What Are Film Markets and How Do They Work?

Film Festivals v.s. Film Markets

Every year, there are over 4,000 film festivals held; approximately 60 – 70% of those are held in North America with dozens in Los Angeles County alone. During that same amount of time, the world is privy to three film markets. Although most people don’t know the difference between film festivals and film markets, the differences couldn’t be more glaring.

 “Film festivals are cultural events for their community,” explains Jonathan Wolf, who is Executive Vice President of the Independent Film & Television Alliance (IFTA) as well as the Managing Director of the American Film Market (AFM), a product of the non-profit IFTA. By way of comparison, he says, film markets are more akin to trade shows. The IFTA “is the global trade association of the independent motion picture and television industry” and was formed to aid independent filmmakers in getting their products to market.

Every year, the AFM closes the Loew’s Hotel in Santa Monica to travelers and turns it into an eight story complex of offices by production and distribution companies from all over the world. All the bedding is removed and the hotel room furniture is replaced with office-type furnishings. Companies open their doors in the morning and head to their off-campus hotel room to sleep at night – unless they’re local, in which case, they can go home for the evening. The IFTA has been doing this since 1991. Previous to that, the Market, which began in 1981, was held at the Beverly Hilton Hotel. The 2017 edition will mark Jonathan Wolf’s 20th American Film Market

Comparing Film Festivals and Film Markets

Most of the income at a film market comes from the rental of office space and the sale of badges, but sponsorships are a huge part of film festivals’ income. “Film festivals are no longer festive,” explains Lloyd Kaufman, President of Troma Entertainment, the longest-running independent film production company in history formerly elected Chairman and current Vice Chairperson of the IFTA, and most importantly, creator of the Toxic Avenger. “Originally, their purpose was to bring movies to the public that the public couldn’t generally get (meaning those that the Big Six studios weren’t forcing the theaters to play). Cannes has turned into a showpiece for the cinema elite and has become more interested in perfume, $100,000 costumes and more about Kim Kardashian and Paris Hilton than independent film. Big film festivals’ purpose is no longer to bring the movies to the world that wouldn’t otherwise get to the public. They’re not there to help filmmakers. The have to suck up to whoever can pay to sponsor.” Kaufman’s own film festival, Tromadance, which has been ongoing for 18 years, still sticks to its principles of bringing offbeat, non-mainstream movies to its audience.

Film Festivals v.s. Film Markets

Film festivals are curated. In order to get your film to become a selection of a festival, you will need to have it formally accepted into the festival. This involves sending a copy of your movie to the festival’s organizers and having them vet it. There are no such gatekeepers for film markets. If you want to take your flick to the film market, you’re welcome to do so. If it’s deemed good enough to sell, then it will sell — hopefully.

More than half the movies sold at film markets hadn’t even gone into production at the time they were sold. This, of course, makes sense because principal photography is the most expensive part of making a movie. Movie makers want – and need – to get advance money to complete their vision.

AFM reports that there were a total of approximately 7,000 attendees at the 2016. The biggest festivals attract tens of thousands of people, the vast majority of whom are not in the movie industry, but are generally movie aficionados. Festivals that are used for marketing to the public are not good for producers; they can lose control of their movie and the movie will be reviewed, often by unqualified members of the public who are jam-packed into a theater to see movies. Worse still, many amateur reviews are posted to the Internet in real time, where prospective buyers have the opportunity to hear other people’s opinions before being able to see the movie and formulate their own unadulterated opinions.

There are movies sold at film festivals, such as Sundance and Toronto, but they generally don’t fetch as much money as those at the three film markets. Selling movies is not the primary purpose of film festivals, and therefore isn’t a common theme; for the most part, only big-name movies that have created a lot of pre-festival buzz get sold at festivals.

Film markets serve a single purpose – to bring buyers and sellers of entertainment together.

Film markets serve a single purpose – to bring buyers and sellers of entertainment together. While this model has worked for decades, Kaufman says that it needs to be revamped. “Film markets are becoming obsolete. The only movies getting bought and sold are the sausage links (VOD). The model doesn’t work anymore, and it needs to be updated.”

Who comes to a film market?

The film market season begins in November with the American Film Market in Santa Monica, California and wraps in late May at Cannes, France. The European Film Market, which is held in early- to mid-February, is approximately 30 percent smaller than Cannes and AFM, the reason being that deals made at AFM in November aren’t often completed by February. Although three months is usually enough time to work out all of the details of a film deal, schedules get complicated by the end-of-year holidays.

Film Festivals v.s. Film Markets

Among those who attend, you’ll find sellers of completed movies, packaged not-yet-completed movies and scripts and exhibitors including producers, producer/director teams and production companies. You’ll also find buyers, including distributors and sales agents representing territories from all over the world, as well as online and streaming video distributors and companies looking to put movies in theaters. Also at the market are general industry participants, including producers, writers, film commissions and post facilities.

How Does a Film Market Work?

Movie and television rights sold to territories and buyers at AFM represent around 70-80 countries. Territories vary vastly in size and value. A buyer could be looking for rights to the entire Chinese market or just the city of Hong Kong. Obviously, the one representing the entire nation of China is going to be willing to pay significantly more than the one representing Hong Kong; the larger the market, the more it costs to buy the distribution rights. There are close to 200 territories listed on the IFTA’s website. Some distributors may even be looking for worldwide distribution rights across all platforms — although they’re not likely to offer the best deals in the long run. Others may be looking to purchase certain types of rights, such as online distribution or theatrical distribution.

Amazon and Netflix have become two of the largest purchasers of content at film markets and festivals over the past several years and have caused prices of movie and television rights to skyrocket, much to the delight of indie filmmakers big and small. There are potential drawbacks, however. Many buyers of theatrical films are looking to purchase all of the rights for a given territory, including the lucrative VOD, streaming, Blu-Ray and DVD rights. If Netflix, for instance, grabs the video distribution rights, some of the larger theatrical distributors may no longer be interested in buying the movie. So far, however, the consensus is that these new digital forces have been a boon to the industry.

When AFM comes to Santa Monica, they take over all of the screens in town and screenings are held during business hours. There were over 300 films screened at the 2016 American Film market, according to its managing director, Jonathan Wolf.

Film Festivals v.s. Film Markets

Unlike film festivals, a film market is not a place to go looking for a job, so it’s not for actors and directors looking to get work, although they can certainly go to market to sell their packages. Obviously, it isn’t for the general public either as it is an expensive proposition for someone who is simply there to rub elbows with the folks in the trenches of the movie industry. There are lots of producers at AFM, as well as producer/director teams. The majority of them are looking for distribution deals for their current or recently completed project. You will encounter a lot of production companies at film festivals. Many of them have recently wrapped their entry to the festival and are looking forward to starting their next film. If you are an actor or crew person looking for a job, you may run into someone looking to hire you for that job. This isn’t true of film markets because most are there to sell their film, package or script or are there looking to buy those products; they’re not there to hire cast and crew for their next film.

All three film markets are accompanied by a companion film festival. The American Film Market is followed by the AFI Film Festival, which opens the day after the market closes; the European Film Market runs simultaneous to the Berlin International Film Festival and Cannes, of course, runs parallel to the Cannes Film Festival, bringing in thousands of movie enthusiasts to the magnificent Mediterranean coast of southern France.

Independent movies

Independent movies seem to be entering into a golden age, partly because of the way that studios are sticking to their failing formulas and not producing the type of movies that the public wants to see. Lower costs and increased competition for movie making and new platforms getting involved in the creation and distribution of feature films also factor into the equation.

Twenty one of the movies that were nominated for Academy awards in 2017 were financed and/or sold at the American Film Market. Overall, seventy eight nominations for the 2017 Academy Awards went to independent films. Although this is a most encouraging sign for indie filmmakers, Kaufman has a warning, stating that “international conglomerates control the pathways to the public... to the revenue. Sundance is controlled by vassals of the cartel that runs the media (and) occasionally throws a bone to an ultra-politically correct documentary.” He says that making independent movies out of the mainstream these days should be considered “an expensive hobby because it’s so difficult to make money at it.”

It’s all about the sale.

Selling a movie, particularly one that still needs financing so that it can eventually be made, has never been an easy task, but there has probably never been a better time for a motivated producer to get his or her work sold. Film markets are the best way to get an uncompleted feature film sold. Wolf’s advice is to “be a salesman. The best salesmen ask questions. Find out what (their client is) looking for. Learn what they have been purchasing and what they’re looking to make. Think 12 – 18 months ahead. Tailor your pitch and qualify your buyer, just like a car salesman would.” And he also advises filmmakers not to worry about selling a movie that has yet to enter principal photography, as most exhibitors are pre-selling packages, not completed films. “Rarely is a film completed before it’s at least partially sold.” So go ahead; make your sizzle reel, create your poster and put your budget and electronic press kit together and get out there and sell, sell, sell! After all, as Wolf says about the people at AFM, “These are the best pitchers in the world.” So get out there, do your marketplace intelligence and find out what’s working. Look to see what stars, genres and budgets are selling and tailor your package to accommodate the wishes of the people who hold the bucks. Another piece of advice, courtesy of Jonathan Wolf, is that the second half of the market is best for smaller films for producers with scripts and packages to attend. During the first few days, the distributors are focused on selling their films – most will have little time for acquisition meetings.

Film Festivals v.s. Film Markets

Smaller films by unknown artists often get trampled when the bidding for the big-name films occur. There has been an adage in recent years that the only movies that get bought and sold are those that cost over 25 million dollars or below five million, leaving the vast majority of movies made by independents unable to even get financed. Kaufman takes issue with the way that this works, explaining that only “a handful of giant franchises with big stars — the so-called tentpole pictures — get picked up. Only the big guys with the A-movies are buying and selling. Markets have to reinvent themselves. Troma is the only indie studio that’s 43 years old and we really can’t afford to get a booth anymore.” He then goes on to lament “maybe nobody wants the movies we make…or more likely the cartels that run Hollywood have economically blacklisted us.” He goes on to explain that the markets need to make changes before it’s too late, stating that “both film festivals and film markets have morphed into things they weren’t set out to be.”

Wolf tells us that “Sales is the highest paid profession in the world” and he goes on to explain that presales are a major component for bigger films. What are presales? That’s the result of pre-selling movie rights to foreign and domestic territories. By selling these rights prior to completing the movie, you guarantee yourself more money to complete it. If you are unable to sell the movie yourself, then you’ll need to find a sales company to make the sales for you. Although you may see yourself as an auteur who only needs to bring his vision to life, leaving the dirty work of the business side to others, then you’re not likely to be creating your vision any time soon.

On the other side of the coin are the producers who believe that they can do everything and nobody else can do it better. Great producers build teams. The bad ones believe in the theory of transferrable expertise, which means that they feel if they can do one thing well, they can also do many other things equally well.

Wolf goes on to explain that “Competent marketers are able to judge when it’s time to get reviews.” Having your movie or series pilot shown at a market will keep amateur reviewers from spewing their opinions about movies before the buyers have a chance to see it for themselves. The atmosphere of a film market also helps creators to get paid better for their work. The short timeframe of a film market, which runs for about a week, creates urgency, making it much more of an auction environment. Plus, with all of the world’s biggest buyers represented, the auction atmosphere gets even more intense. These are people who bid against each other all the time; they don’t want their biggest opponent to win any bid. Markets help to get deals closed and the exclusivity of the film market atmosphere helps to drive up prices for independent films and their filmmakers.

Studios and Independents

The IFTA defines an “independent film or television program” as one that “is financed primarily outside of the six major U.S. studios. IFTA's Members, and the independent production and distribution industry generally are creative and entrepreneurial, committed to raising the funds to make the film or program that they – not a team of studio executives – have chosen and to direct its exploitation around the world. IFTA's Members constitute the majority of the world’s most important companies in the independent film and television industry.

Independents produce at least 500 films and countless hours of television programming each year generating more than four billion dollars in revenue annually. The number of independent productions each year – more than 70 percent of film production in the United States alone – creates considerably more job opportunities worldwide than the majors. The six major U.S. studios have gradually become more marketing and distribution specialists in the U.S. marketplace than production entities.”

Independent movies are made by those who are passionate about making their movie. It’s unfortunate, but the movies that have been coming out of the studios are controlled by money people who are primarily concerned with making money, not art. This is why they seem to put out very little other than sequels, reboots and live-action comic books and why we, as movie-making artists, need to get our films made and get them to the public. Film markets are a great place to start.

Sidebar: Who is the IFTA?

The IFTA (Independent Film & Television Alliance) is the voice of the independent film and video creators. Although many of their members are valuated in the millions of dollars — the Weinstein Company, for example — their mission truly is to fight for the little guy, the independent filmmakers such as you and me.

From their website: “IFTA is committed to enhancing its Members’ ongoing ability to finance, produce, distribute and market independent films and television programming around the world. It is the advocate for the independent film and television industry worldwide and speaks out on issues of critical importance, at times lobbying governments around the world regarding measures directly affecting the independent industry.

IFTA has amplified its effectiveness through the alliances it has forged with other industry groups. As a result of its direct participation in international organizations – the International Federation of Film Producers Associations (FIAPF), the International Intellectual Property Alliance (IIPA), and the London-based Creative Coalition Campaign – IFTA helps shape public policies impacting the film and television industry.

As an accredited Non-Governmental Organization (NGO) member of the World Intellectual Property Organization (WIPO), IFTA also actively participates in WIPO discussions on proposed international copyright and performing rights treaties.

IFTA’s other permanent and ad-hoc industry coalitions provide additional avenues to influence public policy debates surrounding the independent industry.

To enhance the financing, production, distribution and marketing of independent films and television programming around the world, IFTA offers tools and services that address practical requirements in an increasingly complex marketplace.

First and most visibly, IFTA produces the annual American Film Market (AFM) each November in Santa Monica. The AFM, along with similar events held each year in Cannes, France and elsewhere, is a key venue at which the world’s Independents negotiate the deals under which films are made, financed and distributed globally.

John McCabe is an independent filmmaker in Los Angeles and a firm believer in indie filmmaking for the masses. He can also write a bio in the third person and can be reached at John@NeverSayCut.com

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Tue, 04/11/2017 - 10:33am