Dialogue: Jonathan Wolf
The Hollywood Reporter: How is this year's AFM shaping up?
Jonathan Wolf: It is terrific in terms of growth. We are adding yet another floor to Le Merigot, the hotel next door (to Loews Santa Monica Beach Hotel). We have 21?2 floors of office space there, as well as all of Loews, and we will be sold out in all of them.
THR: What's driving the growth?
Wolf: Primarily, we are seeing more non-English(-language) films being produced that can travel successfully. This is the end of a long process. In the late '70s, television around the world was limited to two or three networks in each country, mainly government-controlled. From the mid-'70s to the mid-'90s, television was deregulated throughout the world, and that and new technology created hundreds of new channels. What developed was a television industry in most countries that initially produced sports, news, reality, then novelas and such. But in many countries that 30 years ago had no film industry, now you have experienced directors and crews with all of the key skills necessary to make film, and it is a natural progression for them to move into longform. So, today, we are seeing them make films that are not poor-quality product, but films that can actually travel. For instance, the product coming out of South Korea is very well-received, and we had a seller last year from Vietnam whose films were well-received.
THR: How does the influx of foreign films affect the economics of the industry?
Wolf: We have to break the industry into two parts. There is the U.S./U.K. business model -- using a cost structure that is similar in both countries -- where they know that North America is going to provide 35% or 40% of the movie's revenue, and they know that they need to sell the film in 50 or 60 countries to be profitable. Then there is the model in most non-English-language countries, where you see two stark differences: The cost structure is completely different -- in most places, $3 million or $4 million is a huge picture -- and the producers can derive the lion's share of production costs from their own country. So they are coming to AFM and Cannes with a film that has been thoroughly paid for in-country and are happy to do six or seven deals and price those deals accordingly, which is significant.
THR: Will we reach a tipping point where U.S. product is no longer dominant?
Wolf: It isn't going to happen in the next handful of years. Still, if you look back, there weren't many (indigenous) film industries, and now we are seeing sellers from 35 countries.
THR: Will these foreign sellers -- especially in Asia -- eventually say: "Why come all the way to Los Angeles for an American film market? Why not create our own?"
Wolf: The American Film Market is not about American films; we have always been an international marketplace. Last year, only 62% of the films we screened were English-language. This is a market that takes place in America but is absolutely not about American film. But it's true that other markets are growing: The Hong Kong Filmart, in the third week of March, is doing a terrific job of positioning itself as a premier market in Asia.
THR: With markets such as Hong Kong and Berlin doing as well as they have, do you think AFM and Cannes will continue to dominate the business?
Wolf: I believe what will evolve over the next couple of years is that Cannes and AFM will be must-attend events, and the other markets will be attended if the product warrants it.
THR: You mentioned the growth in foreign product, but you also have seen a huge increase in the number of producers attending the market.
Wolf: True. We sell two types of badges, one for buyers and one that we call the "industry badge" for the industry at large. Over the last six years, our buyers have gone up 10% or 15%, and our industry badge has gone up more than 300%. AFM in its first 20 years was all about import and export, and we have repositioned it to build a bigger tent and make it more relevant to those involved in production.