AFM: Market resets to near normal as buyers look for value and currency worries present (manageable) risk
After the exuberance of the Cannes market in May and the disappointment some experienced in Toronto, this week’s American Film Market is set to settle into a much more familiar lineup.
If “new normal” is one of those phrases that has lost its meaning due to overuse, the AFM this year should be running at something approaching “almost normal”.
“Cannes was an experience for many people. This is the market people come to do business. You can feel it in the way we approach it,” says Jean Prewitt.
“Everyone is always enthusiastic. And for problem areas, they’ll tell you the costs are going up. They don’t know whether or not they can have a theatrical release. But the rules are still the same. You have to have the quality of the content and the talent. And someone will want to buy it. This decision-making is no different.
Big announcements of new products have been relatively rare so far and come late. But that may matter less if the new crop has that year’s inescapable quality – value for money.
“There is probably a lack of premium products on the market. But we’re going back to people being a little more selective, focusing on what they want, focusing on the top three to five projects, and going all out for those,” said Jonathan Deckter, president-COO of Voltage. Pictures.
“Buyers are looking for things that are safe bets. Audience friendly. We stick to our motto, loosely borrowed from Marie Kondo, “does it spark joy?” says Gabrielle Rozing, CEO of Fortissimo Films. “That doesn’t mean a movie has to be light or easy, but it has to come with a message from the heart.”
The hesitant recovery in global theatrical markets and the space occupied in cinemas by Hollywood titles and by local films playing in their home markets means that far fewer independent imported titles are expected to receive the holy grail, a theatrical release. , than previously. .
“From a theatrical standpoint, we’re all trying to figure out what can work and what can’t because we’ve run out of ideas,” said Todd Olsson, president of international sales at Highland Film Group. “These days, it has to be something really unique or an event film that will inspire people to come out of their homes. There is simply too much quality entertainment at your fingertips.
The shadow the streaming giants are casting over the independent film market remains significant – the platforms are mobilizing talent, crews and facilities to create film and TV content for their own walled gardens, and, as deep-pocketed multi-territory buyers, they have the potential to disrupt independent offerings – but that’s no longer new. And many local distributors who previously entered a market with a TV deal in their back pocket instead struck a deal with a streaming partner instead.
In a geographical analysis of the market, Europe, the Middle East and Latin America appear to be the strongest buying regions. Asia-Pacific is uneven and generally weak, with Japan having achieved the most robust theatrical recovery. Prewitt’s market attendance data also shows a surprising increase in attendance from Malaysia.
“Cannes has been the number one physical market since the start of the pandemic, but many buyers ignored it,” said Charlotte Boucon, head of global sales at Orange Studio in France. “So this AFM will be the first full in-person market with our Asian or Latin American buyers that we haven’t seen in a long time.”
Given the degree of uncertainty surrounding import permits and censorship, Chinese companies have essentially stopped buying new movie titles. But then again, few Chinese buyers have been physically able to attend the markets in person this year. And it’s no news that vendors are putting a zero against China in their revenue forecasts.
Russian companies, which had been major buyers in the past, have been largely shut out of the market – whether or not they approve of the war in Ukraine. But a gray market can also exist.
“Whether you are dealing with Russia is definitely a topic of conversation. And one where there will likely be some degree of practical ambivalence,” said one salesperson, speaking on condition of anonymity. Russian finance and transactions could be channeled through other territories such as Cyprus, a financier told Variety. Or even be renamed Ukrainian.
Several market participants pointed to currency movements, including the rapid strengthening of the US dollar against nearly every other currency over the past six months, as a cause for concern. With film contracts generally being denominated in dollars, the purchase of rights has in some cases become 20% more expensive than a year ago. With limited budgets, buyers can choose to buy fewer stocks or negotiate harder on price.
Other sellers worry about the potential for disruption of previously agreed pre-sale deals that have become more expensive between the time of signing and delivery.
“People worried about their currency will be cautious and likely build a hedge into their deals,” said David Garrett of Mister Smith Entertainment.
Currency movements are also affecting production, with weakness against the dollar strengthening the case for filming and post-production outside the United States. But, here too, the potential for rapid change may be limited if foreign studios and labs are already operating at or near full capacity.
At least the strength of the dollar makes frequenting physical markets less attractive.
“It really doesn’t help anyone that all of these markets are so expensive, and AFM is by far the most expensive,” Rozing said. “Especially for Europeans, it’s really expensive to go to Los Angeles. I spend $300 a night at a mid-range hotel.
Elsa Keslassy also contributed to this story.