Sundance Film Festival

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Sam Mircovich / Reuters

A crowd gathers outside a screening at the Egyptian Theater during the Sundance Film Festival in Park City, Utah

The Sundance Film Festival, held every year in Park City, Utah, has seen its share of celluloid villains. But when actor Robert Redford formally kicked off this year's fest on Jan. 21, he targeted Sundance's latest enemy: Paris Hilton.

The socialite turned reality-TV star might seem like an odd target, but to Redford, who has been involved with the festival since its beginning, she's an example of what the festival has become. In his press conference, Redford said Sundance has been "sliding" of late, blaming "ambush marketers" for taking over storefronts to promote their swag and celebrities who just show up for the paparazzi attention. "It kind of engulfed what we did," he said. "You end up with parties and celebrities and Paris Hilton ... and that's not us. Sundance has nothing to do with any of that." This year, by hiring a new festival director, streaming films online for the masses unable to attend and offering a category for low-budget films, Sundance is trying to ditch the glitz and get back to its serious, indie roots.

These roots are sunk deep in two soils: a love for independent film and a lack of money. The festival, then called the U.S. Film Festival, began in Salt Lake City in 1978 as a way for founders Sterling Van Wagenen, John Earle and Cirina Hampton Catania to attract more filmmakers to Utah. Redford was its first board chairman. The inaugural event focused on retrospectives of classic American films, with a few awards given to new works. It was moderately successful, with long lines for screenings and a few high-profile panelists like actress Cicely Tyson, but the organizers were left in the red — prompting them to hold another festival the following year to break even. In 1980, reportedly at the suggestion of director Sydney Pollack, organizers moved the event to Park City on the assumption that holding it at a ski resort in the middle of winter would help draw crowds.

The festival changed titles frequently — from the U.S. Film Festival to the Utah/U.S. Film Festival to the United States Film & Video Festival to the Sundance/United States Film Festival to, finally, Sundance. The last two changes came about after Redford's Sundance Institute took over the festival in 1985. Redford, who owned property in Utah's Wasatch mountains, named the organization after his character in Butch Cassidy and the Sundance Kid; beyond the festival, it provides resources for filmmakers, film-music composers and playwrights through labs and conferences. Though it was relatively successful before, the Sundance takeover pushed the festival into the public eye, drawing more and more people each year, expanding its awards categories and gaining significant industry and press attention.

As studios paid more attention to the films screened at Sundance, the festival became an incubator where indie projects became box-office successes. Winning a coveted award often meant an instant distribution deal. Quentin Tarantino, who had received funding and creative support from the Sundance Institute, premiered his 1992 film Reservoir Dogs at the festival; the film went on to earn more than $2 million at the box office and established his reputation as a significant American auteur. The Blair Witch Project, a tiny, scary independent film produced with a budget of less than $25,000 by two old friends from college in their 30s, was snapped up for $1 million after its screening at Sundance in 1999 and ended up making $249 million worldwide. Since the mid-1990s, many of the independent U.S. films that have gone on to reach a mainstream audience have done so through Sundance, including Clerks, Garden State, Little Miss Sunshine and Napoleon Dynamite.

Although the institute eschews commercialism — the Sundance Institute's stated mission emphasizes discovering independent artists — a variety of enterprises have carried the Sundance name over the decades. The Institute launched a cable-TV arm, the Sundance Channel, in 1996 to air films, documentaries and original series commercial-free. There is also a Sundance mail-order catalog selling home decorations, gifts and clothing; a Sundance resort in Sundance, Utah; and most recently, Sundance cinemas in San Francisco and Madison, Wis.

But success has been a double-edged sword. The festival is widely known and respected, and it attracts some of cinema's best and brightest every year — as well as the fans, shills and paparazzi who feast on them. At this year's festival, which lasts through Jan. 31, the feature films star actors like Ben Affleck, Elijah Wood, Jessica Alba and Dakota Fanning. Yet for every Tilda Swinton, there is a Jon Gosselin to show up and pose for pictures or grab free "swag bags" at lounges set up by retailers who hope to get their clothes, watches and products onto celebs' much-photographed bodies.

And because of Sundance's size and celebrity attention, it has become less of a place where distributors can find unknown works. Recent indie sensation Paranormal Activity, in fact, had its premiere at the Slamdance Film Festival, which was founded by four Sundance rejects in 1995 and takes place in Park City at the same time. Paranormal Activity was made for $11,000, was picked up by Paramount and made more than $123 million at the box office.

If Paranormal Activity had premiered at Sundance, it could have been overshadowed — it had no celebrity stars or high-profile endorsers. And unless Redford's issues are addressed, it may get as bad as Eric Stoltz envisioned in an Us Magazine interview: "Sundance is actually an old Indian word that means publicity."