Dialogue: Jonathan Wolf
The executive vp of the Independent Film & Television Alliance shares his insight into the upcoming market.The Hollywood Reporter: What impact has the explosion in indigenous filmmaking had on the AFM?
Jonathan Wolf: It clearly has brought in more sales companies, more films and more screenings. I can't get a good read of whether more projects are being offered in presale; I get a sense that hasn't changed dramatically, but there are more finished films.
THR: Why is that? You'd think if there were more production, there'd be more presales.
Wolf: The business model of those outside the English-speaking world is different and their economics are different. Their costs are lower. They have more cultural funds available to them, and they frequently have some types of guaranteed distribution -- a guaranteed TV or cable or theatrical deal -- so they don't need to do presales. By the time the film is finished, it is common to have 60%-90% of its budget covered in its country. The American-Canadian-U.K. business model of getting 30% from North America and 70% from the rest of the world is almost turned on its head when you look at countries in South America or Asia. That means that they can come to the AFM (after the film is finished), and instead of looking to do 30 deals, they may have a very successful market in closing just half a dozen.
THR: Why do they need to come to the market at all? Why does anyone need to come in this age of instant global communication?
Wolf: Face-to-face marketing, which is really what trade shows are about, has been around since the beginning of time. When a producer is selling a film -- especially one that hasn't been shot yet -- and needs to convey the vision of the director, this is best done face-to-face. And, of course, when it comes to finished films, the seller wants to be sure that they are seen in the best light possible.
THR: Does AFM now have the screening facilities to make that possible?
Wolf: We have 21 commercial theaters, which in terms of the size of their screens and the number of seats is much more than are available in Cannes or the European Film Market (in Berlin), and we have also built five digital screening rooms. Then, for some older films, we have five more video screening rooms.
THR: Has the type of product changed much over the years?
Wolf: You have to step back and look at long-term trends. Year-to-year, tastes vary widely, but in the long-term, we have seen budgets move either higher to attract the talent -- or other hooks that are necessary for wide theatrical release in most countries -- or lower, so that a high-risk art film or a direct-to-DVD film has a more limited economic risk.
THR: What about the economics behind these films. How has that changed for the independents?
Wolf: Just as you have seen more competition from indigenous product, you've seen more competition from the vertically integrated media giants. The marketplace has become tougher and that has pushed the independents into finding ways to control costs, whether through shooting in countries that offer various subsidies or tax programs or by transferring risk to investors -- hedge funds or individuals looking to align themselves in the industry -- or by seeking the best deals they can with talent and crew. There is pressure on revenue and that works its way downstream and creates pressure on budgets.
THR: Is the American independents' share growing?
Wolf: I don't think so. They are being squeezed at two levels: By the increasing production from the media conglomerates and then by indigenous product around the world and the access to TV deals that both of those groups have. Indigenous product is almost guaranteed a television release in its home country and that has created a squeeze in the international TV arena for the American independents.