Cannes Market Heats Up After Netflix, Apple Strike Big Deals

Tom Cruise, Miles Teller, Jennifer Connelly,

Things were moving so slowly at the Cannes Film Festival that the pace of deals was almost as glacial as the amount of time it takes to get your check at a restaurant in the south of France.

But then, sacré bleu, Netflix struck, shelling out more than $50 million for the rights to “Pain Hustlers,” a conspiracy thriller that unites Emily Blunt with Harry Potter director David Yates, and the move has started to accelerate negotiations up and down the Croisette.

This year’s market has been a litmus test for film sales as the U.S. and key international territories emerge from the worst of the pandemic. Many buyers have hoped for a correction, one that sees prices cool down, with more opportunities for international distributors who are still smarting from eye-watering global streaming buys during the COVID crisis. Domestic consolidation has also thrown up all sorts of questions as to how active streamers might be in Cannes.

But despite Netflix’s choppy quarter, the “Pain Hustlers” pact was a sign that the streaming giant, which has suffered a stock free fall and been forced to enact layoffs and cutbacks, will still spend big when it feels it’s warranted.

“[Netflix’s] content budget is big, for this year and next year,” says Jason Ishikawa, senior executive at Cinetic Media. “Their reaction to the stock market affects a lot of different things, but the reality is, there’s been no signifier that they’ll rapidly scale down. They’re buying.”

In another global deal, Apple also picked up worldwide rights on the Riz Ahmed and Jessie Buckley drama “Fingernails,” which was being sold internationally by FilmNation, with U.S. rights co-repped with CAA Media Finance and WME Independent.

While such deals can sometimes see international distributors bristle — “Why even bother launching [these packages] to indie buyers at the market?” one London-based acquisitions executive complained — Alex Walton, co-head of WME Independent, says the agency would “never come to the market with any predetermined ideas of where something’s going.”

In fact, he says, if there are 100 packages being brought to Cannes, “95% of them are being bought independently” as opposed to being swept up by streamers.

Yet it’s not only the star-driven packages that are drawing attention. Indie stalwarts like IFC and Sony Pictures Classics are nabbing arthouse fare, such as Cristian Mungiu’s “R.M.N.” and Davy Chou’s “Return to Seoul,” respectively, while fresh bidders such as Mubi and Utopia are circling several projects and keeping things interesting. In the past day, IFC struck again, buying “Corsage” starring Vicky Krieps, while Sony Pictures Classics nabbed Mia Hansen-Love’s “One Fine Morning.” Bidding is also heating up for Ruben Östlund’s “Triangle of Sadness” following its uproarious premiere over the weekend. Searchlight, Neon and A24 have been circling the project, but it’s unclear where negotiations stand.

“You have new players and shifting priorities and that results in a lot of healthy competition,” says Arianna Bocco, president of IFC Films.

Bocco and others believe the prices for projects stateside have become more earthbound post-pandemic. That may be a sign that the bubble for content could burst or it could just indicate that buyers aren’t as enthused by what’s on offer. Tom Bernard, the co-founder of Sony Pictures Classics, says the box office for indie movies remains challenged, because older audiences, still wary of COVID, aren’t returning to theaters at the same rate as other demographics. That makes it more critical that distributors find films that have a compelling hook or some topical resonance.

“There aren’t enough movies that resonate with the culture today,” says Bernard. “Things are moving so fast and it’s so politically disruptive and there are so many different issues competing for our attention, that a movie really has to speak to the moment if it’s going to succeed.”

International buyers such as Marc Goldberg, CEO of leading U.K. distributor Signature Entertainment, says there’s never been “such a breadth of strong script material and cast-driven titles for the independent marketplace.” For distributors in a position to “pay a top price for high-quality content,” there’s plenty of movies available.

Yet he also “hasn’t known prices to be so high.”

Gregoire Melin at Kinology, who is handling several hot projects such as “Beast,” a dystopian thriller with George MacKay and Lea Seydoux, said “the market is full of packages, but only a handful are selling here at the market.”

The company is also selling Emmanuel Mouret’s film “Chronique d’une liaison passagere,” which plays at Cannes Premiere, and “Alma Viva” at Critics’ Week.

“With pre-sales, buyers are much more cautious, and need as much material as possible,” said Melin. The sales agent said he closed over 15 territories on “Argonuts,” a Pixar/Dreamworks-style family animated feature made by TAT.

Cecile Gaget at Anton Capital said, “It’s going to take two more weeks to close deals.”

“Buyers are excited about the quantity and quality of projects, but like during the pandemic, it takes longer to close deals because we’re talking to independent distributors and streamers as well as studios,” Gaget said. “It’s a trend which has been intensified during the pandemic. Studios and streamers change content strategies every six months so we need to figure it out. Everything is in flux.”

For international distributors wading through the array of A-list talent-driven packages, the question mark in the lead-up to Cannes was how much content would be available — and at what cost? Would we see another “CODA” scenario in which a movie is plucked away from international buyers when a streaming behemoth like Apple throws down that kind of money? Are the packages even affordable for theatrical distributors coming out of COVID?

“It’s crazy on some things,” remarked one executive from a leading European distributor. “We all sense [sellers are] pushing their luck and asking for too much on things that don’t work upon release. ‘Moonfall’ and ‘The 355’ aren’t forgotten by many.”

AGC Studios boss Stuart Ford, who introduced Roland Emmerich’s sci-fi thriller “Moonfall” to buyers in Cannes in 2019, understands those reservations.

“I think that’s fair,” he says. “‘Moonfall’ coughed and spluttered at the box office because, frankly, it was released in February 2022 at a time when box office both in U.S. and internationally was significantly sleepy. We had a flow of tentpole studio movies and franchise films that have worked, but almost nothing else has worked at a meaningful level.”

Until we’re out of that cycle and it’s not just studio tentpoles that can deliver box office numbers, Ford reckons it’s “totally understandable that the buyers are super nervous to commit to pricing that wouldn’t necessitate the box office performance we were used to in previous years.”

After “Moonfall” was eclipsed at the box office, Ford says he “ultimately fell back on pulling the trigger on a couple of bigger projects” he’d intended to launch in Cannes.

“I just don’t feel they’re that viable right now,” said Ford, whose top priority is Richard Linklater’s “Hitman,” budgeted in the healthy high teens, alongside Anna Kendrick thriller “The Dating Game,” which is also under $20 million. Both have sold well so far due to “realistic pricing,” he says.

But ultimately, says Capstone Global founder Christian Mercuri, who is selling the Jennifer Hudson thriller “Breathe,” it’s virtually impossible to keep prices down due to increases in production costs due to COVID.

“At this point, we don’t have a choice so we’re just trying to work around it and making do with what you have. But certainly, additional costs attributed to productions and a depressed COVID market in Asia doesn’t make for a great combo,” says Mercuri.

Adds Martin Moszkowicz, executive chairman of Constantin Film, Germany’s biggest independent film distributor: “Yes, prices are high, and sellers need to compensate for the China and Russia issues. But there are takers even for overpriced movies — either streamers or desperate distributors.”

Most sellers and buyers seem happy that the deal-making this time is happening in the flesh. A lot is lost when negotiations take place virtually.

“It’s great for us because the conversation can be freewheeling,” says Ishikawa. “We also get to speak more casually about what’s going on in everyone’s world, what’s working and what isn’t. Those conversations are weird to schedule on Zoom.”

Matt Donnelly, Elsa Keslassy and Leo Barraclough contributed to this report.