I recently went through the experience of selling my first low budget indie DIY thriller/sci-fi movie. I was lucky, I made a great deal for the world rights and actually got a solid advance, now the movie "Dark Reprieve", is available pretty much every where in the USA. Amazon, NetFlix, Hollywood Video, Blockbuster, Target, Best Buy, Barnes and Noble, FYE, iTunes, etc etc. In fact my movie has far better distribution in the USA than many other Canadian films costing 10s of millions!
I also made a great sale to Canadian pay TV that covered a substantial chunk of my budget. Since I made the sale myself 100% of the money went to me, that was great and a smart move.
I can tell you it was a tough tough slog, but it worked out very well in the end for me. I should also tell you that I shot on 35mm which made a huge difference when it came to competing against the mountain of DV shot films out there. Before you think 35mm is cost prohibitive, it wasn't for me. I acted as my own DOP and camera operator, plus I used all re-cans (1000' loads), and used a BL3 vs a swanky new 35mm system and only two lenses, a 24mm and an 85mm.
Dark Reprieve also opened the doors to other features for me, this week I have two features in pre-sales at Cannes with two different studios. And this time I am not self financing either one of them
Certainly it's a proud moment when you see the posters going out with your name in the directors spot. There is a lot of production work to come, but I enjoy it.
So my point is that even if your first DIY movie isn't a huge hit, it can really open doors to bigger projects. I would not be where I am with the other films had I not made Dark Reprieve.
Also, one huge huge thing affecting the prices of low budget indies these days is on-line piracy. I got a baptism by fire when my movie came out and it showed up on dozens of file sharing sites over night. I have found some sites where Dark Reprieve has been downloaded over 30,000 times!!
As a result of this the market has been totally killed for many DTV movies that lack a name talent in a lead role. Many foreign buyers at AFM for instance pass on 90% of the DTV product they see now because they know that as soon as they release it in their home territory it will be bootlegged, loaded onto the web, and they will lose a fortune in sales. It is a very serious problem and it has driven the prices for indie DTV movies right into the cellar. Any would be filmmaker needs to be aware of this.
The best path forward these days is to make a movie "good enough" for cable TV. They still need product and if the bootleggers steal the movie after it hits the air it's not a problem for you, you will still get paid as per the contract.
But most indie movies are in the DTV category and your checks will be based on the sales your movie makes in the DVD market. And these sales are going to be very small thanks to all the thieves out there breaking the law and stealing movies via the web.