Trade holds up in Cannes despite market woes
As the Cannes film festival hit halfway, movie executives from around the world began tallying the cost of a world economy rocked by a nine-month old credit crisis and its impact on show business.Updated: May 20, 2008 18:45 IST
As the Cannes film festival hit halfway on Monday, movie executives from around the world began tallying the cost of a world economy rocked by a nine-month old credit crisis and its impact on show business.
The answer from several players was that while costs were sharply higher for dinners and parties, business activity was about even with 2007's Cannes film market.
Executives said they were facing global business issues more ominous than a looming recession -- piracy, flat admissions in theaters, slowing DVD sales and competition from the Web and videogames.
U.S. movie attendance, for instance, was up slightly in 2007 at 1.4 billion tickets sold versus 1.395 in 2006.
In European Union countries, admissions were off at 919.4 million in 2007 from 931.5 million one year earlier, and in Japan, the figure was 163.2 million for 2007 versus 164.3 million, according to trackers in the respective regions.
But there was one key answer to beating the competition that was as old as showbiz itself, the experts said. If you have a good movie, buyers will come knocking. If not, au revoir.
"We have not seen such a big slowdown because there is an appetite for commercial films. So, if you have the product, people will come," said Helen Lee-Kim, president of Lionsgate (LGF.N: Quote, Profile, Research) unit Mandate International, a seller of titles such as comedy "Whip It!," Drew Barrymore's directorial debut.
Heading into Cannes, the world's largest event for the buying and selling of movie rights, many companies believed a relatively high value for the euro versus the U.S. dollar and other currencies would make their films relatively cheap.
But many sellers said demand had not risen greatly because, while distributors were willing to buy, they were carefully watching their costs.
Coping with high costs
Currency fluctuations caused promotional and other expenses to run as much as 15 percent to 40 percent higher. However, many market players said they were spending.
"We didn't reduce much of anything because we still have to promote our films," said Philippe Diaz, co-founder of Cinema Libre Studio, whose titles include "Bloodline," which looks at the belief Jesus fathered a child with Mary Magdalene.
As in recent years, distributors in Eastern Europe still hungered for new films. Buyers in Britain, France and Germany were active, while opinions about Italy were mixed.
The competition for selling to Asian companies was tight, due mainly to increases in the number and quality of local productions in that region, market players said.
But for some producers making films in Asian markets, business was booming.
The Media Development Authority (MDA) of Singapore, which was created about five years ago to develop film, TV and other media products, has grown rapidly.
Chief Executive Officer Christopher Chia said the MDA had seen its film financing activity grow from zero to roughly $370 million in about two years, and he thought he may be able to double that in another two years.
New, digital 3-D movies have captured the imagination of market players at Cannes with the recent box office success of films such as Disney's Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour.
And where recession is concerned, most experts noted that the movie business had generally done well in tough times as people looked to inexpensive movies to escape everyday woes.
"You go back and look and it's true," said Chris McGurk, chief executive of Overture Films.
"We've been affected by the DVD business, and foreign markets have achieved maturation. But with things like Blu-ray (high-tech DVDs) and the growth in new media, you're going to see it begin to grow again."