Sundance, Once a Hotbed for Film Deals, Tries to Find Its Footing

The past two years have been a time of major upheaval in the film business — and at the Sundance Film Festival.

Between the diminishing audiences in movie theaters, the consolidation of studios and the shrinking amount being spent on content after the streaming giants had their wrists slapped by Wall Street, few were certain about what kind of market there would be for new films at the current Sundance — typically a hotbed of acquisitions for the brightest lights in the independent film world.

Even the festival’s opening-night gala last Thursday, its first in person since 2020, felt tempered by the reality facing movies.

“These last few years have brought extraordinary challenges for our industry, along with opportunities to respond to the needs of artists and reach audiences in new ways,” Sundance’s chief executive, Joana Vicente, told those assembled. “And as many of this year’s films illustrate, this is a moment when so much is at risk — the health of our planet, human rights, women’s rights, freedom of expression and democracy itself.”

Not exactly a celebratory introduction.

So on Monday, a collective sigh of relief rose through Utah’s Wasatch mountain range, where, within two hours, two high-profile films that had premiered at the festival found eager buyers. Netflix plunked down $20 million to take the worldwide rights to the thriller “Fair Play,” while Searchlight Pictures spent just under $8 million for the musical-theater-geek mockumentary “Theater Camp,” starring Ben Platt.

A day later, Apple TV+ nabbed the musical drama “Flora & Son” for $20 million, and the indie distributor A24 bought the Australian horror film “Talk to Me” for a wide theatrical release this summer.

Despite the deals, the state of movies and how audiences will watch them remained an underlying worry.

“Everybody is wringing their hands about the industry,” said Vinay Singh, the chief executive of Archer Gray, a production company whose film “The Persian Version” was shown in competition at Sundance. “A lot of people have lost their jobs. There are cost-cutting measures happening on spending content. People are worried.”

Indeed, no one seems to know any longer what kind of movie is worthy of theatrical release and what should be sent straight to a streaming service. Distribution and marketing executives have to figure out not only how to sell a movie to an increasingly fickle audience but also how to navigate the needs of corporate parents, often giant conglomerates whose business priorities are constantly in flux.

Plus, there is always the fear of succumbing to “Sundance Fever”— making lightheaded decisions because of the high-altitude fervor of the audience. Over the decades, both streaming services and theatrical distributors have overpaid for films at the festival. Harvey Weinstein spent $10 million for “Happy, Texas” in 1999 only to see it flop at the box office. Focus Features paid $10 million for “Hamlet 2” in 2008, and in 2019, Amazon scooped up three movies for a combined $41 million while New Line paid $15 million for “Blinded by the Light,” only to have it gross $12 million. And that was when the industry was healthier.

Now, with so much riding on every decision, a positive response to a film at Sundance is no longer enough to guarantee that it will attract a theatrical distribution deal.

“I’d like to believe this movie could have done well in theaters,” said Ram Bergman, a producer of “Fair Play,” one of the festival’s most acclaimed and sought-after films. But despite the enthusiasm from the traditional studios, he said, there was little faith that the $5 million R-rated thriller, starring Phoebe Dynevor (“Bridgerton”) and Alden Ehrenreich (“Solo: A Star Wars Story”), could succeed opposite the superhero spectacles without a prohibitively expensive marketing budget.

“You are dealing with a lot of the studios that have convinced themselves that these movies cannot really do well in theaters,” Mr. Bergman said. “It’s a self-fulfilling prophecy. And if a streamer, let’s say Netflix, really wants to get behind it and treat it as one of, like, their high-priority movies, it’s hard to compete.”

Therein lies the challenge. Most filmmakers come to Sundance with the expectation that their film will be shown on big screens across the country. The reality is that their movies are exactly the kinds that are performing poorly at the box office: small, inexpensive, complex and lacking movie stars.

Add the fact that independent chains like ArcLight Cinemas and Landmark Theatres, which were the traditional supporters of indie fare, have closed and the calculus required to make these films successful becomes even more challenging.

Searchlight is counting on fans of Mr. Platt (“Dear Evan Hansen”) and live theater in general to power “Theater Camp,” which celebrates all those who dream of hitting it big on Broadway. The thinking goes that if Mr. Platt can sell out Madison Square Garden, as he has with his one-man show, he can draw audiences to a movie theater. (However, Mr. Platt’s last film endeavor, the adaptation of “Dear Evan Hansen,” grossed only $15 million at the domestic box office.)

“This is a crowd-pleasing movie, and it was designed with an audience in mind from inception,” said Erik Feig, chief executive of PictureStart, one of the producers of “Theater Camp.” “Yet we didn’t mitigate our risk with presales. We took a flier. We did our research into the market, but comparisons change like every 90 seconds, so you kind of build something for a business model that two weeks later is extinct.”

Other buzzy projects did not generate the kind of sales that Sundance, which ends on Sunday, is normally known for. “Cat Person” pleased crowds at the festival, but the critics excoriated it, particularly for veering away from the viral New Yorker short story it was based on. “Magazine Dreams” features an Oscar-caliber performance by Jonathan Majors (“Lovecraft Country”), but he plays a character who spirals into madness and begins carrying a loaded gun — a particularly difficult film to buy in the wake of the two recent mass shootings in California.

And the documentary “Justice,” which turns an investigative eye toward Justice Brett M. Kavanaugh’s Supreme Court appointment and was added to the festival’s lineup at the last minute with much fanfare, disappointed critics, too.

The “Justice” filmmakers say they have received new tips, since their film was announced, that they plan to follow up on. It’s just not clear that the film, which was self-funded by the director, Doug Liman, who is best known for glossy action movies, will find a distributor ready to back an incomplete project.

Despite the challenges, people were thrilled to be back in person at Sundance.

“I feel a deep sense of gratitude to be in this room watching a movie,” Davis Guggenheim said at the premiere of his documentary “Still,” about Michael J. Fox and his protracted battle with Parkinson’s disease.

“Theater Camp” brought its actors onstage to perform. The documentary “Going Varsity in Mariachi” was supplemented by a live performance by Mariachi Juvenil de Utah, and the cast of “Flora & Son” rapped one of its songs. The screenings were often sold out, and a film’s reception could be judged on the spot by the number of standing ovations it received. Still, buyers were being much more selective.

“I think it’s natural that we’re seeing things not happen overnight,” Mr. Singh of Archer Gray said. “I think that’s fine. I actually think it might be a sign of health, because there’s so much stuff in play.”

Mr. Feig echoed that sentiment.

“It’s definitely a challenging market,” he said. “For each of these movies that has landed buyers, there probably weren’t 25 different offers for each one of these. There may be more of a handful. You just have to kind of build them sensibly knowing what your potential options are.”

He also noted the festival’s combination of established names and rising talent, adding with more than a dash of optimism: “This is why Sundance is so amazing — it’s a discovery of fresh new voices. You saw that with ‘Fair Play.’ You see it with ‘Talk to Me.’ You saw that with ‘Theater Camp.’ All brand-new filmmakers, with their very first movie, and they broke through, they made noise, and they found studio partners.”