It much more complex than that.
You know from reading the threads here that the camera
isn't the end all of making a movie that can compete in the
festivals. The skill of the people is what matters. As you
know a feature film shot on a $300 Flip recently got released
in theaters. Regardless of how you personally feel about that
movie or how critics reacted, a distributor paid money to
have it released in theaters.
The camera was not the deciding factor.
So, yes, that little Canon camcorder could be used to make
a movie that could end up in a festival - maybe even Cannes
or Sundance. But that is the wrong question.
While there are no stupid questions - and this question is not
stupid - there are right and wrong questions. The right question
is; "Can I make a good movie using this camera?" And that
answer is yes. If you are capable of making a good movie you
can do that with a 35 year old super 8 camera, a 25 year old
VHS camera, a $300 camcorder or a $25,000 Arri.
But the camera is not the only - or even primary - piece of
equipment that is important to making a movie that can
compete with the over 100,000 films that will be submitted to
film festivals this year.
For those of you wanting to enter film festivals (which is what
this thread is about) you need to see movies in festivals. Not
read about the one on 50,000 that make the press - but see
what film festivals are programming. If your goal is to make a
movie for film festivals you need to know what moves get
accepted into film festivals.
If your goal is to learn to make good movies, the Canon camcorder
mentioned by Breaking is a fine place to start. Do not skimp on
audio and lighting.
It's too bad the question isn't as easy as "Is this camera good
enough?" The answer would then be, "No, get
this camera and
your movie will be accepted in festivals."