I had the chance to attend this year’s Tribeca Film Festival, where Innosight founder Clay Christensen keynoted the annual Disruptive Innovation Awards. The event fit right into the festival’s new ethos, which is about leveraging technology to solve some of the movie industry’s most urgent woes.

If you’re like most film fans these days, you’re already part of the problem. Audiences are watching more movies than ever before, yet Hollywood is watching its revenue shrink away.

Essentially, the big six studio empires are being disrupted by cheap technology and greater accessibility on three fronts at once: 1) in distribution, 2) in filmmaking itself, and 3) in marketing.

By examining all three disruptions, we can start to see how a new business model can emerge. And since new films are essentially new products, the lessons here apply to other industries as well.

Disruption #1: Distribution

The rise of digital streaming on phones, tablets and laptops has led to a dramatic drop in DVD revenue, the industry’s biggest cash cow. At the same time, hi-def TVs connected to the Internet are prompting more and more people to shun theaters, setting box office ticket sales on a gradual decline.

Clearly, high-tech disruptors are using new business models to capture value. Netflix does it with its low-priced, all-you-can eat subscription model. Apple does it by breaking even on content in order to spur sales of its high-margin hardware. Amazon has bundled online movie streaming into its annual Amazon Prime shipping service.

But while those companies are growing fast, the resulting content licensing fees have been modest for the studios, not nearly making up for the 30 percent revenue plunge in the home video market. “Digital streaming has created more piracy and more ways to watch for free online,” said Tom Lesinski, president of Paramount Digital, at a panel discussion.

The solution may come from the world of independent filmmaking. Tribeca’s chief creative officer Geoffrey Gilmore hinted in a small filmmaker workshop that he left the helm of running the Sundance Film Festival in 2009, in part, because he was frustrated with the pace of business model innovation there. After 19 years building Sundance, he yearned to experiment using a lower-risk platform. As America’s second most prestigious film festival, Tribeca is now that platform.

This year, Tribeca made movies available to home viewers during the festival, showcasing certain films on pay-cable for $6.99 each. (Sundance tried something similar this year, but at a $10.99 price point).

At the same time, an “online festival” featured a series of free screenings. Viewers had to sign up in advance to reserve one of only 500 “seats” per showing. (Sundance tried online film streaming under a different model as early as 2001 but largely scaled it back in recent years just as streaming has taken off.)

The time for a new indie-driven distribution model is right, Gilmore says, because there’s been “an expansion of taste,” evidenced by independently produced fare such as The Kids Are Alright and The King’s Speech going on to rack up major league grosses.

Disruption #2: Filmmaking

That brings us to the second disruption, in filmmaking technology. Quite simply, cheap hi-def cameras and digital editing tools have transformed the cost model.

This became a point of discussion at a 10th anniversary screening of quadruple Oscar winner A Beautiful Mind. I sat behind director Ron Howard, who hadn’t seen his film since its original release. The writing, acting and cinematography remain stunning and by the end, there’s wasn’t a dry eye in the house. But in the after-panel, uber-producer Brian Grazer said: “I wouldn’t be able to get this movie made in Hollywood today.”

A film like A Beautiful Mind, which cost about $60 million to make a decade ago, now can be done for $6 million. Yet Hollywood has too much overhead and too many contract obligations to produce movies in that cost range. So the big six studios have largely ceded the middle ground to independent producers. The big studios now only focus on broad spectacles that cost $80 million or more.

As a result, indie-produced films are moving up the value chain into the void. The problem with Hollywood, said Gilmore, is that major studios aren’t satisfied making a little profit. “They only want to make a lot of profit.” Protecting high-profit products while ignoring low profit ones is a hallmark of companies that end up being disrupted.

Disruption #3: Marketing

The third disruption is in marketing. “The way large films are marketed no longer makes sense,” said Paramount Digital’s Lesinski. A studio spending up to $50 million on saturation TV advertising belies “a significant lack of innovation.” After all, compelling trailers can whip around the web via Facebook, Twitter and YouTube for no cost at all.

The big idea, says Gilmore, is to build buzz around a virtual, distributed version of a screening event, leveraging what is already the #1 way to market indie movies: word of mouth among film buffs. With new social media tools, he says, the friends-telling-friends factor is more powerful than ever.

By harnessing all three disruptions, Tribeca is knitting together all the pieces to build what Innosight would call a disruptive value network. Enabled by new technology and forged by new business models, such networks deliver what customers want or need more easily at a fraction of the cost.

While all this is happening, Hollywood is fighting to maintain the oligopoly by using sustaining innovations such as 3-D in theaters. And to make up for the DVD drop, Sony, Universal, Fox and Warner Brothers have ignited an inter-industry war over a new model called “premium video on demand.”

Under the plan, the studios are working with DirecTV to test the notion of shrinking the theatrical window from four months to two months for certain films, beginning with a $30 home VOD price point for the widely panned Adam Sandler comedy Just Go With It.

But the theater chains are just not going with it. They’ve joined forces with a group of powerful film directors to oppose what they see as a threat, something that can kill the goose that lays the golden egg. After all, initial box office success is still needed to drive interest in digital and home viewing in the first place.

Tribeca’s Gilmore is highly skeptical of the new price point. “I don’t think people are going to pay $30 to watch an Adam Sandler movie that failed in the marketplace two months earlier.”

In other words, the industry’s new business model can’t be about exhibiting a few wide-release movies at higher prices, but rather about exhibiting lots of smaller movies at lower prices.

Thanks to digital technology, quality movies can now be made, distributed and marketed in new ways. What happened in music is now happening with movies. A similar transformation might be coming soon to an industry near you.

Innosight director of storytelling Evan I. Schwartz attended the Tribeca Film Festival as a Tribeca/Sloan Filmmaker winner, receiving a grant to help get his screenplay, TELEVISIONARIES, made as an independent feature.

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