LOS ANGELES (Reuters) – It was a disappointing night for Hollywood's major studios.

It could have been the night when "Avatar," from News Corp's Twentieth Century Fox, turned its audience appeal and $2.5 billion in box office gold into a best picture Oscar win.

But instead, smaller films from independent houses stole the show from big-budget popcorn fare on Oscar night, with movies like "The Hurt Locker" muscling out James Cameron's "Avatar" for many of the industry's top honors on Sunday.

Summit Entertainment, which made its fortune with teen vampire franchise "The Twilight Saga", scored six wins including for best director and best picture.

Sony Pictures, a unit of Sony Corp, had led the nominations going into Oscar night with 18 nods. But it snagged its sole statuette with best foreign film "The Secret in Their Eyes" -- from its arthouse Sony Pictures Classics division.

Twentieth Century Fox and corporate sibling Fox Searchlight, which together received 14 nominations, fared better with five wins, including best actor for Jeff Bridges in "Crazy Heart," another award for an independent film from a smaller arthouse subsidiary of a major studio.

"Avatar" walked away with three Oscars, but in technical categories -- visual effects, cinematography and art direction.

In all, the major studios -- Sony, Fox, Time Warner Inc's Warner Bros, The Walt Disney Co's Disney, Viacom's Paramount and General Electric Co's Universal Pictures -- went home with 11 of the 24 Oscars up for grabs.

Bob Murawski, editor on "The Hurt Locker," summed up the outside-the-studio view, when he collected his Oscar.

"Thank you to the Academy for giving this award to a movie that was made without compromise," Murawski said.

"We didn't have any preview screenings or focus groups or studio notes," he said. "Everybody made the movie we wanted to make, and it turned out great."

BOX OFFICE BOOST

The Academy Awards have often rewarded independent films over popcorn fare, but this year's Oscar results come at a time when the always tough U.S. independent film business has become even more difficult due to competition from overseas and a lack of Wall Street funding in the wake of the credit crisis.

Studios large and small hope to translate wins into box office gold, or sell more DVDs, justifying multimillion-dollar Oscar campaigns. Some experts estimate that a single statuette can boost ticket returns by as much as a third, especially for smaller independent pictures.

Last year's best picture winner "Slumdog Millionaire," which was made independently but distributed by Fox and Warner Bros, made $98 million at U.S. and Canada box offices after its nomination, amounting to two-thirds of the total take.

Hollywood studios also rely on Oscar nominations to raise the prestige of their company, which helps them draw top talent for future projects. For an independent studio like Summit, its first nods -- nine for Iraq war film "The Hurt Locker" -- can bolster its credibility.

In past years, indie moguls Harvey and Bob Weinstein have been masters at turning Oscar glory into Hollywood success. This year, even as their Weinstein Co. faced financial troubles, they earned 13 nominations, mostly for "Inglourious Basterds."

That movie, which Universal helped release, ended with only one win, a best supporting actor Oscar for Christoph Waltz.

Disney was nominated in eight categories for animated films "Up" and "The Princess and the Frog" but the company was the eventual winner of just two, including best animated feature for "Up," which came from its Pixar division.

Lions Gate Entertainment Corp, better known for the "Saw" horror franchise and its acclaimed "Mad Men" TV series, took home two statuettes for the critically lauded "Precious: Based on the Novel 'Push' by Sapphire."

Dolphin slaughter film "The Cove," which Lions Gate distributed, also garnered an Oscar for best documentary.