Indie Game‘s story began on the web, thanks to Kickstarter funding, and covers a topic near and dear to the Internet’s heart: the rise of the independent video game designer.

So while, according to co-director James Swirsky via email, the theatrical release and an earlier sold outscreening tour were profitable ways of building word-of-mouth about the film, making the film available online was extremely important to him and co-director Lisanne Pajot, as “that is where our audience is.”

“We wanted to get this film into the hands of those people who want to see it the most as quickly as reasonably possible,” he added. “Which is the main motivation behind the very tight release windows we’re working within.”

Indie Game‘s digital release will come through three platforms — one expected, two unconventional. The film, like many independent films before it, will be available on iTunes, but it’ll also be released by VHX as a direct DRM-free download — the second-ever project to be distributed by VHX, following their release of Aziz Ansari’s comedy special last April.

The story of how Indie Game ended up working with VHX couldn’t be more webby. Via the film’s extremely active Twitter account, the filmmakers mentioned they were looking for a distribution platform — instantly, Andy Baio (@waxpancake) connected the two:

Check the date stamp on that tweet — it’s less than two weeks ago. Only nine days after making contact, Indie Game‘s deal with VHX was solidified. “A new record for us, and a trend we hope will continue,” VHX co-founder Jamie Wilkinson said via email.

There’s no exact date yet on when the VHX for Artists platform will be officially open for all, according to co-founder Casey Pugh, but “it will be soon,” he promised.

In addition to iTunes and VHX, Indie Game will also be distributed through Steam, Valve’s video game distribution platform. That’s right, a gaming platform. According to Swirsky, with the exception of a zombie film created by Valve employees several years ago, Indie Game is the first film to ever receive major release through the popular service.

However, the decision to work with Steam made sense for Swirsky and Pajot, because of the film’s deep connections with the independent gaming community. “From a pure distribution standpoint, we can not get any closer to our core audience that being listed side by side with the games that are featured in the film,” Swirsky said. “If you like and bought Super Meat Boy, Braid, World of Goo, etc, there’s a good chance you might be interested in the backstory behind those games, and games like them. Steam brings us to the core of our most relevant audience in a very unique way. It’s kind of amazing.”

Across platforms, the cost will be $10, though those pre-ordering on Steam can purchase it for $8.99. According to Swirsky, “When it comes to sales and knowing their consumer base, Steam is second to none. They know their stuff. They know how to effective launch, maintain and promote the products within their system. When they suggested debuting with a pre-order pricing incentive, it made a lot of sense to us.”

To Swirsky and Pajot, each platform has its unique advantages. Steam, as previously mentioned, delivers the film to the most passionate portion of its fanbase. With iTunes, he says, it’s “a juggernaut. We always wanted this film to be there. They bring an audience and ease of purchase/viewing that we could only dream of with this film.”

And working with VHX, Swirsky says, “allows us to continue the direct conversation with our audience that we’ve been having since Day 1. It’s all on our site, it’s all under our control, it’s as personal as delivering the final film to the end audience as we can get digitally. VHX is doing some really exciting things. We’re really proud to be a part of it all.”

“It’s truly a great film. It also perfectly aligns with our beliefs on the future of film,” Pugh said. “Crowd-funded on Kickstarter and self-released on VHX. This is where the film, video and television business is going and it’s only the tip of the iceberg.”

Between the three platforms, Swirsky and Pajot are hopeful to not only make up the actual production budget of the film, but also compensate themselves for the two years they spent making the film. “The film is very much on track to make back its budget. But that’s a budget that doesn’t include paying ourselves for the past two years. If we go by that budget, we still have a little ways to go. But it should be worth it,” Swirsky said.

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Ansari released his comedy special on his website today, asking fans to pay $5 to instantly stream or download the one-hour show. The offering is powered by VHX, which has until now mostly been focused on social video discovery. Ansari’s special is kicking off VHX’s new artist program, which is meant to help artists to monetize their video assets in a direct-to-fan fashion. So far, things are off to a great start: Wilkinson and his co-founder Casey Pugh told me that they’ve been working non-stop to deal with the heavy demand for the special. “It’s much better than we ever imagined,” said Pugh.

Louis CK pioneered the idea of selling downloads of stand-up specials directly to fans in December, and cutting out gatekeepers like iTunes worked really well for him: CK’s special reportedly brought in more than $1 million within the first 12 days. Making downloads available without any DRM restrictions is key to this kind of approach, believes Wilkinson: “If you treat the consumer like a smart person… people really respond to that.”

Pugh told me that the new artist program is additive to what VHX has been offering in the video discovery space. But there is definitely potential for it to become something bigger: Artists could use eventually use Kickstarter to raise funds for production, and VHX to sell their wares to fans, the duo told me. Of course, others are looking at the space of crowd-funding as well, but they didn’t seem to worried about competition. Said Pugh: “Video is a pretty hard problem to solve.”

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Co-founded by online video pros Casey Pugh (whose past work includes Boxee, Vimeo and an Emmy) and Jamie Wilkinson (the co-creator of Know Your Meme and Mag.ma), VHX serves a two-fold purpose, offering a social dashboard of videos being shared by other users, as well as the opportunity for users browsing elsewhere to queue up videos for later viewing. The idea, according to Wilkinson told us in a phone interview, is to solve the problem of how people watch and share videos with friends.

VHX addresses the same concept that other startups have approached — that is, the idea that the best way to discover new content is not through an algorithm, but through social interaction. But a number of factors help it stand apart. One is its dramatic design, in which the video takes over the entire browser window for distraction-free viewing, with the dashboard and other features (including the ability to like, queue up and share videos across multiple social platforms), given a low profile. While not all videos are high-res enough to make this rewarding, a short film available in 720p or higher pops nicely.

Another distinction is its current user base, which is largely made up of high-level “power consumers” of online video — which is to say, the hip cool kids who always see hot new virals first. According to Wilkinson, VHX now has 5,000 users in private beta, most of whom are pretty active users of the site and represent many of that elite. Just some of those actively participating include Laughing Squid’s Scott Beale, video remix artists Wreck and Salvage and College Humor co-founder Jakob Lodwick.

“I’ll see it on VHX 24 or 48 hours before anywhere else,” Wilkinson said, describing the typical VHX stream as “a blend of the Boing Boing front page and Failblog front page. Your standard internet fare, with an extra dose of Vimeo.”

But the exact balance of content at this stage depends on which VHX users you follow, though users coming through the public beta will have the ability to pull in videos from their social streams, including Twitter, Tumblr and Facebook. In addition, Wilkinson and Pugh are working on the ability to import big blogs — like, say, Laughing Squid or Boing Boing — as viewable streams. “We’re really excited about adding playlist features and more powerful curation stuff,” Wilkinson said. Currently, VHX only works with YouTube and Vimeo videos; support for other players including Blip.tv, Dailymotion and Livestream is in progress.

VHX at this stage is self-funded, with one major contribution, according to Wilkinson, being the recent seven-figure sale of Know Your Meme to the Cheezburger Network, from which he and the other creators of KYM benefited from financially. Early conversations about seeking out a round of funding are also happening.

Monetization, though, comes from what Wilkinson referred to as the “three As” — apps, ads and accounts (specifically, pro accounts), with an emphasis on offering premium features over advertising. The upcoming iOS app, he says, will likely be a paid offering — in addition, a Boxee app for leanback viewing is also in development.

But even stuck inside the browser, VHX does stand out as a solution to the “I want to see something new” problem, especially when either your personal dashboard or the curated Discover section are allowed to play as a continuous stream. Letting VHX play for twenty minutes on random, for example, exposed me to strange animation, a Sesame Street clip, an A-plus cat video and some dazzling time-lapse cinematography — none of which I’d ever seen before. Which is the very definition of discovery.

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1. What’s the one big issue/law/attitude/restriction that you think is
holding back the industry?

Lack of faith in having people pay for your product. Companies rise and fall all the time because all they care about is getting as many users as possible and coming up with the business model later. What most fail to realize is that perhaps their product was never meant to be successful at a massive scale. I want companies to realize the market for their own product and know that those users will pay for it. Xmarks is shutting down next month, a bookmark synchronizing service that I use. They’ve been around for years and have grown very large, but didn’t really have a business plan before it was too late. I would have happily paid them.

I look up to a company like Metafilter [which is] successful with [its] small, paying user base. For them it might have been accidental in hindsight, but then there is 37signals, [which has] built leanness and efficiency into their company philosophy.

If you look at the online video industry, Vimeo is playing it smart and doing well with their Plus subscription accounts. Meanwhile, YouTube is putting ads everywhere possible in order to cover cost therefore ruining the actual experience of their own product.

Then if you just glance over at the gaming industry, you don’t see them offering their technology for free. It’s an understood fact that you pay for the products.

Obviously, a subscription model isn’t the answer to all companies in the industry. There are many ways to financial success. I’m just personally interested in seeing more successful and efficient startups.

2. What industry buzzword do you never want to hear again?

HTML5. Technically it’s not a buzzword, but a lot of people like to use it as one. I think I’m tired of all the HTML5 vs. Flash rants. Just choose the right one for the right situation. I could go on for a while, but I’ll stop there.

3. If someone gave you $50 million to invest in a company in this space, which one would it be? (Mentioning your own doesn’t count.)

Personally, I’m excited about making my life simpler via mobile platforms. I would probably split it between Venmo and Square. With Venmo, I absolutely love that I no longer have to run to the ATM to pay my friend back when I can just pay him or her via text message. Square has the ability to help out tons of struggling new local businesses and individuals, which is incredible.

Venmo has also created a new form of online friendship that I want to see implemented into other social sites. The fact I can officially trust a friend to withdraw directly from my account is very interesting (and scary). Imagine if the trust-connection was implemented into Yelp or Netflix. If I could trust my friends who I think have good taste in food or movies, those sites would now effectively have dramatically improved suggestions for myself. You would essentially develop subgroups of friends who have the same tastes as you.

Sorry, I’m off topic!

4. What was the last video (that you weren’t personally involved with) that you liked enough to spread to others?

All of Nathan Fielder’s videos are hilarious. His videos remind me of The Lonely Island guys back before they were famous. And turns out Nathan already has landed some success by becoming a writer for a show on Comedy Central.

5. WILD-CARD: Star Wars Uncut has proven to be a creative and technological success — but is there opportunity to take a project like this and make it financially viable beyond the LucasFilm copyright?

Definitely. If I went to LucasFilm first, Star Wars Uncut would have taken years to come into existence, if at all. Financial viability for Star Wars Uncut itself is iffy, but my idea has proven a point. Masses of people are excited about the project and even more for the film. Ted Hope said at the Vimeo Festival this past weekend that Star Wars Uncut is the best movie of 2010.

But its success is built upon a massive franchise, so in order to create a financially viable transmedia project, we would have to work with a film or TV studio from the beginning. The success hopefully has opened the eyes of the film and TV industry to show that their audiences are actually interested in consuming transmedia content almost as much as their own original content.

Thanks to the impending interactive set top boxes and video platforms (Boxee, Google TV, Apple TV, etc.) that are all debuting shortly, online video content and projects like Star Wars Uncut could actually start being monetized and consumed through the TV very easily.

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Jimmy Fallon may have a strut in his step when he hosts this year’s Emmy Awards: He’s already won his prize. At last night’s Creative Arts ceremony for the 2010 Emmys, the digital experience for Late Night with Jimmy Fallon won the award for Best Creative Achievement in Interactive Non-Fiction.

This is the second year in a row Late Night has won in this category. The award recognizes Fallon and producer Gavin Purcell’s efforts to bridge the gap between web and television via blogs, videos and other experiments in engaging audiences, which they began experimenting with even before the show premiered.

In the Interactive Fiction category, the recently completed Star Wars Uncut beat out Dexter‘s extended digital experience and the Glee Coinicident.TV player for the award. Created by Casey Pugh, Star Wars Uncut was the only independent web production nominated this year.

Neil Patrick Harris (Dr. Horrible now and forever) won for hosting the Tony Awards and his guest starring appearance on Glee.

And most importantly, Old Spice’s The Man Your Man Could Smell Like totally won for Best Commercial. Like that was even a question?

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Star Wars: Uncut Trailer from Casey Pugh on Vimeo.

Technically, the full-length Star Wars Uncut isn’t a fully edited together version — instead, Pugh programmed an embedded Vimeo player to automatically jump from one scene to the next (because many duplicate versions of scenes exist, it’s the top-rated ones which were selected for the assembly). To watch it, simply go to the Watch page and click the big Play button.

Star Wars Uncut has been compared to Our Footloose Remake, another unauthorized recreation of a beloved film by many, many filmmakers. The difference, though, is that with each creator taking on 15 seconds of the film each, as opposed to five minutes, even more diversity in the approaches is found.

Seriously, watching the full assembly gives you an incredible sense of the project’s scope. Machinima, live-action, Lego, Flash animation, Lady Gaga-inspired posing, action figures, stop motion, small children… All of these and more come together to make a surprisingly watchable version of George Lucas’s iconic film — an edited sample of which is embedded below.

Star Wars Uncut “The Escape” from Casey Pugh on Vimeo.

When I spoke with Pugh about the project last January, he said that LucasFilm were huge fans of the project, specifically because he “treated it like an art project.” Things are now potentially moving beyond the art project stage, though — according to the site, a fully edited version of the film has been completed, and “we are working through the legal issues in order to bring that to everyone as soon as possible.”

Star Wars Uncut‘s Emmy nomination for Creative Achievement in Interactive Fiction makes it the only independently-produced project to be recognized in either interactive category. Its reel, presented to Emmy voters, does a great job of showing off exactly why it deserved to be nominated.

SWU Reel – Emmy from Casey Pugh on Vimeo.

It’ll be interesting to see if a win this Saturday at the Creative Arts ceremony — or even the benefit of additional exposure — has any effect on the project’s legal fate.

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