This year the Sundance climate changed radically. Gone were the new-media wannabes, the dotcom startups and digital manifestos. Buyers seemed subdued and tentative, hyper-conscious of the difficulty of a small movie “breaking out” in an overcrowded marketplace and of the unlikeliness of another Blair Witch scenario. But this year Sundance was characterized, perhaps ironically, not only by this reticence on the part of the acquisitions executives, but also by some increasingly diverse, extremely high-quality filmmaking (both mainstream and unusual) inspired by the increasing need to outshine the competition in an already glutted marketplace. It does seem increasingly hard to be original—two different features this year featured musical numbers about fake vaginas! These days your average Sundance film-school-grad coming-of-age feature—smart, funny, and peppered with sex scenes and/or homosexual revelations—simply won’t cut it. The films now have to be more lurid, more exceptional. With slapstick, surreal, sublime, ridiculous, and shocking the order of the day, the stakes grow higher and genres must be pushed or newly fashioned to accommodate endless hybridization.

Corresponding to the above attributes, festival-successful features included: Hedwig and the Angry Inch (the film of the off-off-Broadway musical about a transvestite singer, post-op with only a little piece of flesh left), directed by its star, John Cameron Mitchell; Super Troopers (a k a “Police Academy on crack”) by commercials director Jay Chandrasekhar; Waking Life (a boy’s journey through a maze of dreams digitally painted on real imagery) by Richard Linklater; The American Astronaut (a black and white retro space musical on acid) by musician Cory McAbee; and The Isle (an extraordinary sadomasochistic love story set in a Korean fishing retreat) by visionary Korean filmmaker Ki-Duk Kim.

Sundance Film Festival is in its 20th year. Robert Redford’s Park City project has grown from a total of eight screenings in 1981 (the number submitted) into a hugely commercial, internationally acclaimed occasion as well as a conglomeration of year-round film-related laboratories. Ever since Soderbergh’s Sex, Lies and Videotape (1989) changed the festival’s tempo and brought in media attention, the scale, competition, and commercial impact of Sundance has escalated enormously, dragging in its festivals, the new “alternatives”: Slamdance, Nodance, Lapdance, Scumdance, Whateverdance. Now a festival whose success is measured by the reactions of the acquisitions people, Sundance is considered by many to have become a minor league and a feeding-ground for Hollywood. Thus the festival’s success is also its own failure. Certainly Sundance now reflects how the last 10 years have seen the relationship between independent and Hollywood cinema become increasingly fraught with confusion and paradox. What constitutes an independent film by Sundance criterion is increasingly difficult to discern, especially when the festival’s screenings now range between a Taiwanese short And she wasn’t (half an hour’s footage of a child’s perspective of a dog being beaten) and Enigma (a $20 million Tom Stoppard scripted period thriller produced by Mick Jagger and starring Kate Winslet, Dougray Scott, Jeremy Northam and Saffron Burrows).

Moderating a panel at Sundance titled “20 Years Later—A Look at the History and Future of Independent Film,” Geoff Gilmore (festival programmer and co-director) defends himself as “no purist” and explained his inclusion of Enigma in festival programming as an example of “going with the times” in the ever-changing marketplace of independent cinema. Cited by Gilmore as “the quintessential indie,” Crouching Tiger, Hidden Dragon is a perfect example of the independent sensibility entering Hollywood and a perfect example of the anomalous nature of the “independent cinema,” comprising as it does a kind of mass mall-culture indie, clearly designed for sequels. Also on the “20 Years Later” panel, Gus Van Sant pointed out that if it were possible, sequels should be made before or instead of the original movies since they score the biggest at the box office and in the video market.

Various filmmakers, buyers, and producers on the panel discussed the problematic and changing relationship between the ethics of independent filmmaking and the demands of an increasingly challenging marketplace. Contrary to the ideal scenario, the increase in independent films does not correspond with an increase in screens, particularly when multiplexes tend to show Dude, Where’s My Car? on six screens rather than an array of no-star, low-interest, potentially subtitled or narrow interest material. A new psychology has indeed entered the independent marketplace, based on Hollywood notions of keeping a screen and the importance of the first weekend. Films now stay in cinemas for shorter and shorter lengths of time—the 20-week run has been reduced to 10- and the four-week flop now only stays for two. Independent filmmakers do have a new self-consciousness in relation to the marketplace: first features or even Sundance shorts represent a possible ticket to Hollywood. First-time filmmakers “come from nowhere and suddenly they’re the next hot thing. They’re on the cover of Entertainment Weekly. That changes the aspirations of people in film school and writing scripts,” said Bingham Ray, co-founder of October Films.

The Sundance panel argued that personal low-budget filmmaking is prohibited by this new awareness of the market. Pioneering directors like Van Sant, Allison Anders, Charles Burnett, and Christine Vachon all complained of the erosion of the culture of independent film. They argued that current films no longer relate to larger issues—they are more self-reflexive independent aesthetic entities than political statements. Previous years of Sundance must be credited for opening up the world and the marketplace to the margins (African-American, gay and lesbian), but perhaps now these particular films don’t seem so necessary or pertinent—certainly they don’t stand out anymore. The search instead is for original genres and diverse styles. In any case, what constitutes socially valuable content is in question—not just inside the film business. As raised in the panel sponsored by the L.A. Times, the press is only making the situation worse by focusing on stars and box office numbers. Such deference to the star system brings about nostalgia for the ’70s, when critics like Pauline Kael could champion a lesser-known film and cultivate its following. By contrast, Variety now records complaints about the returns involved in the independent film business; a recent issue quotes Mark Ordesky (President of Fine Line Features) saying, “If you look at how many films that were picked up out of Sundance and have grossed over $10 million domestically, it’s a very, very small list.” Reviews now critique marketing campaigns and little is written about the directors themselves.

More positively, the next pull seems to be toward international diversification. Mark Gill, speaking on behalf of Miramax, claims the company hopes to make and acquire more foreign title films. The success of Crouching Tiger seems not only to be opening the door to more Asian films but to subtitled films in general. New and cumulative audience sophistication should help smaller films, and the digital medium should increasingly act as a great democratizing tool and facilitator for personal visions. Hope lies in potential new models for distribution such as the “College Market Digital Network,” which aims to help spread smaller films across America. Various forms of broadband and internet circulation will also help break down national borders. James Schamus, co-writer and producer of Ang Lee’s films, foresees a future that includes “a festivalization of exhibition environments.” On that principle there should be room for even the most personal visions, the most political statements, the most geographically diverse films, and the most blockbuster stupid movies to all co-exist in relative harmony.