New York, I Love You, the followup to last year's critically acclaimed Paris, je t'aime, was shot over 36 days using 40 actors, including 20 stars like Scarlett Johansson, Orlando Bloom, and Natalie Portman. It didn't have just one director but a whole roster of A-list names from around the world—some of whom don't even speak English.

"It was like coordinating a logistical monster," says Celine Rattray, one-third of indie powerhouse Plum Pictures, sitting in the company's offices on a rainy evening before the final day of shooting. "Such a domino effect—no one could be moved in the schedule. This will make regular movies seem easy."

For Plum Pictures, a "regular movie" is a high-quality film made for $2 million or less, a paltry sum at a time when the average Hollywood release takes more than $100 million to make and market. Plum's ability to make smart, appealing movies on the cheap has made it a force to be reckoned with. At the 2007 Sundance Film Festival, Harvey Weinstein, co-chairman of the Weinstein Company, stayed up negotiating until six in the morning for worldwide-distribution rights to the Plum-produced Grace Is Gone, taking it home for double the film's $2 million budget. At this year's Tribeca Film Festival, which ends May 4, Plum is premiering three films, Trucker, Bart Got A Room, and Life in Flight, each made for approximately $2 million.

Needless to say, it's not easy to make a good movie on a tiny budget. But advances in technology—film-editing software such as iMovie and Final Cut Pro and digital video cameras—have enabled the rise of more independent production companies like Plum. Still, cheap software does not a watchable movie make.

The first rule of producing a good film for less is to select a story that you, your actors, and your crew will be passionate enough about to work for low or deferred pay. (Sometimes that pay may be deferred for months or years.) The three women who run Plum went at least a year without paying themselves while working on the films Dedication and Grace Is Gone. "We have made many of our films without taking up-front fees, just back-end," says Rattray.

And it's all about the script. The tighter and more polished it is, the fewer changes will be needed—and the less money you waste shooting scenes that won't make it into the final cut. Even cutting four pages of a script can save around $50,000. "We become better at editing before shooting," says Daniela Taplin Lundberg, another partner at Plum. "When you're shooting a 25-day schedule, you have to hone your script down to the bare bones."

Arianna Bocco, vice president of acquisitions and production for IFC Films, an independent-film distribution and production company based in New York, says the best way to make a low-budget film is to focus on a character-driven narrative, versus grand situations and schemes and big location switches. The box-office hit and now cult classic Napoleon Dynamite, about a quirky high-school kid who takes on his school, required only $400,000 to make while I Am Legend, the apocalyptic thriller starring Will Smith, had a budget of $150 million. Similarly, the love story Once, which won an Oscar for best song, was made for $150,000. In contrast, last year's romantic hit Atonement saw the light of day for $30 million. The indie-movie Winter Passing, in which Will Ferrell played a dramatic part, had a budget of $3.5 million, but his next turn in a drama was the Columbia Pictures production Stranger Than Fiction, which was shot for $38 million.