Hollywood chases elusive low-budget gold

PARK CITY — Standing onstage last Sunday night during a question-and-answer session about his period drama "The Illusionist," director Neil Burger called on a woman in the back of the theater. "What's next for this film?" she asked. "We're hoping to sell it tonight," the director wisecracked. "You want to buy it?"

As it turned out, several different parties were interested. Shortly after the Sundance Film Festival screening of "The Illusionist," copies of the film were rushed to studio executives in Los Angeles who had heard the good buzz and wanted to see it. The movie is a turn-of-the-century murder mystery starring Edward Norton and was made by a group of independent producers for between $10 million to $15 million. Now, an assortment of groups are negotiating to acquire the film for U.S. distribution, with General Electric Co.'s Universal Pictures taking the lead, say people involved in the discussions.

Gay cowboys are hot, big apes are not and Hollywood is looking for answers. The most successful films of last year were either super-expensive events like "The Chronicles of Narnia: The Lion, The Witch, and the Wardrobe," which cost $150 million to make, or low-budget breakouts like "Brokeback Mountain," which cost $13 million. The conventional mid-range studio film, with a production budget of anywhere from $30 million to $100 million, is in the riskiest zone. This week, lower-budget films, not pricey blockbusters, are expected to dominate the Academy Award nominations.

With film revenues falling and audience tastes shifting, the clamor for small movies that might have big box-office potential is on the rise. Some of the least-expensive studio offerings of last year managed to make multiple times their cost at the domestic box office. "Walk the Line," the Johnny Cash biopic released by News Corp.'s Fox 2000 label, cost $28 million to make and took in more than $100 million. "March of the Penguins," a nature documentary that was bought for just $1 million at last year's Sundance festival, became a summer family favorite and brought in nearly $80 million for Time Warner Inc.'s Warner Independent Pictures.

The result is the competition for small movies that can break out has become as interesting as the big-budget battles waged by the major studios, putting festivals like Sundance in an ever-brighter spotlight.