Even though Fox Searchlight co-presidents Steve Gilula and Nancy Utley have turned “challenging films” like Slumdog Millionaire, Black Swan, Crazy Heart, Once, Juno, and 127 Hours into awards-season successes, they are the lowest-profile indie moguls you will find. At a time when they are steering two Best Picture nominees — the Alexander Payne-directed The Descendants and the Terrence Malick-directed The Tree Of Life — they tell Deadline about the struggles, glory and disappointment that is part and parcel of the indie distributor’s mission of finding audiences for prestige films. When it works, it’s wondrous. Slumdog Millionaire, a $15 million film that was nearly relegated to a direct-to-video fate by Warner Bros, won eight Oscars including Best Picture, and grossed $141 million domestic and $378 million worldwide; Black Swan, a $13 million film that flatlined several times during the 10 years it took to get made, grossed $107 million domestic and $329 million worldwide and won Best Actress for Natalie Portman; Once, an obscure Irish film that cost $150,000 to make, won Best Song and grossed $9.4 million stateside and $20.7 million worldwide; Crazy Heart, a $9 million film about a drunk singer, won Best Actor for Jeff Bridges and grossed $39 million domestic and $47 million worldwide; the $7.5 million Juno won Best Screenplay for Diablo Cody, and grossed $143 million domestic and $231 million worldwide. Here, they lay out how it’s done and why voters should consider The Descendants and The Tree Of Life for Best Picture and other honors. 

DEADLINE: Fox Searchlight has eight nominations, with two Best Picture candidates. Make a case why Alexander Payne’s The Descendants is a worthy best picture winner.
UTLEY: The Descendants is a remarkably beautiful and accomplished film that is in the vein of Oscar movies from a little bit further back, like Kramer Vs. Kramer, Ordinary People, Terms Of Endearment, even On Golden Pond or To Kill A Mockingbird. It is in the sort of subtle character-based, humanistic, realistic story-telling tradition. Sometimes it’s a little frustrating because our movie isn’t flashy, it doesn’t have a lot of showy or bling kind of elements in it. It’s highly naturalistic. But I think those kind of movies are important to moviegoers because they reflect their lives and issues. This is a movie that is going to stand the test of time. People will be watching this movie in 10 years, 20 years, in 30 years. That’s an important part of what should be considered in Best Picture.
GILULA: It’s also a film that has really resonated all the way from the rarefied world of the film critics and journalists out to the mainstream: the public. The major studios are making almost none of those kinds of films anymore and it’s not easy for us either. But the fact is that the material is so good, and you have one of the very best directors and some of the best actors telling what on paper is a very simple story but achieves the highest level of the art.

DEADLINE: You don’t think of George Clooney losing the girl to another guy and having his wife cheat on him. What did he do to get outside his own comfort zone that made his performance Oscar-worthy? 
UTLEY: Despite his amazing good looks, charm and outward appearance, George still can represent an Everyman in the movies, in the way that Paul Newman, Jimmy Stewart, Jack Lemmon, Gregory Peck and Cary Grant did. The honesty of his work, the seriousness and the craft that he has developed over the years, puts him in this pantheon of the very finest of American actors.
GILULA: In spite of his extraordinary public and celebrity persona, the public has really embraced him as an actor’s actor.  He wasn’t afraid of challenging his own image.

DEADLINE: I saw Tree Of Life at Cannes and felt like I was immersed in a dream. Give me a sense as to how that film stacks up as a Best Picture candidate.
UTLEY: Tree Of Life has developed a group of very passionate advocates. This film is daring; it’s not a traditional three-act narrative. Not everyone appreciates the movie, but those who do are absolutely evangelical about it. I’ve talked to people who have seen it 10 times because the movie unfolds in a way that every time you watch it you find something different in it. Its originality and audacity rattles people and is getting attention and gaining fans.
GILULA: Being one of nine films nominated for Best Picture reflects the high priority the Academy places on originality of vision. And an incredible appreciation for Terry Malick, who after all these years, can still put a film together that challenges convention and is so original and moving. He’s not pandering and is unwilling to compromise his vision to fit within the conventional film expectations. It’s a tremendous source of pride for us to take on a film like this that is so challenging. It’s energizing for the art, craft, and business of movies that these films can be made.

DEADLINE: Tree of Life was going to be the big film from Apparition, until that upstart distributor imploded and financier Bill Pohlad placed it with you. When you first saw it, did you recognize the potential for the Palme d’Or and Oscar nominations? 
UTLEY: We saw the movie and thought, if someone is offering a chance to have a hand in getting this movie out there, we just have to do it. This is what we do. We work with artists, we work with visionaries. We view awards as gravy. We try to figure out what we are going to do in the marketplace, how we’re going to generate some box office. Because the awards business is so unpredictable both with jury prizes such as at Cannes and in other voting bodies, it’s almost impossible to predict success or failure in that. It isn’t really part of our thought process to say, let’s try to get the rights to this, I think it’s going to win the Palme D’Or or get Oscar nominations. That’s secondary.
GILULA: Focusing on possible awards when we are deciding to take on a movie like this is a fool’s errand because we have no idea what the competitive environment is going to be.

DEADLINE: The Artist has been a steamroller in the Best Picture race to this point. Is there anything you can do to better your chances for The Descendants this late in the game?
UTLEY: Sometimes it’s good to be the underdog! Because people take another look and think, “Boy, I loved that film, I need to support that one.” There is no exact science or magic of how to do it. We’re just trying to keep our film visible and remind them what they loved about it.
GILULA: I think that in this contest, popular success does have a strong correlation.  We are going into our  13thweek, and have expanded again. To be at our widest point in our 13th week is incredible [the film has grossed $66.8 million domestic, $111.8 million worldwide going into the weekend]. From a competitive point of view we passed Hugo, so we’re No. 4 among the nine movies in terms of box office success. There’s a very strong possibility we will also pass War Horse and Moneyball. So the visibility of this film and the public acclaim positions it very strongly in tortoise and the hare manner.

DEADLINE: The idea of a black-and-white silent film competing for Oscars is preposterous on its face. I’ve asked a lot of indie distributors and most said while they admired The Artist they would not have taken it on. What about you guys?
GILULA: When we saw it in Cannes, Nancy said “Wow, that would be challenging but I’d love to work on it.” I don’t know who those other distributors are, but that was her comment when the lights went on. The Artist is a great accomplishment. Every year there’s an interesting collection of movies and some have these really unusual stories. We had one three years ago with Slumdog, a film that wasn’t even going to be released. Those unusual back stories can help. It gives you guys something to write about. The Artist has a great story behind it, the unlikeliness of a black-and-white film coming out in 2011. But we’re working hard to make sure that story doesn’t overshadow our films, which just have outstanding work on every level, and are likely to be talked about and looked at in 50 years. The originality of The Descendants really shines through, when you really step back and realize what was accomplished. We’re not really interested in taking shots at other movies, but this is great American storytelling.

DEADLINE: One unexpected award-season turn was Michael Fassbender not getting a Best Actor nomination for Shame. How much of your release strategy hinged on Oscar nomination love?
UTLEY: We released it to an art house audience intensely interested in seeing it, the small group of cinephiles who were following the festival news and the incredible press it got. We scooped up that money early on, and then the idea was, can we cross this over to a broader audience by getting some awards recognition? It’s very disappointing that didn’t happen. We did think that certainly Michael Fassbender, but also Carey Mulligan’s beautiful performance and this incredibly talented director Steve McQueen would have garnered more recognition. Despite our best efforts, the NC-17 rating probably put some voters off to the extent that they didn’t even watch the screener or see it in theaters. Because if you saw it, you would vote for it. Maybe we were a little too optimistic about people being able to overlook the rating, pop in that screener and give it a shot. We never bat 1000 but it’s up to us to take risks and swing for the fences. Sometimes, it works.

DEADLINE: You acquired Shame at Toronto, agreeing not to cut a frame and knowing it would be NC-17. That creates problems for DVD, VOD and TV unless you can cut an R version. Will the film pay off financially for Searchlight?
GILULA: I think it will be on the margins. We don’t have a specific plan to cut the film and that will limit its DVD distribution. But it’s holding in there quite nicely; we passed $3 million in limited release. The film is still playing in a crowded market, in spite of not getting a nomination. I think we will have a satisfactory result, but Nancy’s right. If we had gotten nominations, it would have gotten to a broader audience. But we are proud of this film and what we do in the after markets has not been fully fleshed out yet. It will go to HBO and  travel through all the channels. I think there are some retailers that won’t put and X rated, excuse me, an NC-17  rated version up there, but we haven’t spent any time thinking about a cut version. Steve made an incredible film and everything is a piece of it. To chop it up?
UTLEY: It’s kinda baked in, ya know? This may not go down in history as one of our best business decisions but I’m still glad we took the risk. We tried to make it work the best we could.

DEADLINE: You just came back from Park City with two high profile Sundance acquisitions in The Surrogate and the Grand Jury Prize winning Beasts Of The Southern Wild. I heard you paid $6 million for worldwide rights for The Surrogate, a film about a sex surrogate helping a polio-stricken man lose his virginity. That might be the most challenging premise since 127 Hours, no matter how strong the performances by Helen Hunt, John Hawkes and William H. Macy. What is so special that you made it the big sale of Sundance?
UTLEY: You go to movies to feel something, and one reason to go to a movie theater rather than wait for an online download or a DVD is to be part of a community experience. The times we’ve seen this movie play, the audience is laughing together, crying together, they’re going through a roller coaster of emotions, together. It is cathartic and incredibly moving.  It’s very well made with extraordinary performances. If the Searchlight group feels unanimously as a group, we feel other people will feel the same way. We were so involved with these characters and this movie. It might be limited because of the subject matter, but this is the type of film where a breakout scenario could happen. We wanted to be the ones to try and make it happen.

DEADLINE: You mentioned VOD and ancillaries. Many Sundance films will be released day and date in theaters and on VOD, with DVD coming soon after. Where does that fit into Searchlight’s strategy now or in the future?
GILULA: We look at it a lot. But you’ll notice, none of the major studios–and we’re part of 20th Century Fox–are doing VOD because of established relationships we have with the major circuits and with our cable deals.  We see this evolving into a growing opportunity, but right now it’s mostly being done by independents like Magnolia and Roadside. It’s going to be a very valuable and growing distribution mode for a lot of independent films and over time, probably sooner rather than later, we and the other major studio divisions will find a way with all our other partners to accommodate it. It’s very important. Margin Call showed that with the right kind of movie, you can reach a broader audience spending a little less money. That is a great innovation. I view it positively, even though we are not in a position right now to jump into that.
UTLEY: We have been though many of these cycles, and have seen times when filmmakers walk away with absolutely no future for their films. A lot of these films can now be acquired to go on VOD. It’s not our business at this time, but it gives filmmakers a chance for their work to be seen.

DEADLINE: At 2011 Sundance, you made pricey buys of Martha Marcy, May Marlene, The Art Of Getting By and Another Earth. They were festival favorites but none broke out at the box office. Distributors always tell me that Sundance deals have to be measured not only by box office, but in growing relationships with new talent. What was the upshot of 2011 Sundance for you?
GILULA: New talent and emerging voices have always been part of what we do. Searchlight’s first film was Ed Burns’ first movie, The Brothers McMullen, and we’ve done repeat business with Danny Boyle, Alexander Payne, Darren Aronofsky and Jason Reitman. We had Catherine Hardwicke’s first film, Thirteen, and many other first-time directors. You always hope you can grow with them. I don’t have a conclusion for you that works into a sound-bite about last year.  Not only ours, but there were some great movies that came out of Sundance last year. Take Shelter and Like Crazy. Bringing these kinds of films out in a bigger way is harder than ever and that’s a challenge the whole industry faces. It was different if you go back several years. One of our other first time filmmaker experiences was Once. It’s one of our proudest achievements. That movie did three times what any of those [2011 Sundance] films did. Those are questions about the marketplace and how much more difficult it is to launch new films with new talent that don’t have recognizable names. We’re very proud of the movies we bought last year, and no regrets. They will all be modest financial successes because of the way that we acquired and released them. But clearly, we were disappointed. We wanted to reach much bigger audiences and have more people to see the work of Mike Cahill, Brit Marling and Sean Durkin. That is our mission. But you know it is a very very daunting environment in entertainment. People have lots of choices. It is dispiriting to realize we’re competing with reality shows on coupon clipping and hoarding. But people are watching a lot of stuff on cable, and not going out to the movies.  Marginal stuff on Youtube gets millions of hits. The bar is higher on what it takes to get people out to the movies.

DEADLINE: You have been at the center of grand Oscar moments, from Natalie Portman winning for Black Swan to Slumdog Millionaire winning Best Picture. What is the highlight? 
UTLEY: The relief and joy of knowing that you’ve accomplished a goal that’s really difficult, and the sense that you’re in a situation where you helped change people’s lives. They win an Oscar, and different doors open for them. You’re standing there with someone in a moment where their life is changing forever, and when they’re always going to be known as Academy Award winner or nominee. There’s intense gratification to that.
GILULA:  When I step back and pause, there are a few moments that remind me the path we’ve been on is mind blowing. The smaller moments are sources of minimalist pride, like when we won Best Song for Once, or when Jeff Bridges won best actor for Crazy Heart. Like Slumdog, that was a film that might not have been released. And then Slumdog, and Black Swan. There’s no singular moment. We’ve been incredibly privileged to have the opportunity to work with some of the very best filmmakers and most talented performers. But you can’t go into every movie thinking you’ll have Juno or Slumdog Millionaire. You would drive yourself crazy. We are incredibly proud of 127 Hours last year; Danny Boyle made the un-makeable movie. James Franco gave an extraordinary performance, but our challenge was, how are you going to get people to see a movie about a guy cutting his arm off? It’s a proud part of our library, a piece of film making and performance that will live forever. We get involved with all kinds of movies and support film makers with a difficult vision. When it works it becomes Black Swan or Slumdog, or smaller successes like these other movies. We have this shared vision that comes out of a lot of noisy, loud voices. We don’t always agree on everything, but it’s a collaborative group that comes together to really maximize the potential of these movies.