Waiting For The Dough

"Commute, N Judah" courtesy of Heather

I decided not to attend the Cannes Film Festival back in May because of the dismal economy and what I expected to be a poor showing there. I learned things were even worse than expected when my colleagues in distribution reported from the near-empty beaches of the Cote d’Azur that the bottom had fallen out of the pre-sales market.

The Toronto Film Festival was supposed to be different. Four months after Cannes, with the banks flush with TARP funds and individual investors reportedly swapping oil and gas investments for classic cars, surely an uptick in motion picture finance had to be right around the corner.

I thought that Toronto would present a sea change in the degrading economics of the business; that the credit markets would thaw; and the cash equity of retired Silicon Valley and Wall Street insiders, the Chinese, the Indians and institutional investors would make the trek up to Canada in droves.

But Toronto felt like a bad dream about a big party that everyone attends but the host forgets to cater. People took meetings, did lunch, partied, went to screenings and generally did the things one does at a film market except buying, selling and investing in films. All of the elements for a successful market were there except cash. The money, it turned out, stayed at home.

Looking back at it now, I was overly optimisitic but hardly alone in my rosey outlook.

Yes, there were well-publicized exceptions to the lack of a market at the market. However, to the rank and file independent producer, the prospects remained bleak. Although the independent film business has been subject to business cycles in the past, many I spoke with in Toronto believe that business won’t bounce back to pre-recession levels.

The Internet is the double edged sword at play in any recovery. On the one hand, the Internet provides new sources of distribution revenues through streaming and digital downloads. On the other hand, the Internet’s ability to stream content is eroding traditional exploitation windows and risks shortening the profitability period for the typical commercial motion picture.

Still, the credit markets continue to thaw, albeit slower than many anticipated. New distribution models are rapidly evolving and with it, new deal points in the licensing of distribution rights.

And . . . the American Film Market is less than two months away. Maybe, just maybe then, producers will finally be able to get the money shot that they’ve been waiting for.

  • rogergoff

    Unfortunately, Peter, I don't think much will change by AFM — at least not for the better. If anything, it appears that the purse strings have been drawn even tighter since Toronto. However, AFM is certainly a different type of market than Toronto. It is a lot of smaller films looking for smaller deals, and there should be some activity at that end of the market. They have to put something on the screens and inexpensive content is the name of the game right now.

    I actually think the current environment is putting efficient filmmaking and good storytelling at a premium. No one (except Michael Bay) gets to throw $150 million of special effects at the screen to see what happens. That means they actually might have to make an engaging film that relies on a good script, good acting and a solid marketing campaign. None of that bothers me.

  • JoyKecken

    Peter, it was great meeting you at the DGA meeting last night. I was so inspired by your talk that I went to Insomnia and wrote till 1am. Love the blog. Countdown to 18 months. See you at AFM!

  • Sorry for the delay in responding. I enjoyed speaking with you as well. Great to hear you were inspired.

  • Sorry for the delay in responding. I enjoyed speaking with you as well. Great to hear you were inspired.