Commentary: Memo to film festivals everywhere: Change or risk rolling up the red carpet

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The e-mail came late last week from the Full Frame Festival, a springtime documentary extravaganza in Durham, N.C.: "New York Times Succumbs to Economic Pressure; Withdraws From Full Frame Festival."

The Times' message was a sign of the times: These are tough days for the modern creature known as the U.S. film festival, which is being hit by a multiple whammy of bad news.

It has seemed as if there's been a chicken in every pot and a festival in every town (sometimes two or three, in fact) in the past few years. But a contraction in the number, and budgets, of sponsors is beginning to cause a contraction in the size of film festivals. The Tribeca Film Festival, for example, has lost Cadillac, a go-to sponsor for a host of fests, including Toronto.

Sadly, it's probably only the beginning.

Some fests are run as nonprofits, a frequent casualty in recessionary times, and those that aren't usually benefit from sponsors who treat the fests as nonprofits -- that is, as a luxury as far as their investment goes.

Many U.S. fests during the expansion of the past decade also have become their own worst enemy: Telluride now competes with Toronto for big premieres and stars after years of basically staying smaller and out of the way. AFI Dallas executives, meanwhile, have complained that high-profile titles opted out of their fest and for Tribeca once they learned that their film had been accepted in New York; Dallas officials didn't specify titles, but they clearly were peeved they had lost out to a competitor.

The calendar in general is more crowded than a Mormon genealogy chart. Berlin, Tribeca, Cannes and a host of smaller springtime festivals now get so bunched up in a short span, it's hard to know where one ends and the other begins.

There's an even bigger problem: The number of indie features is about to drastically shrink. It's been happening during the past year, but given the lag time between production and the festival circuit, it can be expected to really start hitting this year. Already, Tribeca will pare its slate by nearly one-third; wait for other fests to do the same. There are only so many good movies to go around and far too many fests who want a piece of them.

In these times, many of the major U.S. fests have attempted stability. When executive vacancies have opened up, organizations have filled them from within. At Sundance, the exit of Geoff Gilmore yielded the promotion of No. 2 John Cooper. At the Los Angeles Film Festival, which had to replace Richard Raddon, board member Rebecca Yeldham was brought up to take the position.

There's nothing inherently wrong with filling spots from within; many internal candidates, of course, have learned at the feet of the people who turned their events into powerhouses. The problem is that these directors will need more than ever the vision and courage their predecessors never needed.

They'll need, in what's probably an understatement, to reinvent.

They'll need to court radically different sponsors to stay in business -- youth-themed, scrappy brands who might pay a little less but have the desire and money to spend in a time when higher-end luxury brands will not.

They'll need to program in ways that go well outside the usual mix of big studio product and unknown indie pics: to viral-friendly shorts, live events, cross-promotions with Facebook and Twitter. It might in some cases mean merging with other, nonfilm kinds of fests, such as food and crafts, heretical though that might seem.

And they'll need to try on the kind of digital expansion that in many ways undercuts the intimate, in-person feel that gave fests their appeal to begin with. IFC Festival Direct, which is showing programming from South by Southwest, already makes content available through on-demand and Web platforms. (Sundance has tried, with mixed results, similar efforts in the past.) These initiatives will need to get better and more prevalent because the sad reality might be that a small gathering consisting mainly of films and panels just might not be economically sustainable for a great number of players in the longer term.

Despite all this, there is hope. SXSW, a few years ago just an add-on to Austin's more popular music fest, has become a main event in its own right (though, tellingly, it is making its name increasingly as a launchpad for studio comedies). New directors of all festivals in this country will need to look at their formula, as well as others yet to be discovered. The alternative, after all, is to succumb.

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