Market can't absorb every film
There are more movies being made than the market can absorb.
That was the consensus of an AFM panel about emerging trends in film financing held Friday at the Fairmont Miramar Hotel in Santa Monica.
“You’re starting to see some backtracking from (investors),” said Christa Thomas, managing director of JPMorgan Securities’ entertainment industries group.
In a competitive market where more films sink than swim at the box office, quality has become more important than ever.
“Some places you can pre-sell movies, and some places you can’t,” said Peace Arch prexy John Flock. “But you need a decent package. The problem is you can’t pre-sell a lot of these movies (at AFM) because they’re no good.”
Still, the panel — which also included Nu Image chief financial officer Trevor Short, CineFinance prexy Fred Milstein and Axium Intl. VP of business development Jeff Begun — agreed that there is more money pouring into the market than ever before, creating a boon for indie filmmakers.
“What we’re seeing (at Peace Arch) is a group of investors or a single investor taking an interest in a particular picture and investing their own money in it,” Flock said. “I think there’s more of that than we’ve seen in the past.”
While a wide range of industries have felt the effects of the nation’s credit crunch, Thomas said film financing wasn’t one of them.
“I haven’t seen it yet. I’ve seen issues … like too many movies in the marketplace, that have caused investors to take a pause,” she said.
Although Thomas warned that investors may be growing less enamored of independent film, Short said filmmakers could put together a more financially sensible project by taking advantage of increasingly competitive tax incentives.
“Our approach is to pick one state,” said the Nu Image exec, citing the company’s reliance on shooting in Louisiana. That helps filmmakers build relationships and cut down on time spent navigating the tax laws of a new territory.
Ironically, with a weaker dollar, the once-pricey U.S. is becoming a cheap place for foreign filmmakers to make movies.
An earlier panel held at the Fairmont Miramar took inventory of the year in film financing.
Screen Capital principal David Molner summed up the proliferation of funding for slates of films, which has become an undeniable force in 2007. “Does it last? It does,” he said. “Is it a good thing? We don’t know yet.”
In fact Morgan Rector, Comerica Bank’s regional manager for Beverly Hills and Los Angeles, said he had seen the number of one-off film deals cut in half and replaced by slate fund financing.
“We’ve really seen the evolution of the industry from single pictures to slate deals,” he said.
But Summit Entertainment chief operating officer Bob Hayward said, “If you have the right project, there are still plenty of places you can go.”