Greetings from MIPCOM in Cannes! Actually, I’m not in the South of France anymore. I’m 35,000 feet above sea level en route to South Korea – Seoul to be exact. But, I just left MIPCOM and that’s what we’re focusing on today.
For those of you who are new to “Going Bionic” (thank you for reading by the way), MIPCOM is a major TV sales market in Cannes, France every October. Yes, it’s a “TV” sales market, but these days TV markets provide the best opportunity for independent films to find distribution. So, without further ado, let me shed some light on some up-to-the-minute trends that I noticed at MIPCOM last week, and how these trends shape the immediate future of independent film.
TV Markets Are Better Homes For Independent Films
TV markets like MIPCOM are better homes for indie film sales, because the prices offered for TV sales are more in tune with what most indie films can wrangle – and that’s if they’re lucky enough to get an offer in the first place. Like film buyers, TV buyers will expect your film to have solid names. But, if it doesn’t, you still may have a chance to land a TV sale because your film may fit into an open slot that needs to be filled by various networks and cable outlets.
Chapter Eleven Is Distributor Heaven
With the crash of the world financial market, quite a few distributors and sales agents have found themselves taking huge, six figure and seven figure losses. Most are so hopelessly under water, that it’d take an Avatar or two to pull them out of debt. So, instead of continuing to dig their own grave, many independent distributors are purposely bankrupting themselves and then setting up shop under a new company name. This can be a very smart business move, but it royally screws filmmakers. This is because once bankrupt; the distributor doesn’t have to pay filmmakers what they owe them. What’s worse, the films the distributor represents usually get tied up in the bankruptcy. Attention filmmakers: when you’re signing a distribution contract, make sure you get two things in it:
- Your film rights revert back to you immediately upon your distributor or sales agent filing for bankruptcy.
- Your distributor cannot reassign or sell your rights to another entity, without your express written consent.
Demand these two clauses and you’ll safeguard yourself from having your film be eaten up by a bankruptcy.
Ghost Town Markets
Calling MIPCOM 2010 a “ghost town” is a bit extreme, but far less distributors, buyers and sales agents attended than in years past. I noticed fewer sales booths and shorter lines at high-end beachside restaurants – two very bad financial signs. The companies who did attend MIPCOM 2010, (like my company Lonely Seal Releasing) found a “let’s wait and see” attitude from buyers, regarding the value of independent films. How bad is it these days? Right now, I’d bet you own a pair of shoes worth more than most indie films. I know that statement is harsh, but the bottom has really dropped out with regards to the value of independent films. Thus, if you’re a filmmaker whose about to make a film, it’d be a really good idea to meet with distributors and sales agents to get a read on what your film would be worth – before you risk life and limb to make it.
If you’ve already put your neck, credit rating and everything else you and your investors own on the line to make your film, then you should get a few distribution companies to give you an estimate of what your film is worth. If the number will get you shot by your investors, then it’d be smarter to wait until the first quarter of 2011 to go after distribution, in order to see if prices get better. Of course waiting until 2011 is also risky, because doing so will age your film and likely lessen its value. However, prices are so low right now it may not matter either way, and waiting may give you a shot to see if the market for independent films picks up. Either way, film values will eventually go back up. They always do.
Blame It On The Euro
Over the last five years, the Euro has been worth a lot more than the United States Dollar (1 Euro cost $1.65 USD at one point). While during that time my company’s travel budget was abused like a bad comic on open mike night, the only advantage to the Euro being strong is that European buyers bought a hell of a lot of American independent films, because they were so cheap to buy. The feeding frenzy started four years ago, and lasted until about this time last year. But, as the American Greenback started to gain on the Euro, (1 Euro cost as little as $1.22 recently, and it now sits at $1.39); European buyers put the brakes on snatching up high amounts of American independent films.
The other issue is the European buyers bought so many American independents while the getting’ was good, that they saturated the world market with them. This killed the current need for American independent product in Europe, and now it may take a year or two before a healthy need for American independent films gets built up in Europe again.
Even Well-Packaged Films With Stars Attached Have Lost Value
One emerging trend from MIPCOM 2010, is that film buyers are no longer willing to pay big bucks for films with big stars – if those films aren’t made within a genre that traditionally sells well (sci-fi, action and thrillers are the go-to “bionic” genres).
Case and point: My company was asked to take a handful of film packages to MIPCOM last week, in order to gage the interest level from buyers. These “packages” are films that have not shot yet. Most of them have actors attached, and part of the budget in place. Since financiers are being much tighter with their purse strings these days, film producers need to know what their projects will be worth internationally, in order to see if they can raise part of their production budget from international sales.
With all of that in mind, here’s a quick rundown on how film buyers worldwide responded to a few of our packages.
- A) The first film we were getting a temperature on is a dramatic biopic with a few Oscar-winning, above the line elements. Although the producers originally wanted a 70 million dollar budget, film buyers agreed it should be no more than seven million – ten times less than the producers wanted. In fact, most buyers said a seven million dollar budget was “ambitious” and the film makes more sense in the three to five million-dollar ballpark. They also said the film would be better suited as a cable project, citing that the story – even with Oscar winners telling it – would not captivate enough theatrical filmgoers to make it a good financial risk.
Think about that; Oscar winners tied to a dramatic biopic originally thought to be a 70 million dollar budget – can today only support international sales based on a three to five million-dollar budget. That blows me away. Of course, there’s no way the producers will ever agree to dividing their 70 million dollar budget by 20, (which would be $3.5 million) but the reality of the current market may not give them a choice. Then again, they may get a studio to make the film for $18-$25 million. Studios like doing favors for Oscar winners – at least they used to.
- B) The second picture is a $10 million dollar horror thriller. Several buyers blurted out the same response to this very hip concept; “we love this package – if it were budgeted at $3 million.” The buyers also pegged the film to be one that would thrive on cable and DVD, but many of them doubted that the film would garner a theatrical release.
- C) The third film is a $6 million dollar thriller with a laundry list of solid names. Buyers flipped over this film so much, they’re already lining up to buy it.
What the film buyers’ reactions to the above three packages tells me is that now more than ever, genre films made at a price, and with at least a few sellable names, will do well – even in this troubled financial climate.
Attending MIPCOM 2010 felt like I was on a plane that reaches its destination early, but is forced to circle the airport in a holding pattern until an ugly layer of excessive fog clears. We’re right there, ready to land, but we can’t. All we know is that the fog will eventually clear. We just don’t know when, or how bumpy the actual landing will be. So buckle up, hang on tight, and enjoy the ride into the future of independent film.
Thanks again for lending me your eyes, and I’ll see you next Tuesday!