Berlin was buoyant. Surprisingly so. Netflix’s splash for The Good Nurse and Searchlight’s deal for Perfect were among the biggest deals the EFM had ever seen. Things were looking up ah…
In a sign of collaboration between the agencies, that particular package is being sold by ICM and Endeavor Content. Conversations are going on almost daily between the leading packagers at different agencies, something that almost never happened before.
They know that buyers are hungry. MGM and Netflix are on a tear. Amazon will want to get in on the mix. Indie buyers like Leonine are establishing themselves. Apple and Hulu have come to the table in a significant way and other financiers are emerging. As for Marché screenings, they will be staggered, explains Paillard. “Every screening will be on local time, meaning Australians will see a film before Americans, for example. We will try to do Asian events in the morning and ones which are more US-oriented in the afternoon . It will be hard to organize events between Asia and the U.S. It was a choice we’ve had to make and after talking to sales companies we thought it was better to give the buyers as good an experience as possible.” One of the main challenges for the Marché is that it doesn’t have the fallback of the festival. Dozens of projects that would have launched in the Official Selection and generated deals in the market are now no longer getting visible premieres to build buzz. Last year, some of the festival gems that generated big deals included Oscar-nomineeMany arthouse stalwarts we spoke to have said they will avoid launching any arthouse movies at all until a festival context returns, whether that be later this year or next. In case it wasn’t already clear, the coronavirus crisis has only reinforced how essential festivals are to the lifeblood of independent cinema. “We were thinking about announcing a foreign language movie with a good director,” says a leading European seller. “But attracting attention in this environment is harder. Distributors don’t have the same pressure to buy. Unless the people I’ve spoken to are lying to me, I don’t expect many European arthouse sellers to launch new movies. There will be a focus on older, known titles. It’s going to be a hard couple of years with all the shuffling in the calendar.” “We won’t show anything that needs a festival launch,” another European stalwart told us. “We’ll stick to our more commercial and English-language titles. We’ll hold back our arthouse films for later this year.” In a bid to help counter this added challenge for the arthouse sector, Cannes will reveal labels which can be applied to its would-be selections in coming weeks. “This could be a tremendous help for those movies,” says Paillard. Inevitably, a large part of the buzz is taken out of a market if its adjoining festival is removed and face-to-face meetings aren’t possible.One prestige American buyer, who will operate across both the presentations market and the Marché, told us, “There’s nothing like launching a film in the festival as a way to focus attention. The market is a smaller part of what we do. The networking at the festival is so important. It’s a cauldron in which you can get a sense of market intelligence.” Can we expect the all-night deal-making we so often see at Sundance and occasionally in Cannes? That’s perhaps a little less likely without the heat of the festival and everyone in one place. That said, with so many different time zones in play, communication could be non-stop. “We’ll do screenings in the morning and deal-making in the evening,” one major European buyer told us. “We have American shareholders so we don’t sleep anyway. I’ve reserved from noon until midnight so I hope that’s enough time. For safety, we will have people in both markets. We want to be across both. There are a lot of projects around. I think it will be a good market; an interesting market.” We canvassed industry far and wide for this piece. The majority of those we spoke to will take part next month. There is optimism about getting back to work in a meaningful way. About forward progress after so much stasis. A few companies e spoke to told is they will be connecting with their buyers outside of these market structures. One was a leading seller from Asia. “I don’t think these virtual markets would work for us because of the time difference,” they said. “We need a physical market where buyers and sales agents from the world over can meet in the same place and time zone. During this difficult time, if we feel the need to talk to a buyer from the US or Europe live, we can always schedule a FaceTime or Zoom meeting ourselves. The same goes with virtual market screenings. We prefer to show our films on a big screen and oftentimes we are not even allowed to send out streaming links for films that have not been released. In cases where we have the streaming links and find it useful to let buyers stream them during the time of a virtual market, we can always do it ourselves without the help of the market.”Deal-making in the age of coronavirus will be different. Requests for discounts and extended payment terms are refrains we’ve heard quite a bit during our conversations about deal structures. Gripes about pricing are nothing new, but Coronavirus has altered the landscape. “Major territory buyers are telling us they can’t pay what they usually pay with so much uncertainty,” one major U.S. company tells us. “They’re asking us what our methodology is when we are submitting sales numbers. Coming to those estimates is more complicated now because each territory is at a different stage of their coronavirus experience. And equity against the U.S. is contingent on movies performing a certain way at the box office.”“We’re all wondering how and when people will go back to cinemas,” confirms one overseas buyer. “What will sellers base their numbers on? Number of screens, shows, projected number of cinemas that will be open?” They continued, “A big challenge for us is how distributors are going to manage cash flows once the bigger films are ready to be delivered? A lot of international buyers are facing blows on films that are being released straight to VOD in the U.S. when the VOD business in the rest of the world doesn’t match the business generated in the States.” “Every local distributor is trying to offload films to streamers at the moment,” adds a sales vet. We know of multiple buyers who are refusing to take delivery of major movies because they don’t know when they will be able to exploit them. “There are so many new variables due to coronavirus,” says one veteran financier. “Will independent films be harder to finance? Netflix, for example, will have the money to get things made and crews are going to choose the safer, more secure production. There will be the cost of testing to factor in and extra costs associated with making sure a set is safe. Does a production have access to a physical studio where it can shoot? “Then there’s the question of bonding and talent deals. Bond companies being asked to insure A-list talent amid a pandemic are much less likely to do so. That’s an essential element of any deal. Meanwhile, talent isn’t going to take a haircut because of coronavirus. “I think we’ll run into issues on certain movies in terms of insuring actors and we’ll run into issues on force majeure language. Distributors are already sending us different clauses. The language says that if delivery dates aren’t met because of a pandemic then they can get out of a contract. What was once hard has become even harder. International distributors want to pay less, production costs go up and there’s lack of clarity around domestic box office. Everyone is trying to make lower budget movies and flip them to the streamers. Even the studios. Kill fees in the contracts are becoming more frequent.” What of talent? “Talent is really leaning into reading and attaching to things they’re passionate about,” says one packaging vet. “It’s a good time for them to develop content. There will inevitably be hurdles to think about in terms of travel, immigration, visas and where things can shoot.” Despite the above, there will be plenty for buyers to sink their teeth into, one financier tells me. “There will be a sweet spot for foreign distributors: local content remains strong and genre movies in the 10-20 million dollar range. American dramas will be challenged. But they have been for two years now.”Many people are wondering whether Zoom meetings and online festivals and markets will become the norm. The film business relies and thrives on personal rapport and chemistry. It’s a people industry. “People will be excited to come back to the Croisette next year,” says Paillard. “But next year we’ll do a hybrid market, with the possibility for those who can’t attend to take part online from wherever they are. That’s also useful in terms of environmental considerations. It could be a new way to work.” The agencies are ready for that new way of working and acknowledge that their template could potentially be adopted for AFM. “Nothing replaces physical contact,” one packager said. “But if Europeans and Asians, for example, can’t travel to AFM in November, we’re going to have to figure out a way to sell movies.” The independent sector has pulled together since Berlin to make sure that can happen. Coronavirus has brought new concerns and challenges to the sales and distribution market but deals will get done next month. Major deals. What’s most important for many, is that there will be a market. “We all get to go back to work, it’s exciting,” one veteran financier said.
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