Overseas, underestimated

Specialty and foreign-language fare make waves while swimming against the mainstream

For years, U.S. pics ruled supreme overseas. Now, the throne is beginning to show cracks.

This sea change is certain to be the topic of conversation as buyers and sellers come together at the American Film Market, which runs Nov. 1-8 at its usual beachside haunt in Santa Monica.

The gaining strength of non-English-language titles and local production means buyers will be more picky when perusing American projects, seeking out studio-level fare versus the umpteenth edition of some forgotten franchise.

There’s also a surge in foreign sales companies, meaning even more competition for U.S. sales arms.

While international distribs will never tire of the Hollywood studio tentpoles, indie fare and foreign titles are catching on: “Brokeback Mountain” rode away with $97.3 million in overseas box office receipts — the most of any nonstudio pic. After that, foreign titles dominated the top-10 list.

“There were a number of years when there was this idea — an idea fostered by the major studios — that the indie marketplace was a joke. It’s not. It is a very serious, multibillion(-dollar) business,” says Michael Ryan, head of London’s IAC Films and chairman of the Independent Film & Television Alliance, host of AFM.

In the U.S., a new generation of mini-majors say they’re in the best position to benefit, since they have the clout to package projects with top directors and stars. Such companies include Sidney Kimmel Entertainment, Mandate Pictures and Weinstein Co., never mind the studio-linked sales arms such as Focus Features Intl. and New Line Intl.

The foreign sales biz took a painful tumble at the turn of the new century but appears to be making a comeback. Foreign rights sales can be a reliable, relatively lucrative stream at a time when the movie biz finds itself in flux.

Since the last AFM, there’s been a proliferation of new sales companies, both in North America and overseas, fueled in part by an influx of private equity money.

Many are predicting Paramount Vantage will probably jump into the game and launch an international sales arm once veteran sales exec Nick Meyer leaves the top seat at Lionsgate Intl. for Par’s studio specialty arm, where he’ll serve as co-prexy with topper John Lesher.

Warner Independent Pictures, also under new leadership, isn’t planning on starting a foreign sales arm, although some of its pics will continue to be repped at AFM by outside sales agents. Hyde Park Entertainment will be giving foreign buyers their first glimpse of “The Astronaut Farmer,” starring Billy Bob Thornton, Virginia Madsen and Bruce Willis, at AFM. (The project began at WIP, but will be distribbed in the U.S. by Warners proper.)

Former Artisan topper Bill Block used backing from private equity to launch his own financing and international sales company, QED Intl. He recently returned to L.A. from a pre-AFM tour overseas and says foreign distribs are aching for well-packaged product. He adds that nonstudio films in the

$7 million-$15 million budget range are especially appealing.

And, in the coming weeks, international sales vet Jere Hausfater, previously with Miramax, is expected to launch his own shingle backed by private equity.

Even more established companies are expanding. GreeneStreet Films has opened an L.A. office, where GreeneStreet Intl. topper Ariel Veneziano is now based. During AFM, he’ll show first footage of Russell Crowe starrer “Tenderness” and comedy “Bill.”

Not everyone is so bullish. Myriad Pictures prexy-CEO Kirk D’Amico says the foreign sales biz remains tough.

“Every time you throw a rock, you hit a new sales company. But this business hasn’t gotten any easier. The studios still take up the lion’s share of the pie internationally in almost every territory. It means we are all left scrambling for the crumbs,” D’Amico says.

“These things go in waves. You have to grow and adapt. One thing we are doing more and more is financing and co-financing to make sure we have bigger films,” D’Amico continues.

D’Amico notes that a handful of bigger projects will account for much of the theatrical sales activity at AFM.

“What’s happening is that companies like us and Mandate and Lakeshore Entertainment are adding one or two big films to the slate at each market,” he says. “Those films tend to take up the slots with the bigger distribs.”

But there will be plenty of competition at AFM from sales agents selling non-English-language product. The numbers are staggering: In 2001, there were eight exhibiting companies from Asia at AFM: four from Japan and four from Korea. At AFM this year, there will be at least 54 companies from Asia.

AFM may be called the American Film Market, but part of its growth spurt over the past few years is directly related to the surge in foreign product.

The biz is buzzing about the overseas B.O. results for foreign pics this year, particularly South Korea’s “The Host,” which reaped a staggering $82.2 million.

It’s been slim pickings for American fare. After “Brokeback Mountain,” “Perfume” — primarily a German production — holds the No. 4 spot, while “Final Destination 3” and “Underworld Evolution” hold No. 9 and No. 10. In Japan, American pics sometimes aren’t even making the top five.

But when it comes to U.S. films, one thing hasn’t changed — foreign buyers still want a U.S. theatrical release, and they still want stars, whether actors or directors, not to mention proof that a project indeed has financing.

That’s where players including Focus, New Line, Kimmel, Mandate, Lakeshore Entertainment and Hyde Park are making strides.

“There aren’t too many companies selling product that are also distributors, like us,” says New Line worldwide distribution and marketing topper Rolf Mittweg.

Foreign buyers don’t just care about the actual theatrical release; they want assurances the film will be handled well.

That’s why Mittweg always uses two days at AFM to meet with his foreign distribs to go over marketing campaigns and the intricacies of selling a pic in today’s marketplace.

In terms of its offerings, New Line will be selling Adam Shankman’s “Hairspray,” toplining John Travolta; Brett Ratner’s “Rush Hour 3,” starring Jackie Chan and Chris Tucker; and Gavin Hood’s “Rendition,” starring Reese Witherspoon and Jake Gyllenhaal.

Mark Lindsay, the former Miramax Intl. exec who now heads Sidney Kimmel Intl., notes that as studios make fewer movies — witness Disney’s recent decision to cut back to eight pics a year — there are more openings at the local exhibition level.

“I also think that more money is going into better productions,” Lindsay says.

During AFM, Kimmel will screen spy thriller “Breach” to buyers for the first time. (Universal distributes Stateside.) Kimmel also will be showing first footage of Frank Oz’s “Death at a Funeral” and Ira Sachs’ “Matrimony.”

Weinsteing Co. Intl. prexy Glen Basner — a former Focus Intl. exec — says there is real business to be done at AFM for companies bringing quality product. He’ll be selling “Nanny Diaries,” a Weinstein Co. project, and “1408,” a Dimension production.

Basner will also be selling titles on behalf of other production houses. They include Endgame’s “Brothers Bloom,” to be helmed by Rian Johnson and starring Rachel Weisz; and two titles from the Mayhem Project, “Make it Happen” and “Clocktower.”

“It’s when you force product into the marketplace just because there is financing that you run into trouble,” Basner says.

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