This year finds the global film industry pretty much back where it started this time in 2021. A surge in COVID-19 infections, driven by the omicron variant, forced both the Sundance Film Festival (Jan. 20-30) and Berlin’s European Film Market (Feb. 10-17) to go all virtual for the second time in a row. Producers, financiers, international distributors, and sales companies, who have seen in-person business dealing put on hold since early 2020, will be stuck with Zoom meetings and virtual presentations for a while yet.
“Personally, it’s disappointing but as we saw more and more buyers canceling or deciding not to travel [ahead of Sundance and Berlin] it made less and less financial sense to be there in person,” notes Andreas Rothbauer of German sales group Picture Tree International. “When the physical market was canceled, it was actually a relief.”
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The impact of another round of online-only festivals and film markets is likely to be more psychological than financial. Sales execs have become accustomed to pitching their films online — the first all-virtual film market was back in Cannes in 2020 — and business, by and large, has been good. But after nearly two years of enforced isolation, the global film industry was counting on an in-person Sundance and Berlin to mentally reboot.
“I think that — more than anything — it has a serious impact on everyone’s morale and mental health,” says David Garrett of Mister Smith Entertainment. “Business goes on but I think we all miss the human contact and it feels like all the oxygen has been sucked out of the room. “
The overall market situation has improved, slightly, compared to January 2021, when price tags for CODA and Summer of Soul surprised Sundance in becoming the latest in a streak of record-breaking deals for that festival. Theaters in most territories have re-opened and audiences have returned, at least for some titles. The global box office for indie films as diverse as Judas and the Black Messiah ($6.8 million), French police drama The Stronghold ($18 million) and Pedro Almodovar’s Spanish melodrama Parallel Mothers ($11 million), while far below pre-pandemic levels, are a sign of hope for the industry as a whole. And production is booming, thanks mainly to increased demand from streaming platforms. “Last spring through the summer we were able to make bigger movies again and they are in the festival this year,” says Deborah McIntosh, co-head of WME Independent.
But sales are one thing, promotion another. While the B2B work of film financing, pre-sales and territory deals can tick along online as well as off, nothing compares to an in-person festival in focusing critical and media attention on a new movie. Netflix leveraged the appeal of last year’s on-location Venice festival to successfully position Jane Campion’s The Power of the Dog, while Warner Bros. used Venice’s in-person fan fever to launch Denis Villeneuve’s Dune to a global $400 million box office. On a smaller scale, the Toronto Festival bow for Kenneth Branagh’s Belfast, where the black-and-white autobiographical drama won TIFF’s coveted audience award, helped Focus Features both in its awards campaign and in its limited release (the film has earned some $7 million to date domestically).
The marked difference between Sundance and Berlin is that the latter is still planning on holding an in-person festival. The first virtual Sundance Film Festival in 2021 boasted the largest-ever audience in the festival’s history, according to organizers, with an estimate of over 600,000 total audience views. That increased accessibility (paired the fact that the halved festival line-up meant far fewer A24, Netflix and other studio titles than years prior) meant that smaller films received outsized press attention. But that attention, many sales reps note, can be a double-edged sword. ICM partner Jessica Lacy offers, “The virtual component allowed for a much wider audience to see the films and comment on them in the midst of our sales process which in some cases elongated and affected the sales process.”
And while Berlin’s pivot-to-online came over a month prior the market’s start, Sundance’s announcement landed only 15 days before, leaving little time for alternate arrangements. Some Sundance veterans bemoaned a lack of communication with industry partners and filmmakers, with several noting that there was little indication that programmers were seriously considering a digital alternative up until hours before the Jan. 5 announcement.
On Dec. 23 the fest unveiled new guidelines that required in-person attendees to get booster shots and laid out on-the-ground testing practices. Sundance programmers became increasingly concerned about the COVID-19 variant surge, which, as one insider notes, is projected to peak in Park City during the festival’s dates. The next public communication from the festival was the news of the fest moving online. A statement from the Sundance Institute read, in part, “We do not believe it is safe nor feasible to gather thousands of artists, audiences, employees, volunteers, and partners from around the world, for an eleven-day festival while overwhelmed communities are already struggling to provide essential services.”
“None of the information that Sundance has is especially new. Omicron has been surging since November,” says one Sundance dealmaking veteran. “There is a feeling of we gave up on other festivals or hurried to make Sundance or we were accepted to other festivals and came here and now, in what seems like way to preserve Sundance’s hold on these movies have not given us an opportunity to find an alternative.”
On Jan. 10, the Michel Hazanavicius-directed title Final Cut, a sales title due to screen in Sundance’s Premieres section, dropped out of Sundance after it went digital. The statement from the Final Cut team voiced support for the festival, adding, “However, we believe that it is best to premiere Final Cut in a theater with a live audience and have made the difficult decision to remove the film from this year’s festival.
As for accommodations — both for persons and movies — prior to Sundance’s announcement, alternate arrangements had begun to be made. Some attendees began trading Park City housing and condos for more easily cancelable hotel rooms, while one sales rep recounts that after booking screening rooms in Los Angeles and New York as a precaution. But last week’s late-stage switch-up has left many former festivalgoers with non-refundable housing charges through third-party renters like AirBnb and VRBO. The Hollywood Reporter has heard lost housing costs ranging from $10,000 to $45,000.
The long-term impact of the pandemic on the international film industry is still being played out. But one worrying sign is that the parts of the business film markets were set up to serve: cinema owners and theatrical distributors, are the ones that have been hardest hit by COVID.
“Everyone is looking at their expenses and their revenues and making the calculation on whether [a physical film market] makes sense for them,” says Rothbauer. “The big and unanswered question is what is the future of film markets overall?”
This story first appeared in the Jan. 12 issue of The Hollywood Reporter magazine. Click here to subscribe.
