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Constantin’s Martin Moszkowicz on Local Industries, VOD and a Huge Shift in Arthouse Buys

Constantin head surveys deep change in the international film industry

One of the European industries most senior figures, Constantin Film’s Martin Moszkowicz talked to Variety on the eve of this year’s Berlin Festival on key trends in an international film industry now in deep long-term transformation. His analysis is very much worth quoting in full:

How has Berlin 2015 finally shaped up?

The Berlin Competition program is set,. There’s the usual mix, some interesting titles, a wide variety of movies from all over the world. There are television shows. We actually have a TV show that’s showing in Berlin. So I think that there is more of the usual. In market terms, things are getting in later and later this year, coming in sometimes during the early days of the market. So far there is a mix of various projects. “There’s no ‘Hateful Eight,’ like at the AFM, but there are projects from FilmNation, Mr Smith, Lionsgate. But I don’t see any big movies there.

Regarding indie/arthouse films, there’s a huge shift to sell finished movies, not pre-sell – Sundance was the tip of the iceberg – because these kind of movies are so execution-driven. There are, so to speak, bigger independent movies, but definitely a drop not a lot of them. Movies budgeted at over $30 million are by far the exception…

From the beginning of the decade, a flood of U.S. movies hit Berlin. At times, it seemed more like the American film market than the European film market. Last year, there were less U.S. movies, and certainly less movies got sold, and this year, there seem to be even less movies again.

Yes, I think there are less movies again. It has really to do with the flood of projects that came in two years ago, with the shift in strategy by the studios. Obviously, the studios decided to do less films and concentrate on huge tent-poles and not so many tadpoles. These projects then flooded the independent market. A lot of them did not get made. NOW, people have adjusted to the market conditions, that these big movies are hard to finance. Every distributor is suffering from exactly the same that our industry is suffering: the spread between the big, huge tent-poles, the Marvel movies, the studio pictures, the “Star Wars,” and the so-called mid-sized American movies. There is a huge difference there. That’s more a general observation. Box office’s global rise stems from three factors: China, higher ticket prices and local production.A lot of the distributors have a lot of local productions, like we do, it’s just one example, but I can the same about Studiocanal, or TeleMunchen in Germany, or eOne in the U.K., or Lionsgate. They make up for the loss in mid-size American movies that were sort of the backbone of the independent feature film market. So again, there are a few, big must-have movies; less-and-less mid-size movies: and a myriad of smaller pictures, many straight-to-ancillary fare. They have no or little theatrical value. And then there is the art house market, which is going more into the direction of seeing films finished, and not pre-sell them.

Do you think Sundance is something of a different world, It seemed a vibrant edition, but if you’re selling to the U.S. you have a) a far more developed VOD market, and b) an economy which seems to be rising slowly, which you don’t get in a may parts of Europe, etc, etc?

My feeling is that the U.S. entertainment market is more – and that’s probably not new, it’s always been like this – is much more adaptable to new situations, new technologies. It moves much faster than a lot of the especially European markets, and also some of the Asian and South American markets, where the demise of the home entertainment business has not really been made up by substantial VOD or SVOD possibilities. Maybe the exceptions is the U.K. which has such a strong SVOD market. The deals made by Amazon, Netflix are pretty substantial. All the UK distributors have output deals with those platforms. But in other countries – France, Germany. In Germany we still have a sort of somehow sound DVD market – even though a big part of that market is TV series, which are getting better and better. But the feature film DVD market is also declining. But obviously southern Europe, Italy, Spain, is a complete mess. Not to talk about Greece or Portugal or the smaller markets. In these markets, a distributor has a theatrical possibility on a movie, and if it doesn’t work, he is left with a big loss, because there is not a lot that he can do. From a buyer’s perspective, that makes it so difficult to acquire those movies, because unless you have a theatrical hit, you are pretty much done for.

We’ve talked a lot over the last recent years about projects coming onto the market which are only semi-packaged…

What we see is that there are more of what we call trial-and-error projects, where you see a project with a certain actor or director packaged, and they come to the market and they see whether they can sell it, and if they can’t, they re-package it and it comes back with a different cast, or different elements attached. That happens more and more.

We see a lot of projects where there is no U.S. distribution attached. On a big movie where you need a U.S. release, and you need the U.S. P & A to fuel the international marketing, there it’s mandatory. That makes it extremely hard to buy those movies. Then in every market there is always every year one or two big box office surprises that usually come not out of the U.S. but from the independent market, France or Scandinavia, sometimes the UK. That is also a shift. That is because our theatrical audience in Europe is getting older and older, and they are also seeing more movies. The grown-up, adult, 45-plus market is getting stronger and stronger. That’s the reason why “The Intouchables” and all these movies have been doing so incredibly well, not only in France but also in Germany. American movies, classic Hollywood movies are going to have a harder time definitely in Europe for the years to come, unless they are huge tent-pole movies. Movies in general are becoming a spectacle: Story-driven films are moving to Netflix, Amazon, TV series. There is definitely a difference there with regard to what’s happening and it’s reflected also in what is on the market. On this market so far, there is not one must-have, where everybody says this is the movie that we all need to get.

Looking at last year’s Cannes, one phenomenon was the number of rapid sales announced on the very top big art films in Competition or in Un Certain Regard, which did do robust late business. From what you’ve said about the art-house market now looking for finished, completed films. I wonder if Berlin will benefit too?

I totally think so. That is what is going to happen and it’s pretty much the same we’re seeing in Sundance, which is more U.S.-movie driven. But at Berlin you have movies from all over the world. “Distributors reduce risk substantially buying movies performing well in Berlin or other festivals. There’s going to be a shift from mainstream mid-sized Hollywood movies to more art-house, European-skewing movies.”

Will another factor at work, without which the film industry cannot work, be sheer ptimism? Quite soon at Berlin people will be talking up the films which will be going to Cannes? At January’s UniFrance Rendez-vous in Paris, Wild Bunch presented their French films, of which three or four at least, distributors said, had Cannes written all over them…

Our business is based on optimism. You’re always looking forward to the next season, the next summer… First of all, Cannes, I hear, is going to have an extremely strong competition line-up, though that’s only rumor. Secondly, this year, from a theatrical, exhibition perspective, it’s extremely strong- It’s probably going to be one of the best years in all movie industry history, with huge movie sequels – Bonds, “Star Wars” – plus the local movies in every territory. It’s very hard to be pessimistic in this business, because there are filmmakers all over the world that make fantastic movies and there are movies that perform at the theatres, so I’m not so sure where pessimistic would come in here.

But on a more detailed level of course, one has to separate the good news from what is really happening and what is happening is that there is a really fundamental change – time viewing of content, whether it be feature films or series, is changing our business substantially all over the world. And that really isn’t so much about whether it’s internet-based or how you get it, but the big difference is that people are now able to see whatever they want to see at what time they want to see it and they don’t have to go necessarily to a theatre, especially on a movie that plays well, let’s say in Berlin at the festival. Not all necessarily need Dolby and 10×20 screens. You don’t need the advantage of the big theatre, you can see that at home on your tablet as well if it’s a good movie. So in general I feel very optimistic. But that’s probably because I am a producer, and our business is based on that. Otherwise we wouldn’t be doing this: We would probably be selling bio-chemical products.



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