IFCEntertainment announced that its low-budget Los Angeles-based production armNext Wave Films is to immediately cease operations as a separate divisionwithin the company.

The closureprompted a warning from outgoing Next Wave president Peter Broderick, who saidthere was a "crisis" in independent film distribution that wasstopping most independents from reaching their target audiences.

Since 1996, NextWave Films has produced 13 pictures, during which time it financed digitalfeatures, provided finishing funds to productions and acted as a launch-pad fora number of emerging film-makers.

Next Wave'sfilms include Following,the debut feature by Christopher Nolan, the British filmmaker who went to hitthe big time with both Memento and Insomnia, Jordan Melamed's Manic and Joe Carnahan's no-budget Blood, Guts, Bullets AndOctane. Carnahan's well-receivedfollow-up feature, the gritty police drama Narc, stars Ray Liotta and Jason Patrick andis scheduled for release through Paramount on December 20.

Announcing itsclosure, IFC Entertainment president Jonathan Sehring praised Next Wave'spioneering work. "The team at Next Wave did an admirable job indiscovering some real gems and helping launch the careers of several talentedfilmmakers. Unfortunately, the domestic and international marketplace for lowbudget independent films has changed dramatically in the past few years."

Sehring addedNext Wave's initiatives would be absorbed by other IFC divisions, notably IFCFilms and InDigEnt, the digital video film collective and self-styled answer toDenmark's Dogme95 movement whose slate includes the Sigourney Weaver starrer Tadpole, which was released last month throughMiramax and to date has grossed $1.1m.

"I startedthe company to launch the careers of exceptional film-makers and I feelfortunate to have had the chance to be involved with some terrific people atkey points in their careers," Broderick told Screen. "But there is a crisis indistribution for quality independent films. The success of Y Tu Mama Tambien and Memento belies the overall reality for mostindependent features in the marketplace. Things have gotten progressivelyworse. It's clear there is an audience out there for smart, interestingfeatures but these films have to make it through the first Friday and Saturdaynights."

Broderick addedthat the current studio dominance of the distribution and exhibition sectorsmade it increasingly hard for independents to establish a profile and saidfilm-makers needed to think about how to connect their movies to audiences. Oneway might be through internet buzz and sell-through on home entertainmentformats.

"If you canopen a movie in a couple of cities and get some reviews you have got some sortof legitimacy for the movie. You could get a situation where theatrical plays arole but isn't the engine that drives the whole thing," said Broderick yesterday.

Broderick has nofirm plans for the future but might continue to collaborate with IFC on variousprojects and pursue other avenues. "I am sure there are some very excitingventures ahead."