MuseWire COLUMN: The Sundance Film Festival begins today (January 19^th) in Park City, Utah, and runs for an exhausting 10 days through January 29^th. When I was an executive in the independent film business I attended Sundance regularly. I’ll never forget the frisson of excitement I experienced when a film I financed and produced – Tom DiCillo’s “Double Whammy” – made its debut. Roger Ebert was in attendance! We sold it for a million dollars above our cost! Those were heady days, indeed.

Even then, though, there were cracks in the fissures. Each year hundreds of aspiring filmmakers max out their credit cards financing quirky and idiosyncratic movies. Some of them might be very good, but we’ll never know. Out of this vast pool of creative energy, only a few are accepted for screening at Sundance. While there are other festivals, they mainly are a waste of time; Sundance is where buyers materialize, if and to the extent they do at all. Most of the buyers in turn are the “independent movie” divisions of large studios; independent in name only, in fact aligned with large multi-media entertainment behemoths.

The deals buyers offer independent filmmakers suck. The filmmakers give up all rights in any and all media whether now known or yet to be discovered throughout the universe in perpetuity. Yes there is an advance, and it may be for a modest premium above negative cost. Typically though it is paid in installments. Typically some portion of it is contingent on the film’s commercial success. Typically nothing trickles down to the filmmakers until after the advance – plus the cost of prints, distribution, marketing, advertising, and a host of other recoupable items – gets repaid. Even then, the filmmakers get only a fraction of what’s left. The distributor keeps at least 50% of the so-called “back end.” It is extremely difficult to imagine a scenario under which an independent film of the kind offered at Sundance recoups its costs, much less makes money.

In addition to this lack of isomorphism between supply and demand, there is a second curious fact about Sundance pick-ups. Most of them turn out to be commercial failures. Many of them never are released after they’ve been acquired, or are released years after the event, or are released with a notable lack of enthusiasm. From an economic standpoint, it’s hard to see why they got sold, to begin with. Four possible explanations, none of which make that much sense: (1) The buyer thinks there’s some prestige associated with the film. (2) The buyer wants to make the talent in the film – often, major stars “slumming” to accrue some indie cred – happy. (3) The executives of the buyer’s independent film division want to give the impression they’re busy, spending down the budget they’ve been allocated, because if they don’t spend it, it’ll get cut next year, which carries with it the grievous prospect they may be out of a job. (4) The buyer wants to preclude somebody else from picking up the film, spending money on it, and not recouping their costs (this last category of pre-emptive acquisition is particularly mysterious, because it’s so contra to common sense).

The simple fact of the matter is that the indie film business has nothing to do with the major Hollywood studio film business. The film industry increasingly is split down a fault line where there are huge, $100 million dollar studio movies, and then tiny indie movies. The big studios require economies of scale. They are driven by marketing demands, not aesthetics. They need to take into account a myriad number of factors, such as maintaining a steady flow of output to exhibitors; the volume of DVD sales; TV and associated types of broadcast rights; and now, the Internet. Whatever aesthetics there are occur by consensus, which makes sense since so much money is at stake. By necessity, they rappel down to a “lowest common denominator” of consumer preference (increasingly, one that can be understood by non-US audiences in addition to domestic ones). This process has nothing to do with plot, character development, cinematography, direction, atmospherics or any of the other characteristics one ideally would like to see associated with creative endeavor.

I don’t know how low the ceiling goes on how much to spend for an indie movie today. Sure, I would spend $10 thousand on one (and I have, on several). Even then you may be making it for your own gratification – because you haven’t spent enough money on it to make it a credible contender. You either have to appeal to an extremely specialized niche, which is willing to pay money to fund it, or see it (note the many movie funding campaigns on Kickstarter). Or, hope that through some unpredictable, indeterminate, random-walk process it gains traction and attracts notoriety and attention, at least enough to recover its costs. If you’re spending more than this – anywhere from $1 million to $50 million – you are in an incredibly dangerous zone, where it’s highly unlikely you’re going to recoup your costs, much less make any money. By the way, anyone who wants to contribute to my gripping dramatization of Wittgenstein’s famous “beetle-in-the-box” thought experiment from Philosophical Investigations, is welcome to do so.

There are several analogies here with the indie record business, with the exception that making records typically costs a lot less than making movies, so there are more of them. There also are more marketing channels for an indie band to accrue impressions. It’s a difficult, though not impossible task; however hard, it’s much easier than dealing with indie film. The key artists for the major multi-national record companies have nothing to do with music. They have nothing to do with art. They have a lot to do, though, with marketing. On those occasions when I’m asked to advise a major artist today, I tell them: get an MBA! Don’t worry about learning how to (pick one: play guitar, perform, write a song, etc.).

I’m not some kind of Luddite, I don’t decry these developments, it’s just the way the market now is structured. I think where people get messed up is when they confuse one with the other; when they think they’re doing something, or on a track to doing it, when in fact they’re doing something else that’s completely different.