Manchester by the Sea Sundance Film
Courtesy of Sundance Film Festival

This wasn’t the first Sundance when Amazon Studios and Netflix hit the Park City slopes, but 2016 marked a turning point when both streaming services proved they are formidable buyers in the movie world.

After a fairly low-key Toronto and Cannes, where some questioned just how serious Amazon was about its film ambitions, the Web giant turned up the volume by landing one of the biggest deals at the festival. It beat out Fox Searchlight, Focus Features, and other studios for Kenneth Lonergan’s searing drama “Manchester by the Sea,” which received a rapturous standing ovation at the Eccles Theatre reminiscent of “Boyhood’s” debut two years ago. The $10 million sale could give Amazon its first front-row tickets to the Oscars — in 2017.

Amazon also snatched up the Whit Stillman’s “Love and Friendship,” based on the Jane Austen novella, and “Author: The J.T. LeRoy” story, a buzzy documentary about the infamous literary fabulist. The latter was the first documentary acquisition for Amazon, which intends to aggressively build up its catalog offerings, Variety has learned. The move comes at a boom time for documentaries, albeit one driven almost entirely by TV — with CNN, HBO, Showtime and now even PBS’ “American Masters” all straddling the lines between the big and small screen.

Not to be outdone, Netflix flexed its out financial muscles before the festival had even started, locking up worldwide streaming rights to three anticipated titles: “Tallulah,” starring Ellen Page; “The Fundamentals of Caring” with Paul Rudd; and “Under the Shadow,” an Iranian horror movie that drew comparisons to “The Babadook.” Theatrical rights to these films are still up for grabs, but by siphoning off an important revenue stream, Netflix dampened interest among would-be suitors. Netflix also seemed to dominate the chatter in Park City, by flying in Chelsea Handler to promote her new docuseries “Chelsea Does.”

The streaming service also is responsible, in part, for the largest Sundance deal on the books: Fox Searchlight getting Nate Parker’s “The Birth of a Nation,” about the 1831 slave uprising led by Nat Turner, for $17.5 million. Netflix is said to have driven bidding up by offering $20 million, but in the end, the producers decided to go with a more familiar theatrical distributor of prestige titles for less money (but still more than anybody has ever bid on a Sundance movie).

It wasn’t long ago when directors were scared to experiment with how their films would reach the masses. But in interview after interview, major talent was asked to reflect on the presence of Netflix, and the new message seems to be a ringing endorsement. “I love Netflix. I just sold a TV show to Netflix,” Selena Gomez, who co-stars in “The Fundamentals of Caring,” told Variety. “It’s incredible the traffic that they get. It’s all that I watch when I’m at home.”

There is a downside and an upside to Netflix and Amazon’s rise. As Gomez notes, the audience that both services reach dwarf those of traditional indie distributors. And their business model, one that is built on streams, not ticket sales, means that they can take a chance and pay top dollar for the kinds of risky fare that is Sundance’s stock-in-trade.

But the online video revolution that both companies are fostering also raises questions about the long-term health of the arthouse scene. Most of the films that earned big deals at last year’s festival collapsed at the box office, from “Dope” to “Me and Earl and the Dying Girl,” and studio buyers are grousing about how disconnected many of this year’s crop of movies seem from popular tastes.

“Sundance hasn’t exactly put its best face forward,” one studio executive griped. “It’s terrible,” said another buyer.

Some of the movies have not been well-received. “Swiss Army Man,” which featured Paul Dano riding a flatulent corpse played by Daniel Radcliffe across an ocean, inspired an exodus of studio buyers and will be lucky if it sells for seven figures. Others, such as the cancer dramedy “Other People,” Kelly Reinhardt’s three-vignette “Certain Women,” Antonio Campos’ “Christine” or the Obama first date movie “Southside With You,” have been effective, even finely wrought pictures, but face questions about their commercial viability when they leave the nurturing confines of the mountainside gathering.

With Netflix and Amazon offering hours of shows and films for free, paying money to see smaller scale comedies and dramas has become less appealing. Even good reviews may not be enough to attract big audience, which may be why traditional studios — such as the Weinstein Co. and Focus Features — have been quiet during the festival so far.

“The audience for movies I might make is much smaller than what it once was,” said Todd Solondz, director of “Wiener-Dog” and a film school professor at NYU. “Most of my students, they watch things on the Netflix or the download, so they’re not going to theaters. That’s why things are so difficult.”

Although Amazon and Netflix’s buying spree seems to usher in a new era for Sundance, there are still time-honored traditions that won’t be going away anytime soon. Amazon will find a theatrical distributor to release “Manchester by the Sea,” and promised that it would launch a competitive awards season campaign for the much-loved drama. So, in the end, multiplexes will carry “Manchester By the Sea” — even if some audiences would prefer to wait and see it on a laptop.

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