On a frigid Sunday night at the end of the Sundance Film Festival's first weekend, a massive, mostly female crowd braved the cold to line up outside Park City High School, shuffling in place to keep toes from going numb. As those in the line slowly advanced into the school's Eccles Theater, the biggest and most prestigious venue at Sundance, they took tiny geisha steps through partially frozen slush, past dozens of desperate souls holding cardboard signs bearing beggar slogans like “Need tickets!!!”

You hear stories about how Sundance films of yore inspired a kind of popular mania on the ground in Park City, moving regular folks without industry ties to stand out in the freezing cold for hours, sometimes begging a stranger with an extra ticket to do them a kindness, sometimes offering top dollar for scalped tickets. The movies attached to such lore are usually out-of-nowhere phenoms, truly independent films that came to Sundance without distribution and left 10 days later primed to become pop-culture sensations: sex, lies and videotape, Clerks, The Blair Witch Project. The films pumped a vein that hadn't been tapped before, and the hype that swelled around them was about getting in on the ground floor of a discovery.

Flash forward to 2010, and the movie that's attracted the scalping scene outside Eccles is The Runaways, a stylish biopic of the all-teen girl band of the same name. Directed by music-video auteur Floria Sigismondi, the film has been the subject of blog gossip since preproduction, thanks to the “controversial” casting of the questionably punk-teen Twilight starlet Kristen Stewart as Joan Jett. Earlier that day, gossip blogs traded paparazzi photos of Stewart stepping out of her private jet in Park City. The mania outside this premiere could be about a number of things — Twilight fandom, '70s proto-punk fandom, curiosity sparked by the trailer's glimpse of maturing child star Dakota Fanning playing a drugged-out nymphet who stumbles around in Fredericks of Hollywood stripper-wear as outerwear — but it is not about the bragging rights of helping to discover something new. This Runaways scene would seem to be about as far away from Sundance's roots as you could get.

Yet, inside the theater, before the film begins, a kind of video installation broadcasting Sundance's theme for the year is projected onto the big screen. Slogans, fading up in a fuzzy spray of multicolored dot matrix–like digital graffiti, declare Sundance's mission to re-embrace its underground roots. “This is the renewed cinematic rebellion” fades down; “This is the recharged fight against the establishment of the unexpected” fades up. Visually, this feels like a nod to the artist Jenny Holzer, who uses LED displays and silent radio scrolls to insert manifesto fragments she calls “truisms” into public space. But what feels true in Holzer's work seems facile and phony in Park City. If you have to create a bombastic light show to broadcast your punk-rock credentials, how punk can you really be?

One thing becomes certain as the filmmakers take the stage to introduce the movie: Between the real Joan Jett's red sequined pants and Sigismondi's minidress and heels, the Runaways crew is certainly rebelling against the standard Sundance igloo casual dress code. Too bad their rebellion doesn't extend to the movie itself, which instead traffics in vintage sex, drugs and rock & roll cliché.

That's not entirely a bad thing: The Runaways was one of a half-dozen films at Sundance this year that offered the pure pleasures of a star-studded mainstream movie made for a mature audience. (Others included The Company Men and The Kids Are All Right, which sparked the year's sole old-fashioned bidding war.) Easy entertainment — this is cinematic rebellion?

In one way, it is: The Runaways is the kind of movie that Hollywood should be making but isn't; the kind of film that studio-supported indie labels like Miramax and New Line used to make, before most of those art-house divisions were shuttered. These days, a certain type of midrange star vehicle — low budget by Hollywood standards but exponentially glossier and more expensive to make than the average film-festival indie — is being made almost chiefly by independent production companies, and premiered at film festivals in the hopes that well-funded buyers will be attracted by critical acclaim and audience “buzz.” (When studios do deign to make these kinds of movies, such as Up in the Air, they still take them to festivals in search of indie cred and awards prestige.) As the whole of the country stumbles through economic tribulation, the film industry has lost its middle class, and the film festival that this year marketed itself as the locus of a “cinematic rebellion” has become a crucial platform for the kind of film that used to be commercial. Call it a market-based irony.

Five years ago, Sundancers were welcomed at Salt Lake City Airport by a giant banner over baggage claim, advertising a once-giant weekly entertainment magazine produced by a still-fairly-giant media company. Today that magazine is barely as thick as a pamphlet. Three years ago, Volkswagen took over a centrally located building on Main Street, for the apparent purpose of handing out absurd swag. (Then a starving film blogger, I ate New Beetle–shaped pasta for weeks.) This year, free stuff was generally harder to come by. But while the Main Street party scene suddenly slowed midweek, theater crowds stayed steady (a screening of buzzy social-media doc Catfish on the festival's second Thursday filled every seat, with dozens of wait-listers turned away). In the festival's final days, films began to sell, which was a surprise. After endless “hard times” hype, every sale announcement had the aura of a tiny miracle.

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“The excitement to buy is long past at the festival,” said Tom Bernard, the co-president/co-founder of Sony Pictures Classics, one of the only studio-funded art-house labels still standing. “A few years ago, it was sort of this Wild West, where all of these sales agents rented these giant houses and had their whole legal machine in the backroom, where you'd bang out a deal fighting with four other people, and the middlemen would continue to raise the ante, and you'd walk home and go, 'What did I just do?' That's over.”

Bernard cites 2008's Hamlet 2 — “that crazy movie that Focus bought” — as the prick that burst the bubble. “Hamlet 2 went for $10 million. $10 million used to be the number. That's gone.” This year's biggest sale, Lisa Cholodenko's The Kids Are All Right, reportedly sold to Focus for $5 million. “And that was an all-night bidding event,” Bernard said. “I don't know if that pays for the giant house with the legal machine.”

Sony Pictures Classics likes to focus on promoting auteurs, and Bernard said their efforts to buy at this year's festival were frustrated by “middlemen” who work on commission — “like people selling houses” — and keep directors out of the process. “We met very few filmmakers at the festival. We met a lot of their middlemen. We made a big offer on the Cholodenko film, and we were never allowed to have access to her. Which I find astounding — you make a seven-figure offer, and you never talk to the filmmaker? That is the opposite of what the festival is supposed to be about.”

In recent years, the festival map has become more decentralized, and filmmakers who might have been disenfranchised by Sundance found festivals with a smaller buyer contingent, such as SXSW and the Los Angeles Film Fest, to be valuable alternative premiere platforms for low- (and no-) budget indies. Some of the most talked-about American indies of the past few years (Funny Ha Ha, Four Eyed Monsters, Medicine for Melancholy, Paranormal Activity, to name a few of the Independent Spirit Award nominees and winners) never screened at Sundance. Of course, a lot of fine micro-indie films (Humpday, Goliath, Momma's Man, You Wont Miss Me) did premiere here, but doing so amid the nip-slipping celebutantes who have become synonymous (fairly or otherwise) with Sundance's dark side may have put them at a disadvantage.   

“The low-budget films tended to not get the attention they deserved,” Sundance Director of Programming Trevor Groth admitted before this year's festival began. And so Groth and festival director John Cooper — both longtime Sundance programmers promoted this year after the departure of Sundance chief Geoff Gilmore — killed Spectrum, a sidebar that served as a catchall for films that for whatever reason didn't fit in competition (like Old Joy, one of the most acclaimed American indies of the last decade), and created NEXT, a new sidebar dedicated to showcasing very low-budget movies. Groth says NEXT is part of a “long-term plan” for the festival to reflect, and eventually correct, the tumult of the indie-film industry.

“There's got to be a realistic expectation for what these films can make. I think it's getting to a healthy place, where films are going to be made for a modest budget, they're going to be sold for a little bit more, and they're going to make a little bit more than that.” Groth acknowledges that for a lot of tiny-budget films, the best-case scenario is that “they're not going to be sold, they're going to be self-distributed.”

The good news is that the roster of micro-indie Sundance films finding sustainable success with self-motivated, nontraditional releases grows every year. Good Dick, which attracted mixed reviews when it screened at Sundance in 2008, has more than made back its six-figure budget on an all-stops release strategy that included a brief run at the Nuart, Netflix rentals and video on demand. Nolan Gallagher, whose Gravitas Ventures brokered Good Dick's on-demand deals, says the smaller a film's budget, the better a candidate it is for emerging markets like VOD. “I tell a filmmaker who spent $100,000 on their movie that I can make them $100,000, and they're thrilled. I tell the maker of a $4 million film I can make them $100,000, and they say, 'My heart just sank.' ”

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This year Sundance made a gesture toward connecting truly indie films to emerging distribution formats by setting up a deal with YouTube, through which three films world-premiering in the NEXT section (Bass Ackwards, Homewrecker and One Too Many Mornings), as well as two films from last year's festival (Children of Invention and documentary-Oscar frontrunner The Cove), were available for online rental for 10 days, at $3.99 a pop, with the bulk of the grosses going directly to the filmmakers. The marriage of films to viewing format and platform proved to be awkward. The YouTube audience is used to getting a very specific kind of media (bloopers, exhibitionist performance, documented reality) for free. The rental program asked viewers to extend their attention spans to embrace ultrasincere low-budget filmmaking — and to pay for the privilege. In the end, none of the films racked up more than 500 rentals, and most of them attracted nasty comments from the YouTube faithful. “How about a preview before I spend my four bucks?” user midnoon35 wrote, in a typical complaint. “Just because it's indi [sic] doesn't mean it's any good.”

A somewhat more successful symbolic experiment in bridging the gap between Sundance's natural elitism and the ongoing democratization of the means and tools of indie-film production came in the form of Cyrus, the latest film directed by brothers Jay and Mark Duplass. Produced and to be distributed this spring by Fox Searchlight, Cyrus stars Superbad's Jonah Hill as the annoying and potentially diabolical son of Molly (Marisa Tomei), a beautiful spitfire who takes an unlikely romantic interest in John C. Reilly's lovable loser. As the last Duplass feature, Baghead, tweaked the conventions of the indie horror film, Cyrus riffs on a venerable subgenre of romantic comedy: The Schlubby Manchild Falls in Love and Grows Up.

Sundance has premiered each of the Duplasses' three features, but it's hard to overestimate the extent to which, in two short years since Baghead's premiere, the brothers have graduated to a different league. Cyrus is estimated to have cost about $5 million — or, roughly one hundred times the reported budget of Baghead. Whether intended or not, Sundance is effectively holding up the Duplass family as the poster children of the current wave of self-made American indie filmmakers made good. That's a shame, because as the brothers' films become more “legitimate,” they become less interesting. Their first feature, The Puffy Chair, was technically uneven, but it had an anarchic quality to its comedy that's sorely missing from the comparatively staid Cyrus. If this is what a compromise between the two poles of the indie industry looks like, maybe polarity isn't such a bad thing.

On Wednesday, just past the festival's halfway point, a concrete symbol of changing times came in the form of an e-mail blast from former Miramax publicity vice president Andrew Bernstein, announcing that as of Friday, January 29, the New York offices of Miramax would be closed for good. It wasn't exactly bombshell news that Miramax was effectively shutting down — Nikki Finke published a memo from president Daniel Battsek in late October announcing that he'd be gone by February 1, with what was left of daily operations to be handled out of the Disney offices in L.A. It was the lack of impact on the ground in Park City that seemed significant.

The morning after Bernstein's e-mail, New York filmmakers Zeina Durra and Vanessa Hope sat in an otherwise-deserted film-festival lounge. Durra is the director of the Dramatic Competition entry The Imperialists Are Still Alive!, a bone-dry, Godard-meets–Whit Stillman political satire, shot on super 16 mm, about multicultural class clash in post-9/11 New York City. Hope, the petite blond wife of famed indie producer Ted (Happiness, The Ice Storm), produced Durra's movie, which is the very definition of a tough sell. When asked how they felt about premiering and looking for a distributor at Sundance the same week Miramax was shutting down, Hope acknowledged, “It's the end of an era. It's too bad.” She shrugged slightly, as if to say, “What can I say? I have more pressing problems.”

Durra, younger and less tied to the previous generation of indie film, laughed off the notion that Miramax could have mattered to someone as mired in the new DIY world order as she. (The bulk of the Imperialists budget, which Hope won't disclose but I'd estimate at no more than $1 million, came from private equity and tax credits.)

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“I don't think Miramax would have helped me anyway, so I'm okay!” Durra exclaimed. “How indie were they, really?”

I gently argued that she is probably only at this festival with a sales agent, hoping to find a commercial outlet for an obstinate art film, because the Weinsteins' early acquisitions of truly independent films like sex, lies and videotape and Clerks created a Sundance marketplace. Ironically, Durra's sales agent happens to be Andrew Herwitz … former head of acquisitions for Miramax.

“No, they were indie,” Hope agreed.

Durra continued to protest, her British accent rising half an octave closer to a shriek. “But, like, establishment indie.”

In two decades, the memory of what the sale of sex, lies and videotape meant — to this festival, to a wider world turned on to the idea of seeing independently produced films in multiplexes because of it — and the risk involved in its acquisition have been wiped away by the spoils of its success, the increased clout and Disney resources that allowed Miramax to produce conventional fare, such as Shakespeare in Love. The shocking news is not that Miramax is no longer the savior of indie filmmakers but that there's a generation of indie filmmakers who don't think Miramax was ever indie at all.

Perhaps Disney chose the week of Sundance to shut down its loaded indie label because it thought journalists wouldn't be paying attention. Certainly, they weren't initially paying much attention to Miramax co-founder Harvey Weinstein, who was in Sundance to throw a big party for Nowhere Boy, a film by British artist Sam Taylor-Wood chronicling the teen years of John Lennon. On Wednesday night, before the party, Weinstein was seen at a press-and-industry screening of Blue Valentine, Derek Cianfrance's experimental marriage drama, starring Ryan Gosling and Michelle Williams. Was he interested in buying it? “That would be crazy, even for him,” one sales agent told me.

Blue Valentine entered this festival as a “hot” acquisition title. Then it screened, and skepticism set in; the nonlinear, loosely plotted antiromance was, in spite of its stars, deemed by many to be “uncommercial.” Over drinks on Main Street one night as the festival was winding down, a journalist friend got worked up over the idea that by screening at Sundance, such a film is judged first and foremost for its mainstream potential. “When did 'uncommercial' become the worst thing you could say about a movie at Sundance?” he seethed. “And if that film is 'uncommercial,' then we're all doomed.”

On Friday, the Weinstein Company announced it had picked up the title for seven figures. Thanks to TWC's spotty recent history and questionable future, for some fans of Valentine, this was not considered a victory. As critic Shawn Levy tweeted upon hearing the news, “So much for that film. …”

Weinstein may be notorious for recutting festival pickups or leaving them on the shelf to rot (see All the Boys Love Mandy Lane, bought in 2006 and never released), but TWC's last festival purchase, Tom Ford's A Single Man, has been a measured success both at the box office and on the awards circuit. As the indie industry streamlines, we can only hope Weinstein has learned the lessons of bloated failed productions, such as the tacky Nine and, in focusing on turning smaller films into awards contenders via savvy marketing, is plotting a return to his own before-the-fall modus operandi.

For those whose time in the industry predates the indie-arm boom, the collapse of studio-dependent production wings may not be a tragedy so much as a natural correction. John Wells, ER creator and producer/writer/director of The Company Men, starring Ben Affleck, characterizes himself as someone who came to Sundance “desperately trying to find someone to release my film.” He also sees film festivals adapting to fill the void left by shuttered labels in the marketplace.

“When all the majors got into the indie business with their indie arms, the festivals became about how to promote those films,” Wells said. With the obliteration of production slates at labels such as New Line and Paramount Vantage, films like his own are being made outside the studio system — Men was financed on foreign presales, tax credits and bank loans — turning Sundance into an increasingly crucial site for sales, and for attracting future private financing. “I think the festivals are taking a more important role in getting these films seen, and they're going to be essential to getting these movies made.”

As his sales agents negotiated with interested parties at the festival's end, Wells seemed nothing if not optimistic about the survival of starry midrange dramas like Men in the post–indie arm era. “It was nice while it lasted,” he said.

But Bernard wonders, like Durra, if “those companies that were shut down, were they really indie companies, or were they mirror images of the studio system? They were making $35 million art movies.” Citing the rise of ministudios such as Twilight factory Summit, the increasing presence of Precious distributor Lionsgate and the emergence of the VOD market, Bernard concludes, “For all the companies that have shut down, there are new companies that have shown up. You've got a lot of people buying movies — more than ever.”

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“Ladies and gentlemen, this is God.” A disembodied voice, said to be Sundance programmer David Courier, boomed through the Racquet Club, the site of the event's annual end-of-festival awards reception. “Please take your seats. There will be plenty of time to drink.”

The faithful Sundancers did as they were told, and were subsequently treated to a long evening during which expected wins (Restrepo, a doc made by journalists embedded with U.S. troops in Afghanistan, and Winter's Bone, an Ozark family drama directed by Debra Granik, whose previous Sundance film Down to the Bone was Vera Farmiga's breakout) collided with surprises (Mark Ruffalo's directorial debut, Sympathy for Delicious, and quirky romance Obselidia, two of the festival's most critically reviled titles, won awards, while buzzy favorite Blue Valentine did not). The winners, making the most of their unrestricted moments onstage in front of the assembled indie-film community, tended toward rousing and heartfelt (if largely humorless) speeches assessing the state of American indie film — and Sundance's savior role within it.

Eric Mendelsohn, the unexpected Best Director winner for the Edie Falco–starring suburban triptych 3 Backyards, railed against journalists for criticizing Sundance, and positioned its celebrity figurehead as a national treasure: “A lot of people in the press take potshots at this festival — it's gotten too big, it's gotten too small. You go make your own festival. Robert Redford is single-handedly doing what other countries' governments do for film.”

Even comedian Louis C.K., a presenter, expressed appreciation for the Sundance experience. “I hope the audience for these films gets bigger,” he said. “When you watch movies at Sundance, you think, 'People would love this shit.' ”

And Josh Radnor, sitcom star–turned-director of Audience Award–winning ensemble romcom happythankyoumoreplease, proudly positioned his film within the 2010 festival's official theme. “I think my movie is rebellious because it's about people saying no to cynicism and yes to love.”

I had been asking people all week what they thought of Sundance's anti-establishment branding, and no one had come out as guilelessly supportive of it as Radnor. Privately, they'd roll their eyes and bemoan the self-serving hypocrisy of a festival that accommodates so many boldface names and indie clichés pushing its rebel credibility. “There's no aggression in any of these films,” protested a producer who just completed a five-figure movie, and who singled out the surprisingly conventional, Sundance cliché–ridden NEXT films for using the “freedoms” afforded by new technology “for evil instead of good.”

Bernard recalled a conversation he'd had with Sundance's Groth. “I said, 'Trevor, what exactly does rebellion mean? Are you rebelling against your mom? What's the deal?' He said it was a shorthand, and there had been a long meeting as to what the meaning of rebellion was. Which I never quite got from him.”

That the festival had subjected the decision to be “rebellious” to a bureaucratic process would seem to validate the complaints.

But when speaking on the record, many were more diplomatic. Hope referenced James Fallows' Atlantic essay “How America Will Rise Again,” with its emphasis on “the peculiarly American cycle of crisis and renewal,” as a parallel to how the indie industry can heal itself.

“We can be cynical about going back to our roots,” Hope said, but just as the '70s American new wave rose out of Hollywood's post-television '60s bloat and panic, “there's always a rise after a fall, a cleaning house.”

Durra nodded vigorously. “Look, if someone told me to rebel, I'd be, like, 'I'm sorry, I don't understand what that means, I'm just going to make my film,' ” she said. “But when people see that a film like mine was chosen as a 'rebellion' film, they might understand that rebellion is just a move away from enforced stereotypes. It's just about cleaning house.”

The consensus is that this housecleaning was overdue — for Sundance and the movie business in general. “Things are changing dramatically,” Bernard acknowledged. “But I think they're changing for the good.”

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