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Last month marked one year since much of Europe and the U.S. was plunged into pandemic lockdown. The independent film sector — which revolves around and depends on annual festivals and markets — appeared to be particularly exposed. When SXSW was pulled in March 2020, other festivals followed. Both sellers and buyers faced a predicament: Producers and financiers wanted to see their projects debut and find fitting homes while distributors needed content to fill their slates and pipelines. By late spring, it became clear that Cannes would not be happening, and that something needed to be done to address this huge gap.
The indie film groups at top talent agencies, along with several prominent foreign sales agents, conceived of a solution. Led by CAA’s Media Finance Group, a consortium of industry leaders created the first-ever entirely virtual film market – Cannes Virtual Market 2020 – which ran from June 22 to June 28, 2020. Other virtual markets followed suit. Now, as the entertainment industry looks ahead to a new cycle of virtual film festivals and markets, what’s been learned over the past year, and what may be next?
First, producers themselves have warmed to the virtual format. Virtual Cannes saw splashy sales of Will Smith and Antoine Fuqua’s Emancipation (Apple) and James Gray’s star-studded Armageddon Time (Focus) while Virtual Toronto sales were headlined by Mark Wahlberg starrer Good Joe Bell (Solstice Studios) and Halle Berry-directed Bruised (Netflix).
Film markets, which (unlike festivals) revolve around selling films at the package stage, have traditionally relied heavily on launching exciting projects and packages with buzz-generating presentations. Given the new virtual format, there was initially some concern among filmmakers, producers, and foreign sales agents taking their projects to market. However, many creatives found that the ability to prepare an exciting video instead of the traditional presentation format was actually a positive change. (In the past, sales agents have often relied on somewhat formulaic presentations, resulting in an impersonal and standardized sales approach.)
Meanwhile, the buyers at these events are changing. Because the future of traditional theatrical exhibition remains uncertain amid the pandemic, traditional theatrical buyers have been less active than usual at the virtual markets and festivals. In fact, buyers whose business is entirely predicated upon theatrical release, such as A24, have had to push their entire slates to late 2021. On the other end of the spectrum are streamers, like Netflix, which are incredibly hungry for content, have zero reliance on theatrical release, and have therefore been highly active in trying to fill their pipelines with quality content. Buyers like IFC, whose business is almost entirely day-and-date, have also been very active, practically stockpiling films.
Many foreign sales agents are now doing a lot more business in the off-market periods. In the past, markets have traditionally been the big moments where foreign sales agents would launch sales, and there has always been a certain prestige associated with launching a hot project at a market. However, driven by general economic uncertainty, many producers are looking to find distribution partners at earlier stages in the development and production process. This, coupled with increased demand from TV buyers and distributors, has led to an increasing amount of business being transacted outside the festival and market framework.
There are, of course, drawbacks to the virtual events. The absence of in-person festivals and audience screenings poses a problem for niche films that rely on word of mouth and audience reactions to break out, find traction with buyers, and secure lucrative distribution deals. And there have been plenty of projects that have been unable to find financial backing or distributors without the organic connections that we are accustomed to making at festivals and markets. While a virtual format cannot replace the full experience of a film festival in the long-term, there are certainly learnings that can be incorporated into future events.
Meri Khananashvili is a principal at Atwater Capital, a media and entertainment industry investment firm. Prior to joining Atwater, Meri was a business affairs executive in the Media Finance Group at Creative Artists Agency (CAA).
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