1. That depends, are you only going to accept works that were originally acquired in the digital format? I’m obviously a big proponent of digital, but I don’t think the traditional “filmmaker” should be excluded. It is however up to them to convert their project from film to a digital format for online exhibition.
2. Winners should receive something that allows them to accelerate their filmmaking experience. With the assistance from sponsors, the festival might provide a nice camera, tripod, possibly some editing software, BOOKS; those would all be great prizes.
3. Fees vary from festival to festival. If you were to research festival entry fees, even those for students, you’d find that fees can start out as low as 10 dollars per entry and jump upwards to 50 dollars per entry, depending on the length and deadline extension costs etc.
4. A number of factors would define the “short” film set for an online festival. The length, file size, and format requirements all must coincide with how much space you have allocated for exhibiting the projected number of accepted entries. Could be 30 movies, could be 3,000? All them need to have something in common to be considered for the screening process, similar to what you have for submissions to the showcase. To determine the finalists online, voting could lead to some form of online gerrymandering, unless strict precautions were taken to prevent these types of opportunistic overthrows.