The Business Journal of Film, TV Broadcasting, Broadband, Production, Distribution
Film Market Facing The Hard Biz Facts
Inevitably, at the end of every American Film Market (AFM) the outcome comes down to numbers and figures and dollars and cents. This 31st edition was not an exception: 427 films screened from most of the 330 exhibitors –– if one eliminates banks, financial companies and trade publications among the companies –– with suites.
The “super” Starz girls at the AFM
(l.to.r.: Kristen Stanisz, Cynthia Burnett, Alisha Serold, Amy Beerup)
Naturally, a good number of smaller distributors participated without exhibiting, simply hanging around the lobby of the Loews Hotel in Santa Monica, the market headquarters, where no registration badge was required. Companies could also register as “Exhibitor without office,” for $3,500, which included four badges that allowed executives access to all floors.
The number of buyers reached 1,417 and the market organizer, the Los Angeles-based Independent Film & Television Alliance (IFTA), was keen to publicize its survey that more than 20 percent of buying companies at the AFM didn’t go to the Cannes Film Festival. Buyers were required to pay for their badges, which cost about $500 each, compared to $800 for the seller’s badge.
But, even though the trade event was billed as a theatrical market, television sales (especially for the digital channels) and the VoD window followed by DVD sales dominated the film market business, with theatrical sales a distant third.
The Roma Cinema Fest (RCF) in Rome, Italy, ended November 5, and continued to have a negative impact on the AFM as far as Italian distribution companies were concerned. With the advent of the RCF, now in its fifth year, the number of Italian companies exhibiting at the AFM has been reduced to one. However, some Italian buyers still patronized the Santa Monica market.
Reportedly, the U.S. Embassy in Rome called the Italian Trade Commission to encourage the Italian buyers to participate at the AFM. A mini-controversy erupted when a “rumor” was circulated at the RCF that many French buyers would not be at the AFM. This rumor was, in part, confirmed by a Screen International article indicating that “Several French sales companies under the Unifrance umbrella” were not working out of the Loews, but at the nearby Hamilton Galleries. However, AFM managing director Jonathan Wolf dismissed the controversy by providing VideoAge with the list of pre-registered French buyers that listed 28 companies with 66 buyers.
Another problem was that there were very little independent product around, with most good titles coming from the so-called mini-majors, which tend to pre-sell movies. But, the fact that the pre-sale market has slowed down has somewhat helped the AFM. Among the indie product there was the distributors’ “bread ‘n butter:” movies in the $1.5 million rage very popular with the U.S. cable TV networks, that travel well internationally (but not in Canada, if not made with several Canadian components).
In addition, most indie product was made up of DVD titles for a sector that, unfortunately, is in crisis. The VoD market was certainly active, especially with the 50-50 revenue share business model, often without advances. This is something that troubled distributors because it indicates that the TV outlet will not pay sufficient attention (i.e., give a good position on the schedule) to the product. Asking for VoD rights were not only DVD companies, but also free-to-air TV outlets, which prompted an exhibitor to comment, “It’s becoming complicated.”
AFM organizers did a good job of trying to match buyers and sellers, especially with their “Breakfast Initiative,” consisting of morning gatherings for buyers with IFTA’s member sellers, which spanned five days. This in addition to a buyers-sellers online social network service called “MyAFM.”
This is because AFM is a market where most buyers do not pre-schedule meetings any longer, favoring instead walk-ins in order to be more flexible with the general screenings (which are held at various theaters scattered throughout the beach town). The AFM utilized 21 commercial screens, of which eight were digital. Of these, four screens were equipped for 3D and a reported 21 movies were in the 3D format. Screenings were only available to exhibitors and fees for each screening ranged from $215 for video, $1,080 for 35 mm film, $2,240 for 2K digital or 3D.
The conference part of the eight-day market that started November 3 included seminars that examined film financing, social media, distribution, piracy and marketing, for a total of 12 sessions held at Le Merigot Hotel and Fairmont Miramar Hotel, with each priced at $40 to $95.
The Hong Kong film industry took the spotlight on November 4 with a Hong Kong Day, which included a seminar, screenings of six films and a cocktail reception.
In terms of the outlook for the event, being a pure trade market, the AFM doesn’t have a real competitor, since other film events are mainly festivals with a business component. However, the AFM strongly competes against its calendar date, which falls right at the end of budget cycles, when money becomes scarce and, if buyers spot a good movie, they are forced to ask for an “extra budget.” In addition, the AFM also competes with television markets such as MIPCOM, which precedes the AFM and is increasingly becoming an all-encompassing entertainment trade show, and the ups and downs of television windows with what always seems to end up as a zero sum game.
In terms of efficiency, with 330 sellers and over 660 buying companies, the market’s seller-to-buyer ratio is considered good. Another positive is the cost efficiency factor, with rates for exhibition suites starting at $5,825, plus a $3,500 exhibition fee (for non-IFTA members) for the less desirable rooms.
A suite on the more trafficked floors such as the ones above the fourth floor (which is the lobby area) and especially those near the front, by the stairs and elevators, can go for as much as $18,000 per room for IFTA members (affiliate members pay annual dues of $4,000) and much higher for non members. This means that an exhibitor can recoup market costs by selling one film to a “good-sized territory.” In comparison to other film-TV markets outside the U.S., the AFM is considered a relatively inexpensive market, even including hotel accommodations, especially for overseas participants who can take advantage of the low dollar exchange rate.
And this is one aspect that primarily redeems the AFM: an affordable, low-risk market and an enviable U.S. location for participants. In addition, it is a good source of revenue for IFTA, which is estimated to be netting over $2 million from the proceeds (or about 20 percent of total revenues): A sum sufficient for not trying to fiddle with such things as changing the AFM to a spring date, which could be beneficial to the exhibitors, but risky for the organizer.
In 2011, AFM dates are set for November 2-9.
Rome Film Fest Doesn’t Feast on Biz
The Roma Cinema Fest (RCF) opened its fifth edition in Rome, Italy on October 28, under surreal circumstances. Some 1,500 Italian film industry people took over the red carpet to demonstrate against the Italian government’s cut in film subsidies. The fact that it was staged on the opening night of a film festival that was a pure political creation, financed with local government money, rendered the whole situation surreal.
The Italian film industry is also a political creation, supported with state money, which assures that producers make money even before the films are released. Few incentives go toward exports and producers are mostly not interested in foreign sales, as their absence at the AFM clearly demonstrated.
The RCF was created by politicians from the left with the clear intention of harming the more established, but right-leaning Venice Film Festival. However, it hasn’t been able to develop a successful business side or to attract significant international film buyers.
The so-called “business” aspect of the RCF revolved around three hotels: the Bernini Bristol, which headquartered the event, the Majestic and the Marriott Flora, which housed approximately 10 seminars/workshops, including a seminar organized by Variety on Film Journalism in the Digital World and a forum on Strategy and Finance for Cinema organized by Media Consulting Group.
Indeed, RCF’s “Business Street” was just a room with a scenic terrace on the eighth floor of the Bernini Bristol hotel with several tables where unidentified sellers hoped to meet some unidentified buyers.
Even though participants conversed in English and other foreign lingo, Italian was the dominant language, indicating that business contacts were made mostly among Italian companies –– which are overwhelmingly located in Rome. According to official figures, there were 309 buyers, of which 187 were foreign and 122 Italian. A total of 67 film distribution companies “exhibited” at the event. Officially, some “792 accredited participants,” took part in the “Business Street,” but the only aspect that resembled a market was the controlled circulation of a few trade publications, consisting of: VideoAge, Cinema&Video, Les Film Francais and Screen International.
The RCF’s “Business Street” also operated under the unrealistic premise of theatrical business, thus ignoring the fact that such titles are sold even before the films are completed, and the competitive component of the Festival does not expose “rough theatrical gems,” like TIFF and the Sundance Festival do. The “Street” closed on November 1, while the competition ended in a different section of Rome with the assignments of the Marc’Aurelio and other awards on November 5.