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A Short History of the Biz

A Short History of the Biz

By our guest blogger, Peter Belsito:

I am talking here mainly about two (relatively) new and influential facts of our business:

1. How the march of technology (aka today ‘digital’) affects us.
2. How the development of film festivals draws our attention and presence.

TECHNOLOGY

Technology is a neutral relentless always developing force, uncaring of the needs of the marketplace, it just marches on implacably and always will. Human society spirals upward. The market complains (yawn) and always will but technology cares little for that, all it knows is movement, progression …. This inevitably changes the way we do business, what and how we’re selling. It also changes the terms, conditions and costs and prices in the business. People who can’t change fall away and younger generations arise.

The beginnings of the modern international independent film market of today can be traced to the ’80s with a technical innovation known as video.

This gave the film business something new to exploit – an ancillary right. Before that all films had was the right to show theatrically or non-theatrically and then they ‘died’ went straight to heaven (aka ‘television’ which has been around as a commercial medium since the post war 1940s).

Film itself, discovered by the French, the Lumiere Brothers, as a medium, in 1895, had been set by the heads of big companies in the teens of the 20th century, among a diversity of celluloid formats, to be 35mm as the universal format. Until today ….

So video in the 1980s threw the business into crisis. Similar to today, no?

Then when dvds came in the ’90s the same thing again, crisis and repositioning of the companies, peoples, schemes in the marketplace.

Today the situation is once again in crisis and changing rapidly, the terms and conditions of ‘the business’, complaints are rampant and many new players are moving in aggressively, creatively and trying to figure out the only problem we ever really had – how to connect audiences to the endless flow of cinema content that, like technology, marches ceaselessly forward and demands our creative attention.

FILM FESTIVALS

Film festivals in the ’90s also underwent a change and became an integral part of the ‘market system’ for independent film. They first functioned as portals where new cinema of a certain (or not!) quality could be seen, platformed, reviewed and examined for their possible path into the ‘commercial marketplace’. The current big four – cannesberlintorontosundance – led to a change in the previous stable 3 formal markets. These de jure markets were like conventions, they were the system that we inherited from the 1980’s – these three markets were MIFED (in Milan) in the fall, AFM (Santa Monica) in the winter and Cannes in the spring.

In recent years there have been rapid changes and we are now confronted with a 5 market circuit and a number of lesser but still important festival / markets that is shifting and developing to this day.

The festivals have pushed their way into the market and today the situation is like this –

1. The ‘circuit year’ begins in September in Toronto with a huge quality Festival and de facto (not de jure) market. They have an SIO (Sales and Industry Office) to handle us business types.

2. November sees AFM (no festival!! they tried, kind of, with AFI for a few years, and perhaps are still trying, but that Fest is itself in a sad decline now) as a ‘de jure‘ (formal, conventionlike) market – closed hall, badge only access, seller booths, buyers wandering the halls. Lots of screenings (e.g., Cannes this year listed 1,500 separate screenings – some film repeat screenings – at various ‘buyer or trade or badge only’ venues)

3, Sundance in January has a de facto market and is an important festival aimed mostly at U.S. indies for the market. Sellers work out of the SIO (Sales and Industry Office) like in Toronto or hotel suites, cafes, the hotel lobbies, etc.

4. Berlinale in February has a huge quality festival and a de jure market in a closed hall. There are also LOTS of meetings, stands and business done at the hotels in the lobby and booths and suites.

5. Cannes in May has the most important Festival and the biggest de jure or formal conventionlike market, the Marche du Film. Anyone who’s been there cannot help but notice the signs up high on buildings facing La Croisette, or ocean walkway, indicating plenty of business being conducted outside of the formal market.

Of course there are several other really important, smaller, localized, regional events that must be mentioned and where buyers and sellers congregate and business is done – these include Venice, San Sebastian, Rotterdam, South by Southwest SXSW, Guadalajara, Ventana Sur in Buenos Aires, Pusan and dozens of others all over the globe.

FURTHER FESTIVAL DEVELOPMENT

Those of us on ‘the circuit’ these last years have always noted the development of these strange, benevolent, peculiar and increasingly GANGANTUAN and ever more difficult to navigate events. What next? Well, there appears to be an answer on the horizon. The biggest among them, some of the most prominent, have gone into the facility and real estate business in a good and interesting way. We think as they, the festivals, become more established and ever more influential in our society’s cultural life, this movement will expand.

We need only mention three of the biggest and most mature, stable events that have put great effort into building new facilities with screening rooms, year round repertory screenings, production and educational facilities in the middle of great cosmopolitan areas. We need only mention these names – Toronto TIFF (2010), Pusan IFF (2011), Mill Valley IFF / California Film Institute (in San Francisco Bay Area in Marin). Toronto has extended invites to other area film events to join them in the new building. Pusan has an Asia wide influence which it looks to extend.

THE FUTURE

The market today is climbing back to attendance levels seen before the global crisis of late 2008 which really had a drastic effect on business and Market attendance in 2009.

2009 was a disaster year with buying and selling all over the world – and yet theatrical exhibition saw a success and rise unprecedented in years. With German boxoffice riding high (BO in the territory was 25% up to USD $1.4 billion last year), U.S. went to USD $10.5 billion (up 10% ) with 521 theatrical film releases and 1,412.7 billion tickets (average USD $7.50 per ticket) sold, and Avatar alone bringing in USD $750 million (plus international box office of nearly USD $3 billion). 2009 box office in France had 200.85 million entries into French cinemas, the largest recorded attendance for 27 years. Not since 1982 was the film business able to find such comparable crowds.

2010, beginning in Berlin: The market has been coming back. Cannes Market claims attendance is up with films and projects (4500 in the Marche these past weeks) at 2008 levels.

Global business to business transactions in the film business in 2008 was roughly estimated to be US$2 billion per year with Cannes estimated at US$1 billion, AFM at US$700 million and EFM at US$500 million. Studio product of course is not counted here as this is another system entirely. (Studio films are made and released with worldwide distribution ‘in place’, in fact that is what defines a studio. Studios do occasionally get involved with ‘big films’ that come from and are developed in the ‘indie sector’, in fact more and more financing through international co-productions and tapping into international film funds are becoming the rule.

The mood this year at Cannes was lively and upbeat. Prices are not where they were a few years ago and new methods of doing business are popping up everywhere. However the new players, companies and methods of business add an invigorating element to the business life of our film world. Most importantly the quality of the films remains high.

Another new and very exciting development is the entry of many sophisticated players into the (particularly U.S.) distribution business as the withdrawal of the majors from the indie production and distribution business has a left a space that will be filled, as ‘nature abhors a vacuum…’. And, another growth area that has come about because of the crisis and the majors pulling back on their own production, is that the major studios are now buying independent films for specific territories which their studios are not supplying with their own product.

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