This July, Mikel Olaciregui made his first shock decision as director of the San Sebastian Festival: to stand down. This month’s 58th edition, Olaciregui’s 10th, will be his last.“Galvanizing a big festival like San Sebastian entails a large effort. San Sebastian doesn’t have the resources to have a lot of people driving it,” Olaciregui says. “Inevitably, you notice the tiredness.” Festheads will know exactly what Olaciregui is talking about. A film buff and genre fanboy, Jose Luis Rebordinos, who takes over in January, knows the festival inside out. His appointment ensures San Sebastian’s main axis of power remains in the Basque country, which supplies three core shareholders. The other, Spain’s ICAA film institute, launched the first public challenge to San Sebastian last fall when director general Ignasi Guardans mooted a Spanish film fest shakeup. Part of San Sebastian’s exec team since 1995, Rebordinos is likely to favor reform to revolution, consolidating Olaciregui’s achievements. The largest of these has been building its industrial heft. “Festivals can only survive if they serve the industry,” Olaciregui maintains. Under him, San Sebastian has carved out a niche as the world’s biggest Spanish-language art pic platform. In 2002, Olaciregui launched Films in Progress, the jewel in San Sebastian’s industry crown, a first-peek showcase for films at roughcut. Of last year’s pics, “Cold Water of the Sea” later won a Rotterdam VPRO Tiger; “Puzzle” competed at Berlin. Yet the Festival that Rebordinos inherits — as, indeed, near all festivals worldwide — faces far larger challenges than it did just a decade ago. The biggest, says Olaciregui, is budget. At €6.3 million ($8.1 million), though holding, it pales before big overseas rivals — Venice’s is €12 million ($15.4 million) — and is unlikely to grow in the forseeable future. A second challenge is the current festival circuit. Credit-crunched and cost-conscious, foreign film distributors now only attend four festival-markets en masse: Berlin, Cannes, Toronto and the AFM. Lacking cohorts of international buyers, it’s a tall order for San Sebastian to attract sizeable world premieres, even of local films. Spain’s biggest fall bows — Alex de la Iglesia’s “The Last Circuit” and Guillem Morales’ “Julia’s Eyes” — preemed at Venice and Toronto, respectively. But business — far more than is sometimes thought — does get done at San Sebastian. “Toronto’s number of world premieres is so big that other festivals can give some titles a larger media profile,” Olaciregui argues. Many sales agents screen at Toronto then San Sebastian, to consolidate movies’ critical profiles and crowdpleasing credentials. Secondly, San Sebastian does duty as a confab for the Spanish-speaking world. “Olaciregui has turned San Sebastian into a unique meeting point among fall festivals, a place where people have time to really talk with one other,” says Jose Maria Morales, at Spain’s Wanda. Also, San Sebastian primes Spain’s import business. A competition berth helps trigger a Spain sale, while generating initial buzz. “We have benefited over the years from a wide range of films having been selected. It really helps their positioning in the Spanish marketplace,” says Fortissimo’s Nicole Mackay. As she puts it, San Sebastian promises “pintxos” (tapas), “pelis” (pictures) and “pelas” (money). That is a basis on which Rebordinos can build.