PARK CITY, UTAH -- After almost two decades of steady growth, last year's Sundance Film Festival was a subdued affair. Attendance was down, a result of the economic and travel effects following Sept. 11 and the festival's earlier time slot (to make way for the Winter Olympics) that pushed it a bit too close to Christmas, Hollywood's busiest season. But this year's festival has experienced a big rebound, with more films submitted, higher sales and a much more pronounced celebrity presence. Alternatively praised as more pure to its small-film roots or damned for its sharper Hollywood orientation than in previous years, it's a festival that struggles to stay relatively intimate.

Ed Burns, who stars in the upcoming heist film, Confidence, remembers Sundance 1995 as much smaller, more improbable, kind of occasion. One night in particular, at the Egyptian Theatre, was "the night that changed my life."

It was the premiere of The Brothers McMullen, his debut drama, which may still have the highest cost-to-profit ratio on record: the $25,000 (U.S.) film eventually earned about $10-million. The Brothers McMullen is the model of what people think American independent filmmaking, and, by extension, the Sundance Festival, is all about.

"We hadn't enough money to do rushes so it was it was the first time I'd seen it on screen, the first time I'd seen myself in front of the camera. There it was, my movie. That was it. The movie was sold. I got an agent the same day, and I went from making $18,000 a year to having a career."

Recently Burns's acting has become more prominent than his writing and directing, with high-profile roles in movies such as Steven Spielberg's Saving Private Ryan, 15 Minutes with Robert De Niro and Life or Something Like It opposite Angelina Jolie. He's continued directing low-budget independent movies such as Sidewalks of New York and Ash Wednesday. If you haven't heard of the latter, that's to be expected.

"Ash Wednesday opened for one week in New York and L.A. and then disappeared," says Burns, "so I've decided to take a break from directing for about a year."

He figures the acting roles may "give me some more clout" to get the movies he wants done. His role in Confidence is his first real lead (Dustin Hoffman plays a secondary parts) and could be a big step in that clout-building process.

Burns's difficulties as a director are symptomatic in a field where supply greatly exceeds demand. About 1,000 independent feature films are produced every year in the United States and film schools both here and in Canada are enjoying unprecedented popularity. This year there was a record 2,012 submissions for the 16 feature and documentary slots in competition. Yet only between five and 10 per cent of the films that are made ever get released. And even when they do make it to the theatres, they often close quickly, no match for the multimillion dollar studio competition. Foreign film markets and television networks have cut back on their American acquisitions, and the industry is, overall, considered depressed.

Geoffrey Gilmore, the director of the Sundance Film Festival for the past 13 years, has also written and lectured about independent film. He doesn't underplay its current difficulties.

"The marketplace is very crowded and competitive, and movies without major campaigns and major actors can't survive. Even films coming out of Miramax, the kings of marketing, are having difficulty."

So where does Sundance, the great bottleneck of American independent filmmaking, fit?

"I think it's primarily still a festival about discovery," says Gilmore. "Of course we have a lot of films that already have distribution but we've never really been a major launch festival such as Toronto [which often has premieres for upscale studio fall films]. My main source of pride is that we've expanded the possibilities of the kinds of films that are out there. Gay and lesbian work is now accepted that wouldn't have existed a decade ago. There's a kind of low-budget style that wasn't accepted. I think we've really expanded the sense of the possible."

Though Sundance can draw attention to a different kind of film than the movies Hollywood makes, there is also a recognized Sundance backlash. The festival's media overkill sometimes creates exaggerated expectations for small films. Gilmore acknowledges the problem:

"I'm passionate about films, I'm passionate about filmmaking. I'm not at all passionate about the media frenzy, and, in fact, it's something I have real concerns about. . . . Studios piggyback their publicity on these events and capture that media focus, and people accuse us of losing our way."

Though you might not guess it from the press, Sundance remains essentially a small film festival. The mixture of experimental, documentary and first-time filmmakers easily outnumber the movies with stars and established directors. When Gilmore talks about improving the event, he talks about adding more ballast, not more sail: This year featured a new international documentaries program; next year he wants to expand the experimental film presence. These changes won't increase the Sundance audience, but, says Gilmore, will make it a "better balanced" festival.

"We've increased the number of features here less than 10 per cent in the last five years," says Gilmore: "Frankly, not all these films being made are that great. We couldn't add another 50 films and hope to maintain the same level of quality. Sometimes it's hard to find 32 really good films. There may be only five or 10 great films, in terms of overall quality, a year."

The dilemma of American independent cinema remains peculiar, both depressed and hugely prolific. More films are being made than festivals can program, theatres can exhibit. More films, in short, than anyone wants, or has time, to see.