Indie players look for answers in a battered economy
Opening on the day after the U.S. election, the American Film Market could have a different energy this time round.
Will change have come to America? And — to focus on the film biz — how will the outcome of the election impact the market?
“We have people coming from 70 countries on the eve of the election,” says AFM managing director and exec VP Jonathan Wolf. “The opening of the AFM will be the dawn of some new era. It will be interesting to see how the market reacts.”
No matter what happens, this year’s confab had better be different, say execs. Last year’s market was a tough one for many companies, struggling with the side effects of threatened Stateside strikes and the beginnings of a consumer contraction in North America.
But now things are tougher on most fronts. In recent months the credit crunch has snowballed into an almighty financial crisis that has seen stock markets plunge, demolished financial institutions and an infected the global economy.
On an industry level, things have become more constricted as well. Some studios have shuttered specialty divisions and there have been a few overseas casualties too, all with a damaging effect on biz sentiment.
Bank finance is tighter, and, with a few notable exceptions, private equity money has been holding off on committing to new projects. Sure, Middle Eastern and Asian financiers have coin to invest, but with such asset price volatility as witnessed in recent weeks, they’re in no hurry to commit it. “Plenty of people are hedging their bets by simply doing nothing right now,” one banker says.
“Certainly on the financing side, we’re going to see a decrease in capital availability,” says QED Intl.’s head of sales Kim Fox, “which will certainly decrease the number of projects getting made — and that’s not necessarily a bad thing.”
The marketplace has seen a glut of films that couldn’t find distribution, so most execs agree that less product is probably a good thing.
What’s worrying some is how buyers will react to what will be brought to the market.
“There are a lot of questions right now,” says Essential Entertainment chief Jere Hausfater, who will be unspooling “Informers” and footage from Renee Zellweger starrer “My One and Only.” “What is the appetite of buyers based on the economy and the competitive environment in their countries? Are the movies that are being sold going to get made? Are buyers able to transfer money?”
Buyers have become more calculating. Recent markets and festivals have shown them taking more time to reach decisions, waiting for input from critical reactions and from marketing and ancillary departments back home before committing to a film.
September’s Toronto Film Fest, like Cannes, saw a reduced number of North American buyers step up to the plate.
“Typically buyers cluster around a few titles, but they seemed not to agree on much at Toronto,” says Fortissimo Films co-chief Michael J. Werner.
“Deals are not getting done at festivals like they used to — that makes it harder to get attention,” says Arclight Films topper Gary Hamilton, adding, “There is still plenty of money around for production. But the story is all about presales.”
Presales have been tough for independent product for more than a year now. That’s due to a mix of factors: Various territories are experiencing a general economic downturn, as well as a tumbling DVD market and a growing appetite for local films.
“People are more careful and selective — to the degree that distributors send you script notes,” says Summit’s Patrick Wachsberger, who will be at AFM introducing several new titles and showing his buyers a completed version of “Twilight” for the first time.
“Buyers have to pick and choose what they’re buying and how they’re buying it,” adds Mandate Intl.’s prexy, Helen Lee Kim.
Buyers around the world may be pickier and the financial environment may be tougher, but that doesn’t mean no one will be buying anything at AFM.
“The economic climate of the world over the last few weeks has made everyone nervous,” says the Film Department’s sales chief Steven Bickel. “But everyone still has businesses to run and films to release.”
Ben Roberts, a former U.K. buyer at Metrodome who now heads new sales outfit Protagonist Pictures, agrees that buyers still have a need to build slates for 2009 and 2010. “They are either looking for bargains or affordably priced films,” he says. “Our lineup is therefore all about marketable value. That can be talent-driven, or with the kind of PR values that can allow distributors to replace expensive P&A on titles that are not entirely theatrically driven. All our titles are either completed or fully financed. We can say to buyers, ‘The films are real, you’ll have them next year.’ ”
Paramount Vantage Intl.’s head of sales Alex Walton says his expectations for AFM are very positive. Walton will be talking to buyers about three new titles, Neil Jordan’s “Ondine,” Gela Babluani’s “13” and Michael Moore’s documentary on the fall of the American empire. “It’s going to be an interesting marketplace,” Walton says. “We’ve got films that are either filmmaker-driven or a marketable concept in thriller ’13’ or a brand like Michael Moore. Buyers are in real need of films. … I don’t think buyers won’t be buying.”
Sellers point to buying strength in the U.K., French and German markets, though they report that Spain and Italy remain slow. South Korean buyers are more acquisitive than a couple of years ago, as distribs there compensate for a slackening supply of local product. And Japan, the world’s second-largest entertainment market after North America, is still buying consistently, but at prices that have continued to drop in the last 18 months.
Genres expected to succeed are action, thrillers and horror; straight drama without top-level casts is in the worst position — it is risky theatrically and offers little to DVD buyers.
But on the heels of a gripping U.S. election, will buyers be filling AFM’s screening rooms and actually watching movies?
“AFM is not known for its packed screening rooms,” reminds Protagonist’s Roberts. “It was always either a video market or a presales market, but this time it needs to be something in between.”