"I believe that size, in some ways, is the enemy of creativity," said Peter Chernin, News Corp.'s president and chief operating officer, who launched the Fox Searchlight division more than 15 years ago. "The less money you risk, the more risks you can take. It gives you a chance to take more shots."

Fox Searchlight was formed in 1994, and its early returns were unremarkable. But in the company's third year, the division released the hit British comedy "The Full Monty" (written by "Slumdog Millionaire's" Oscar-winning screenwriter Simon Beaufoy). Peter Rice, a Fox production executive, took over Fox Searchlight in early 2000, and the company and its core team -- marketing head Nancy Utley and distribution chief Steve Gilula -- flourished.

"They were there when I needed them, and they left me alone when I was doing fine," said Alexander Payne, director and co-writer of the wine-tasting comedy "Sideways."

Unlike bigger movie studios, which produce almost all of their movies, Fox Searchlight and other so-called independent distributors often buy completed movies at film festivals. Fox Searchlight has enjoyed an incredible run with its festival acquisitions, buying the teen comedy "Napoleon Dynamite" for $3 million (it grossed $44.5 million) and the beauty pageant comedy "Little Miss Sunshine" for $10.5 million (it grossed nearly $60 million).

When the British producers of "Slumdog Millionaire" first shopped the movie to American distributors nearly two years ago, Fox Searchlight refused to pay the $5 million asking price.

When the film came Fox Searchlight's way once again, Rice bought distribution rights from Warner Bros. for $2.5 million.

Filmmakers (and the company's competitors) say Fox Searchlight's real gift is marketing and publicity, creating a system where the movie -- rather than flashy, pricey advertisements -- is allowed to sell itself. One common tactic: dozens of free screenings around the country, weeks before a film hits theaters.

"We were in a different city every night," said Valerie Faris, who co-directed "Little Miss Sunshine" with husband Jonathan Dayton. "It was all about building up anticipation."

Fox Searchlight's handling of "Slumdog Millionaire" has been especially skillful. Though the film features scenes of a brutal police interrogation, abject poverty and child abuse, Fox Searchlight has positioned it as a feel-good romance.

"At first, you hear that it's in Hindi and that it's violent," said Bob Berney, the former head of Picturehouse. "And then you start hearing from moviegoers, 'It's changed my life.' That's better than any advertisement."

At a time when a lot of dramas -- not to mention movies with subtitles -- have struggled at the box office, "Slumdog Millionaire" has grossed $98 million in domestic theaters, and with the Oscar wins could soon pass "Juno" (total gross: $143.5 million) as Fox Searchlight's highest-grossing film.

"Fox Searchlight has established its supremacy by identifying the soul of their films," said Jason Reitman, the director of "Juno" and "Thank You for Smoking," another Fox Searchlight hit. "No other studio has been able to match their ability to find the accessibility point of such tricky subjects as middle-aged wine tasters, beauty pageants, teenage pregnancy and now the slums of India."

john.horn@latimes.com

Times staff writer Chris Lee contributed to this article.