Cannes feels the big chill
Again, Americans don't step up at marketCANNES -- As the festival winds down, no U.S. distributor has made a major acquisition. The tepid Cannes market continued what's been a dismal cycle for the finished-film market that began last year in Toronto.
Theatrical grosses have dropped, there's been a glut of product, and then came the closing of Warners' specialty divisions. The result, insiders say, is because specialty divisions can afford only so many costly in-house productions, there will be fewer overall indie releases during the coming year.
For the sellers, producers and filmmakers who rely on fests and had been enjoying the boom that preceded the current bust, it will mean adjusting both expectations and strategies at future fests.
Here at Cannes, signs of the soft market couldn't be ignored. Miramax made a big splash last year with its $3 million, North American purchase of "The Diving Bell and the Butterfly," but has made only one fest purchase since, the Cannes opener "Blindness," pre-buying U.S. rights at Toronto. Last year, studios drove bidding on James Gray's "We Own the Night" up to $11.5 million, but this year buyers circled Gray's "Two Lovers" warily.
Even the more commercially oriented Cannes market failed to seduce buyers, who took a wait-and-see attitude toward movies like Richard Linklater's "Me and Orson Welles" and Darren Aronofsky's "The Wrestler."
The companies that have opened their wallets since Toronto were the new, product-hungry mini-majors like Overture and companies that tend to get active in buyers' markets, like Sony Pictures Classics (which went on an unusual buying spree at Sundance when traditionally bigger gamblers like the Weinstein Co. failed to raise prices).
Here at Cannes, smaller outfits like Liberation, First Look and IFC picked up the slack. IFC took at least six Cannes titles, which will help fill its large VOD pipeline.
Larger companies just seemed gun-shy about pulling the trigger. "People are just shell-shocked from the absence of New Line, Picturehouse and Warner Independent, so they're very cautious," said Myriad Pictures' Kirk D'Amico.
But this caution was not just reactive. Companies also stayed out of the acquisitions game as a way of reducing their backlog of upcoming titles. Fox Searchlight has reduced acquisitions -- it bought only one film at the three fests combined -- as a way of limiting its exposure and risk. Paramount Vantage is continuing to up its production level and reduce its fest buys -- which means that it will have fewer movies, but will face higher risk/reward rations on each.
Distribs are also concerned that audiences are steering clear of downer films. "We took a gamble and bought the Atom Egoyan film before the festival, but while there are some good films, they're very specific art films, and we haven't found one or two we feel strong enough to buy at this point," SPC's Dylan Leine said.
European sellers are not necessarily sympathetic to American fears over less easily marketable product. "The Americans are lazy, they're arrogant and too scared to do any deals," said one European sales exec. "I tell them: get some balls -- your companies are all going down the toilet, maybe now's the time to get some films before it all collapses"
But even though Cannes failed to pop, acquisition-oriented companies like SPC will still need films. "We're going to look hard next week for sales prices (to come down)," Leiner added. "I think you'll see a lot more buying in the summer."
Among sellers, the word is new strategies are needed to jump-start the market. Films will need be approaching completion before they are presented to buyers. "Buyers perceive that it's a buyers' market and they don't have to buy off footage; they can wait for the whole film," WMI's Cassian Elwes said.
Specialty divisions are also looking for higher-profile projects -- which could mean a tilt away from smaller passion projects. That's the tack CAA and Endeavor are taking with the Jim Carrey comedy "I Love You Philip Morris" and WMI is doing with the $30 million "Islands in the Stream," starring Tommy Lee Jones.
Still, hopes for a rebound spring eternal. "People are going to realize they need product, so the second someone makes a move the market is going to go nutty," one seller said. "Don't be surprised if it happens at Toronto."
Then again, some people said that about Cannes.