Financial crisis doesn't keep Euros from AFM

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COLOGNE, Germany -- The cloud of the global financial collapse is certain to hang over this year's American Film Market as conversations in Santa Monica inevitably turn to shrinking budgets and tightening credit for indie producers.

But the Europeans heading to AFM are mostly upbeat. MIPCOM proved a stronger market than most expected, given the gloomy state of the world economy and attendance is expected to meet, or beat, last year's, with close to 500 European execs expected to make the flight.

Even countries hard hit by the economic downturn, like Spain or the U.K., are not scaling back just yet.

"As of right now, the crisis hasn't affected the audiovisual industry," says Pedro Perez, president of the Spanish Producers Federation FAPAE. "As a matter of fact, the figures indicate that consumption of TV and movies is rising."

Spanish sellers aren't the only ones counting on the supposed recession-proof nature of the film industry. If MIPCOM was any indication of the general climate, buyers may be tightening budgets but they are still buying.

"I don't think we'll see an effect on sales volume (from the financial crisis)" says Thierry Desmichelle, CEO of French giant SND/M6 International. "But I think prices will definitely be affected."

"In the end people need product, whatever the state of the economy," adds Susan Wendt of Scandi sales giant TrustNordisk. "The main problem at AFM is not sales per se, but getting noticed, being able to generate hype for your films."

To create that elusive market buzz, TrustNordisk has opted for a strategy of focusing on fewer, more genre-leaning titles for AFM. They will be premiering the Norwegian horror title "Cold Prey 2," which smashed local box office records in its release earlier this year, as well as fast-paced Danish political thriller "The Candidate."

"AFM is much more genre focused than the Berlin or Cannes markets, which have much closer ties to a film festival," Wendt says. "Genre films are the ones that get the attention (in Santa Monica)."

European sellers tend to agree. AFM premieres out of Europe tend to slot into the genre column. Germany's Action Image is debuting the high-octane thriller "Fire" featuring "CSI" star Gary Dourdan and German actors Ken Duken and Cosma Hagen. SVENSK Filmindustri is pushing its crusader epic "Arn -- The Knight Templar" starring Stellan Skarsgard. Bavarian Film International is focusing on fantasy title "Krabat" -- a dark Teutonic take on the Harry Potteresque sorcerer's apprentice tale and "Kaifeck Murder," an art house thriller with a supernatural touch.

"AFM is definitely the market for genre films," says Stefanie Zeitler, head of sales at Bavarian Film International. "That's what most of the buyers are looking for when they come there. We keep our more art house titles for the European markets in Berlin and Cannes or for Toronto."

"Non-genre and non-English language product has a tough time at the AFM," adds Wolfgang Wilke of Action Image. "That's why we're getting into the English-language business with 'Fire.' Fewer companies are wanting to make the big bulk deals so you need to have the few stand-out titles that get noticed."

Increasingly, European sales companies are adding English-language titles to their line-up to appeal to American distributors. Examples include TF1 International picking up Spike Lee's war epic "Miracle at St. Anna," and Spain's 6 Sales handling international duties on Sally Potter's "Rage" starring Jude Law and Steve Buscemi.

That isn't to say that Europe has abandoned its art house roots. More cultured fare can still drive sales. This is particularly true of French and British titles, which enjoy a certain cache among U.S. buyers.

"Very 'French' auteur films with strong casts tend to do well at the market," notes Thierry Desmichelle, of SND/M6 International, pointing out that presales have already started on Zabou Breitman's drama "Je l'Aimais" starring Daniel Auteuil and Marie-Josee Croze.

Brit sales group HanWay Films is also counting on the sterling cast of Colin Firth and Catherine Keener to pull in buyers for Michael Winterbottom's latest, "Genova," and will be using the high-end cast of Paul Bettany and Jennifer Connelly in its efforts to drum up pre-sales for Jon Amiel's upcoming Charles Darwin biopic "Creation."

Anna Netrebko and Rolando Villazon are hardly on Hollywood's A List but the opera superstars are also the prime selling point of Robert Dornhelm's "La Boheme," a film version of the famous Puccini opera. Germany's Beta Cinema is bucking the genre trend with a market premiere of "La Boheme" as well as strictly art house titles like "A Woman in Berlin" from Max Faerberboeck ("Aimee and Jaguar") and Nicolai Rhode's "10 Seconds," which chronicles the disintegration of the lives of those left behind after a tragic plane crash.

But European films with a more art house sensibility have traditionally had it hard at the AFM, which is why European Film Promotion this year is launching a new program to screen critically acclaimed European films at the Santa Monica market. The new program will include screenings of six European films that have been selected as candidates for the best foreign-language film Oscar but that do not yet have U.S. distribution deals in place.

The titles include the Dutch immigrant drama "Dunya & Desie," sold by Delphis Films; the Austrian thriller "Revanche" from The Match Factory; Andrzej Jakimowski's critically-acclaimed "Tricks," which M-appeal is selling; Swiss romantic drama "The Friend" from Media Luna Entertainment; Finland's "The Home of Dark Butterflies," from TrustNordisk and Paul Kieffer's cross-culture love story "Arabian Nights" from Insomnia World Sales. The six films will be screened at the AFM on Nov. 7 and 8.

"With this new screening we are focusing attention on some of the best and most exciting filmmaking taking place in Europe today," says EFP President Claudia Landsberger. "Our hope is to position these extraordinary films for maximum exposure during this decisive time period."

2008 will also mark the 10th anniversary of the EFP's umbrella stand in suite 812 of the Loews Hotel. The office, which will provide business services for some 28 companies from 13 European countries, has proved its usefulness for small and mid-sized firms looking to tap into the U.S. market. This year, Poland will be represented for the first time with both the Polish Film Institute and Gremi Film Prods. renting space at the EFP stand.

Marici Karpinski of the Polish Film Institute notes that, as markets in Eastern Europe expand, so too does the interest from local companies in attending the AFM "in the heart of the filmmaking capital of the world."

But the general optimism coming from most European sales companies can't mask some of the major problems facing the indie film industry. Principle among them is the collapse of the DVD market.

"DVD revenue worldwide has really gone down and, so far, that hasn't been replaced by a sufficient boost in VOD revenue," says Susan Wendt of TrustNordisk.

"The AFM has traditionally been a video/DVD-driven market," adds Wolfgang Wilke of Action Image. "With that collapsing, a lot of companies are going to find it harder to make the sales to justify your overhead."

Wilke notes that digital television channels, once hungry for product, are also scaling back.

So far, economic woes haven't made a major dent in the AFM's attendance figures. Market organizers note that both the Loews and Le Merigot locations have sold out for the fifth consecutive year.

And while financial institutions continue to wobble, many European companies point to more hopeful signs. The U.S. indie market appears to have stabilized after the turbulence seen earlier this year and there are signs of growth in several markets -- notably Germany, which has seen the rise of several new indie distributors.

A true picture of the state of the international film business probably won't become clear until after the AFM -- when buyers return to Paris, London and Madrid and add up their deal memos. Only then will firms be able to see if they can ride out this economic storm or if they're likely to go under.

Rebecca Leffler in Paris and Pamela Rolfe in Madrid contributed to this report.
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