AFM 2012: Why the Slowdown Is Coming
When Cloud Atlas was introduced to international buyers at the Cannes Film Market in 2011, it was the talk of the Croisette. At $100 million, it was one of the most ambitious independent productions ever mounted, and it had a pedigreed cast led by Tom Hanks and Halle Berry.
The dreamy epic will likely be the talk of this year’s American Film Market — but for a different reason. The movie stands to underperform badly domestically, meaning it will have to do big business overseas. Otherwise, foreign distributors taking a stake in the film will get burned.
There won’t be any Cloud Atlas at this year’s AFM; and if there were, it might take more convincing on the part of the seller. International sellers and buyers say the miniboom that began in 2011 in the international presales business is over, noting a slowdown in highprofile projects.
The big-budget Dredd 3D, another hot market title, also has been a box-office disappointment, further making buyers nervous about what they invest in. To boot, the top-tier sales companies are having a difficult time nailing down the sort of talent that buyers are seeking. Generally, scripts for new market titles are sent out at least a week before AFM, but this year, sales agents were still trying to furiously close deals on the eve of the event.
Competition is especially fierce for what one film executive calls the “Men in Tights,” a reference to some of today’s most soughtafter younger actors — Ryan Gosling, Joseph Gordon-Levitt, Chris and Liam Hemsworth, Chris Pine, Jeremy Renner and Ryan Reynolds — all of whom are also being wooed by studios for their tentpoles.
While all have appeared in prominent indie titles — Gordon-Levitt’s Looper has been a bonanza for foreign distributors — their reps are becoming choosier.
“These guys are the drivers of action movies and thrillers, but what young actor isn’t in a studio superhero movie? The actors are all afraid of making the wrong decision and picking the wrong project,” one executive says.
Buyers around the world have become extremely risk-averse. The decline of revenue from DVD and TV licensing has put increasing pressure on films to perform theatrically, so buyers are loath to bet on anything without a built-in audience. Projects that tick all the boxes are hot; anything outside the box is not.
And before investing in a film, buyers want assurances that the attached cast is actually available and won’t be tied up making other movies. It’s not uncommon to see an actor with two projects at a market, reflecting the diminishing pool of names to pluck from.
“There is an incredible amount of rigor involved in chasing down these projects. You have to know you can build the talent. That’s the fight,” says Sierra/Affinity president and CEO Nick Meyer, who was among the agents still trying to close deals as AFM drew near.
There’s also a proliferation of new sales companies, creating more of a dogfight for the plum projects. These outfits include David Garrett’s Mister Smith Entertainment, a joint venture with German production and distribution giant Constantin, and Will Clarke’s Altitude Film Entertainment.
Mister Smith’s new offering at AFM is Imagine, starring Al Pacino, Jeremy Renner and Julianne Moore. Moore has another project at AFM, Non-Stop, in which she stars opposite Liam Neeson.
“Distributors only want things that look like slam-dunk theatrical movies with a clear target demographic,” Garrett said. “You have to hit one of the sweet spots — either the teen sweet spot, a la Twilight and The Hunger Games; the graying audience for films like The Best Exotic Marigold Hotel; or the filmmaker-driven audience, which can be very auteur — see Beasts of the Southern Wild, or cool, like Nicolas Winding Refn’s Drive or Steve McQueen’s films.”
Genre titles — action, thrillers, fantasy and sci-fi — also are in demand, provided they come with A-list cast in tow. Older actors who continue to be a huge draw include Neeson, Jason Statham, Sylvester Stallone, Arnold Schwarzenegger and Bruce Willis.
Focus Features International co-president Alison Thompson, for one, isn’t concerned about the slowdown. “It could actually be a good thing for the business because the sheer volume of movies that has been in the market made life very challenging,” she says.
Another international executive adds, “We’re turning down movies because our customers don’t want or need those fringe titles anymore.”
There’s also the matter of the Eurozone. Box-office returns in the territories hardest hit by the Euro crisis — Greece, Ireland, Portugal and now Italy and Spain — have slumped, while even buyers in healthier territories such as Germany and France have become more cautious.
“There is a downward curve in Europe, and the crisis is affecting prices, both on the TV side and the theatrical side. It’s survival of the fittest,” says Garrett.
Mister Smith has a major focus in the Eurozone, representing DreamWorks titles for Europe, the Middle East and Northern Africa. “We aren’t getting the sort of advances we used to,” Garrett adds. “It means, in the end, we have to look at the cost of production and find some way to bring that down, or find new sources of financing.”
Outside of Western Europe, things aren’t so bleak. Emerging territories, including the Middle East, Russia, Brazil and, especially, China, are booming and hungry for product. However, China still does only limited presale business.
“We know that some markets are ‘devastated,’ but emerging ones make up for it,” says Charlotte Boucon, head of international sales at France’s SND.
For indies with solid global distribution networks — think Summit/ Lionsgate or The Weinstein Co. — it is still, mostly, business as usual. European and Asian giants with easy access to regional equity or soft money — France’s StudioCanal, uMedia in Belgium, Germany’s Constantin or Media Asia films out of Hong Kong — are increasingly moving into midbudget genre features that were once studio staples.
Cloud Atlas producer Stefan Arndt is hopeful that his film will serve as a new producing paradigm. In exchange for paying a lower minimum guarantee, foreign distributors have an actual equity stake in the film so that they benefit from the movie’s worldwide performance.
Producer Martin Moszkowicz, head of film and television at Constantin, also remains upbeat, saying there is still plenty of room at the global box office for independently financed titles that begin their journey at film markets.
But others believe that buyers will grow even more picky and shy away from riskier, big-budget projects (the same goes for film financiers).
“I imagined that we’d see a slowdown in 2009 and 2010, but it was the opposite,” says one veteran international film executive. “There were so many private individuals willing to invest in films. This year in Toronto, when there were 350 films at the festival. That was the day of reckoning.”