That Queasy Feeling at Sundance

Amid the excitement over 3D, high anxiety about how to hold on to paying customers

Archetypal Sundance moment: It is backstage after the screening of a hotly hyped film, and Reasonably Famous Producer is being directed toward a backdoor exit by Concerned Minder.

CM: (slightly anxious, motioning) Let's go out this way. So you don't get mobbed.

RFP: (quizzical, half-joking) But I want to be mobbed!

Clearly, it takes more than a writers' strike and its attendant angst to squash the forces of ego and celebrity that animate this annual film festival, which every January swallows whole an entire mountain town in Utah, along with some surrounding acreage. This, even as Sundance vets said the strike kept some celebs away. But that's not what makes the business guys' guts go queasy. What does is this century's dominant media narrative: an established medium's struggles against a Web that makes its products remarkably available for free; the frantic search for a technological silver bullet. And that medium's fervent wish that its intangibles—in this case, that near-mystical communion in a dark theater amid a throng of strangers—retain enough power to bind future customers to ways of old.

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Judging by Sundance's attendees, the fresh-faced and ambitious still congregate around the movie industry's campfire. This is a major point in the business' favor; you won't see that crowd at a radio confab. But whether these guys will make films or short Web video, and who will own that stuff—well, today no one knows.

You hear things in Sundance that you never would have a few years back. Like a programming executive grumbling about justifying the inefficiencies of a hits-driven business to the new breed of financiers—private equity guys. (I can't be the first to realize that the private equity model—one smash hit makes you rich and erases bucketloads of bad bets—closely resembles Hollywood's.) At a panel discussing the state of video on the Web, Erik Flannigan, MTV Networks' EVP of digital, bluntly admitted that a key online player is BitTorrent, the Web protocol that allows the sharing—some would say stealing—of large files, video or otherwise. He cited the quality and quantity of file sharers' wares, no matter how sub rosa the sites where they're found may seem: "Whatever you think is going to happen—lift up the rug. It's happening," he said.

On that panel, smart things were said. The problem with them, though, is the problem of media today: Every wise assertion can be easily countered. In mulling the issue of layering ads somewhere into online video, Flannigan mused that "trying to insert ads after the fact"—after consumers are used to an ad-free experience—"is always a problem." But this is exactly what cinema owners did, and moviegoers long ago stopped booing. Dmitry Shapiro, founder of video site Veoh, impressed me by touting Veoh's recommendations engine, which helps you find videos you might like based on what you've seen, à la music sites like Last.fm. Later someone pointed out that musical taste is partially mathematical—melodic arrangements and harmony are numeric patterns—and thus more translatable to algorithm than what pleases your eye. (I'm not sure I agree, but that I'm still thinking about it means something.)

Oh, yeah, that search for a silver bullet: At Sundance I caught an actual 3D movie, the concert film U2 3D, culled from the massively successful Irish band's 2005 South American tour. The film was gorgeous; refreshingly, few objects and people popped out at you, although at one point Bono reached so far out of the screen that you could practically smell what was under his fingernails.

DreamWorks (DWA) CEO Jeffrey Katzenberg, among others, is agog about this new generation of 3D. This is partly because 3D is pretty pirate-proof: It won't look anywhere near as good at home as it does on a movie theater's big screen even if you have a massive TV and 3D glasses. I don't care for U2, but the experience was undeniable. For a brief time, a thousand of us sat agape in the dark, utterly submerged in an ocean of visual delight. (In 3D, it did feel like an ocean.) For a brief time at Sundance, no one checked e-mail or chatted on the cell.

What will it take for the movie guys to hold on to that?

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