Making Money in the Movies

Given that thousands upon thousands of independent movies are made in the US alone every year, what will it take to convert them from mere hobbies to actual revenue-generating assets? To begin with, what do the studio made movies have that almost all independents don't? I can think of three:
1. Lack of Quality Product: This usually means a poor story and poor technical execution
2. Lack of Emotional Appeal: Aka big name stars and other talent. To a lesser degree it also means lack of money since major hype marketing can generate some amount of curiosity and appeal.
3. Lack of Access to Distribution Channels: This means revenue-generating channels movie theaters, shelf-space on Blockbuster, syndication through network and cable TV

Let's look at them in detail.

Issue #1 - Lack of Quality Product: This is probably the most easily fixed because it is an internal problem. However given the amount of trash that Hollywood itself generates, you have to understand that overcoming issue #1 is only a necessary condition for success of an independent film, not the only one. Remember that for example you probably paid to watch Date Movie only because it was shot on film stock, had talent of certain recognition and was actually available at a venue you are comfortable giving out money in exchange to watch movies - your local movie theater. So moving right along...
Solution:
Make the best product you can. Period. I know it's hard to define what "best product" is but some aspects to focus on are:
1) relevance of theme to current events and trends
2) innovation in story, art direction, narrative etc
3) have a great background score. If you are an Indian Indie, have some great songs in there.

Issue #2 -Lack of Emotional Appeal: What is a movie if not an emotional experience? And how best to convey to the potential viewer the value of your product than by having a powerful brand such as Robert DeNiro or Meryl Streep? Viewers know that such talents would not be associated with lesser quality material. So the movie must be good, right? Most often this is a right assumption. Given the lack of prior information, this is what helps bring in viewers and revenue. Of course, the lesser half of this is marketing and hype. This day and age affords us with many ways to advertise the movie but then if the garage filmmaker has seen a 100% increase in his ability to market his movie, the majors now have their marketing machine running at 1000%. So to truly stand out is hard.
Solution:
Use viral and internet marketing, festival entries, and personal relationships to create buzz within your local networks - tail-end market. With this in place, it's a matter of momentum to move into the big, fat hump of the buzz curve.

Issue #3 - Lack of Access to Distribution Channels: This last piece of the value chain, the Exhibition part, is an industry in turmoil what with tough competition for multiple ways to wach content - mobile phones, iPod, home theater, DVD players. Yet, so far the movie going experience especially for big blockbuster movies is best enjoyed in a big, dark box with a hundred other CO2 exhaling human beings. But access to the popular movie chains is, presumably, very restricted. Very few cinemas show non-Hollywood films - not unless they've been adopted by a Hollywood major and remarketed. So how do you get your movie to the masses within a traditional movie-going experience?
Solution:
Now I could be dead wrong about this but one way would be to identify or create your own screening venues. And use this as an ongoing enterprise geared toward showing quality independent work. I'm not going to expand on this too much for now since I am working through this issue currently with my short film. So more on this when I am done and bruised.

None of these solutions is independent. To truly create a market situation that challenges the vicelike grip of the oligarchy that is big movie business today - a thousand small revolutions need to happen.