that finances independent movies, partly to avoid competing with Hollywood studios with which it partners for DVD and Internet distribution. The financial impact on the company will be small, and only four out of about 400 employees are losing their jobs.

But the move could make it more difficult for smaller producers to find homes for their movies. Netflix' Red Envelope Entertainment had focused on bringing less-commercial projects to a broader audience. The unit acquired or helped finance independent films, distributing them in movie theaters as well as in the regular Netflix channels -- DVD by mail and online streaming.

Netflix spokesman Steve Swasey said the company began the unit as an experiment about two years ago, but ultimately decided that financing movies was not its forte. He said filmmakers still have plenty of outlets for financing and distributing movies, "and we don't need to do that to get great titles on Netflix."

Swasey said the company weighed the fact that it was often in the same room with studio partners at film festivals, and "we didn't want to compete" with them.

Movies distributed through Red Envelope -- named for the red envelopes used to ship Netflix DVDs -- include "Sherrybaby," "No End in Sight," and "4 Months, 3 Weeks and 2Days." Red Envelope typically partnered with a larger company for theatrical release.

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-Blake

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