The most shocking moment of Sunday night's Oscar ceremony came early in the evening, long before Three 6 Mafia or Crash scored their twin victories for mediocrity. An hour or so after losing the night's first award to George Clooney, Jake Gyllenhaal trotted out on stage to ostensibly announce one of the night's many disposable montages. "They're called epics," he near-monotoned. "Extravaganzas. Spectacles." With that last one, Jake's voice took an unexpected up-turn. He went on to list a few (oddly amalgamated for mass cross-generational appeal) examples of the genre in question – "West Side Story. Star Wars. Ben-Hur." – before delivering the kicker: "You can't properly watch these on a television set, and good luck trying to enjoy them on a portable DVD." Gyllenhaal punctuated that embarrassingly over-scripted slice of Academy propaganda with a desperate, self-referential giggle – a composure break that lasted long enough for an insert shot of Heath Ledger and Michelle Williams, Gyllenhaal's Brokeback Mountain co-stars, just two members of what sounded like a large chunk of the audience laughing along with him. It was rather amazing, a pure, bumbling moment of transparency that neatly struck down whatever was left of Sid Gannis' sad house of cards. The new takeaway for the evening: If Hollywood can't take its own last-ditch propaganda seriously, how can we?

In fact, AMPAS built Sunday's broadcast around their own desperation, in a way that explicitly drew attention to the industry's complicity in their own failure. By containing the program in that god-awful theater-marquee set, the producers sent out the sadly unironic message: "All of the excitement before you can be had for the price of a movie ticket." Gyllenhaal's fumble made it painfully clear that even those charged with delivering that message don't personally subscribe to it. As Scott Kirsner wrote the next day on his blog, "My guess is that most people in the audience at the Kodak Theater last night don't see their movies in mediocre, poorly-maintained multiplexes." In fact, Crash's very victory is a testament that the most successful content is not that which is most compelling, but that which is made easiest for the consumer to see. As distasteful as many of us find Crash's victory over Brokeback Mountain, it was the easily predictable result of, amongst other things, the fact that oldish straight males (a demographic of which the Academy houses many) seemed unlikely to head out and see the gay cowboy movie when they could stay in and watch Paul Haggis' hack work on DVD.

The numbers, it seems, can't, won't and don't lie: even the people who make movies are more inclined to watch them at home. And it's because of this irrefutable truth that the number one issue currently facing the film industry is simultaneous distribution. Despite the bitter proclamations of a few auteurs and aesthetes, it seems clear that we're moving towards a new era, in which theatrical release functions as little more than a commercial for a variety of home options. I don't like it, myself – I personally find it next to impossible to really watch anything on my computer screen, and I only cringe when my friends tell me they're downloading films like Brokeback Mountain or The New World – but this is how the market works. Voices both within (Disney's Robert Iger) and without (Slate's Edward J. Epstein) Hollywood have spent the better part of the last year calling for the theatrical-to-DVD distribution window, currently at a record-tight average of 90 days from opening night to Netflix queue, to fully close. The question is, which company is going to break out with the distribution model that truly makes the most of the closed window?

Until recently, the only real players in the game were Todd Wagner and Mark Cuban (the latter, as you well know, invested in and blogs for the network of which Cinematical is a part). Through their 2929 Entertainment, a mini-empire that includes in its embrace production/distribution through Magnolia Pictures, a theatrical exhibition wing in Landmark Theaters, and count-'em two cable networks (HD Net and HD Movies), Cuban and Wagner pioneered what I guess we're now calling the day/date model:  simultaneous distribution of a previously un-released film on or around the same date, in theaters and through at least one channel meant for at-home consumption. After experiencing some success with the model last spring with the Sundance-launched, Oscar nominated Enron: The Smartest Guys in the Room, Cuban and Wagner signed a deal with the ever-quixotic Steven Soderbergh. The pact stipulated that Soderbergh would make six films, each shot on HD and budgeted at about $250,000, with the goal of feeding the maw of simultaneous release. So far, it has produced only Bubble, which has underperformed theatrically, despite the fact that it roused Roger Ebert out of his Crash coma long enough for the venerable critic to brand it a masterpiece. With five films left to go, it's unclear how or even if Soderbergh and friends plan to alter the game plan as they proceed. Not long before Bubble opened, Wagner told the New York Times that he wasn't sure if the day/date plan in place was going to work – an admission that gave fuel to the fallacy that there's a big gamble in play here. At a total cost of $1.5 million for the series, Soderbergh could release six volumes of dead tape, redirect the 2929 stipends towards the The Good German's liquor budget, and Cuban and Wagner still wouldn't find themselves running a remarkable loss.

Is it a coincidence that IFC timed news of their own day/date plan to hit the streets mere hours before Bubble's debut? Well, probably, yes, but the fact that the notion of simultaneous release was very much in the air that morning certainly didn't hurt their case. Jonathan Sehring and friends officially announced First Take just a little over a month ago, and they've already released two films: CSA: Confederate States of America, and the still-in-the-running candidate for Best Titled Film Ever, Sorry, Haters. Neither, it should be noted, has exactly set box offices aflame, but it also must be noted that neither was ostensibly trying all that hard. The whole point of the IFC plan is to use cable video on demand to give foreign gems and microindies – films that might have otherwise opened and closed in a couple of weeks on a handful of screens – a proper, nationwide release.

It certainly sounds like a worthy endeavor, but evidence is mounting that the IFC program is far from a perfect work. IFC has teamed up with Comcast, to offer each title in homes nationwide.  This brings us back to Mark Cuban: rumors are going around that Cuban is banning the First Take films from his Landmark Theaters, in retaliation at Comcast for refusing to carry the two HD Nets. (I’ve heard all kinds of confirmations and denials on this – if Mark is reading this, I'm sure he'll step in and say what's what). That squabble aside, we don’t have to look far ahead to see trouble on First Take’s horizon. The next major release on their schedule is I Am a Sex Addict, Caveh Zahedi’s autobiographical essay about how he quenched his previously unquenchable thirst for prostitutes. The film has been bouncing around the festival circuit for a year and, as you might have guessed from the title alone, it was not the most commercial property up for grabs in 2005. That IFC would snatch up the experimental, video-shot sort-of doc anyway, and pair it up with a distribution model for which it appears to be ideally suited, would seem to indicate some faith in there being an audience for its content.

So it would seem, but the filmmaker is starting to tell a slightly different story. As of about six days ago, Caveh has a blog, and on it he’s been sharing the unflinching details of his fight to protect his film from IFC’s commercial instincts. Here is the first entry, in its entirety:

When I negotiated the deal with IFC, I tried to include in the contract that I would have final say on all art work, but they wouldn't give it to me, arguing that, if they gave it to me, I could veto everything they did and prevent them from marketing the film in a timely and profit-maximizing manner. Moreover, they assured me that they prided themselves on being filmmaker-friendly and that they would do everything in their power to accommodate my preferences, short of committing marketing suicide. It sounded reasonable, so I agreed. But now, the nipples on the poster are going to be airbrushed so that media publications will print it. The nipples are the whole point of the poster. So much for transgression.

As Caveh proceeds to detail his daily struggles with IFC marketing VP Ryan Werner, over everything from the trailer to the budget for the local premiere (those nipples return a few more times, too), the question is begged: why is IFC bothering to build a trailblazing release strategy around edgy, idiosyncratic work, if they're not going to use the sharp edges inherent in the films to sell themselves? If they wanted something easier to market, why bother with a program like First Take at all?

The bottom line: Day-date isn't going to matter until someone comes along and raises the stakes. A major studio needs to step up and develop a pilot program that will close the window on something that a built-in audience is already committed to seeing. It's not as crazy an idea as it seems – in fact, I think it's going to happen this year, and the smart money has it happening at Disney. Robert Iger (who faces a board of shareholders tomorrow morning) is tapped into the zeitgeist in a way that we no longer think of studio executives being capable of. He's had the Wall Street Journal on speed dial ever since he took over for Michael Eisner last year, and the kind of language he uses to talk about the future is astounding. He knows a good chunk of the audience wants media on demand – he proved it by conquering the iTunes TV store – and he's simply not going to put up with artificial hurdles for much longer. It's not going to happen tomorrow, but watch for a major Disney/iTunes announcement in the weeks and months ahead.