AFM: Turbulent Times Creating Risk, Opportunity in Global Marketplace

Empty Movie Theater - Generic Image - 2011
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China and streamers are scrambling the economics of independent film finance, producers and financiers said at a panel Friday.

The independent film marketplace is more turbulent than ever due to the economics of the Chinese box office and video streaming services, a trio of panels told an American Film Market audience Friday. The result is unprecedented risk for producers, distributors and sales agents, but there are windows of opportunity.

Independent Film & Television Alliance president Jean Prewitt and Motion Picture Association of America chairman Charles Rivkin kicked off the morning, with Prewitt remarking that China is “still an uncertain marketplace” — but, she said, an “incredible” one.

“China reorganized its sector,” she said. “People do deals there aware of the risk.” Getting money out of the country is complex, and, she said, “China Film Group has always put itself in the equation.”

Those factors, and the effect of streaming services on territories around the world, have scrambled film finance. “The new model is everything goes,” said Prewitt, who pointed to an influx of private equity from wealthy individuals in Silicon Valley as proof.

And yet, despite the challenges — which continue to include piracy — “we are living in a golden age of content,” said Rivkin.

Translating that into concrete terms were three producers and financiers: FilmNation Entertainment COO Milan Popelka, Highland Film Group CEO Arianne Fraser and STX Entertainment president of international sales John Friedberg.

Key factors in the financing of a project, said Fraser, are “genre, cast, director, producer” and the availability of a theatrical release. Also key: “What is the story? Who’s your audience?”

Friedberg echoed the importance of those factors, while Popelka added another: what the appropriate platform is for the project.

And China, again: Before committing to a project, said Friedberg, “we check with partners around the world, including China.”

Said Popelka, “It is challenging out there. There’s a scarcity of content.

“Distressed environments provide an opportunity for those who can adapt,” he noted.

Harkening to AFMs of bygone days, Fraser noted that “there was a time in the past when you could sell anything” based on a poster.

And China, yet again: As examples of flexibility, Friedberg cited Martin Scorsese’s upcoming $150 million Netflix film The Irishman, and noted that STX is distributing the picture through the company's partners in China. In contrast, for Bryan Cranston vehicle The Upside, the company is working with Amazon and handling the U.S. release.

And on the animated project Ugly Dolls, featuring Nick Jonas and other pop personalities, STX is working with Hulu on a TV show to follow the film’s release. He disclosed that the company has 30 to 40 projects in development for the next three to five years.

Finally a panel of buyers weighed in: Constantin Films head of acquisitions Sasha Buhler; Metropolitan Filmexport president Victor Hadida; and Paramount executive vp worldwide acquisitions Syrinthia Studer, who bought the hit Book Club at last year’s AFM based on a promo reel — but after having tracked the project for some time.

Noting that her studio had “gone through a degree of renaissance,” Studer quoted her boss, Paramount CEO Jim Gianopulos as saying, “We should be in the business of making movies for someone or everyone.” She explained that was an apt description as the studio uses acquisitions to diversify its slate of wide-appeal titles.

“The theatrical experience is where the value is created,” said Hadida, whereas “the biggest challenge with streaming platforms is how to make your content stand out.”

Buhler agreed, saying, “More than ever, we need to find what gets people into theaters.”

Said Hadida, “The biggest thing we need to fight is the couch.”