More outlets for gay-oriented film fare lure producer. (Media & Technology).

Santa Monica independent producer and distributor Regent Entertainment is the latest entertainment company to create a division dedicated solely to gay and lesbian fare.

Regent has put up a modest $2.5 million to fund Here Films through a six-month incubation period -- a figure that doesn't include acquisitions. The company is looking for additional financing from a corporate sponsor such as an airline or a car company, Regent President Paul Colichman said.

"The gay market is huge now. It's probably the biggest untapped market in the country," said Colichman. "Having excelled in this niche, we felt it was time for us to utilize all our assets and do something that hasn't been done by a mainstream company."

"Gods and Monsters," a Lion's Gate production starring Ian McKellen, Brendan Fraser and Lynn Redgrave, was distributed by Regent and became its biggest gay-themed hit. The film, which garnered three Oscar nominations and took the 1999 Academy Award for best adapted screenplay, grossed just $6.4 million in domestic box office, but it cost less than half that to make.

More recently, Regent, which also owns two movie theaters, has distributed gay-themed titles such as "Sixth Happiness" "Speedway Junky" and "Sordid-Lives," which is the first movie on the Here Films slate.

The new label will produce and acquire first-run theatrical releases and television programs. In addition, it will operate domestic, international and DVD distribution arms. as well, as video-on-demand service offering a handful of gay-themed movies each month.

Regent's bread and butter remains its main-stream production and distribution business for television and video. The company maintains distribution relationships with buyers for all the major networks and was the largest independent producer of material for the Fox Family Channel prior to its purchase by Walt Disney Co.

But the gay marketing strategy follows Regent's overall model, Colichman said. That means defraying risk by budgeting low and targeting specific audiences with limited release schedules. "We are specialists in the under $3 million or under $4 million film," he said:

Out of the closet

The launch of Here Films follows closely on the heels of an announcement by Viacom Inc. companies MTV Networks and Showtime that they are collaborating on a gay-and-lesbian-themed cable channel. Another company, MDC Entertainment, recently announced that it is developing a similar channel.

Starting with "Ellen" and "The Real World" and continuing through NBC's popular "Will & Grace" and Showtime's "Queer as Folk," gay characters have been appearing with increasing frequency on the television landscape. Those network shows have gone a long way in, making advertisers more comfortable with programs that deal with gay issues.

"Businesses are waking up to a market that is not just about a social issue," said Lowell Selvin, president and chief executive of PlanetOut Partners Inc., a San Francisco company that operates a Web site dedicated to gay and lesbian news. "There are a number of Fortune 500 companies now that see the benefit of advertising (to the gay community) in real returns."

Studies show that between 5 percent and 10 percent of the American public identify themselves as gay or lesbian. Gays and lesbians earn about the same amount of money as other Americans, but disposable income in gay and lesbian households tends to be higher because few of those households include children, said Peter Nardi, a professor of sociology at Pitzer College and author of the book "Gay Men's Friendships."

Marketing to gays

But Nardi points out that "Will & Grace" and most major films that contain gay characters -- although welcomed by gays and lesbians -- are marketed mainly for a heterosexual audience, with many of the more sensitive aspects of gay and lesbian life omitted.

"You go to the (Laemmle Theatres) Sunset 5 where most of the gay films play and it's jammed, so the market already exists," Nardi said. "I don't think any of these movies are likely to be blockbusters. The reality is this is not a large segment of the population. But with modest budgets they can still get a good return."

Here Films will fill a void, Colichman asserts, by offering a diet of inexpensive content that is produced in large part by gays and lesbians specifically for a gay and lesbian audience.

"The gay market has always been there. The main reason we haven't seen this before is there is a lot of institutional hornophobia out there. It's changing, but some people are still freaked out about gay lifestyles," Colichman said. "People are finding a lot of financial reasons to leave their bigotry at the door."