Speaking of film festivals, many people would first associate with the red carpet and awarding ceremonies gathering well-dressed movie stars. However, behind the star-studded red carpet and various awards triggering a lot of discussions are the film markets participated and concerned by film professionals. These film markets underpin the development and prosperity of the film industry quietly.
The film market often concurrently held with the film festival, albeit closely related to the film festival, has a fundamentally different purpose. It provides a platform for the industry to purchase and sell film distribution rights.
Buyers and sellers from all over the world will gather together for international exposure, exhibition and trade negotiation regarding films. Recent years have seen an increasing number of filmmakers participate in the film market. The participants aim to reach copyright transactions, learn about new film projects and industry dynamics and make exchanges and discussions on industry development, etc. The film market has bridged an interaction and communication platform between filmmakers from different cultures and backgrounds.
Overview of World Film Market
In February, when Chinese people are celebrating the Spring Festival, the Berlin International Film Festival is grandly opened on Central European Plains still covered with snow. The European Film Market (EFM) affiliated to it is also held in full swing. Founded in 1978, the EFM was initially a small business space of the Berlin International Film Festival. In the past three decades, it has developed one of three largest film markets in the world. As a first-debuted large-scale film trading market every year, EFM is often used to predict the development direction and trend of the global film &TV market in the next year. Different from Marche du Film that highlights big-budget productions, EFM tends to focus more on micro-budget productions.
With the advent of warm spring, Marche du Film, the largest film trading platform, is held in May following EFM. Representing the highest level of film art, Marche du Film is a leading film market with both artistic and commercial nature. During the Marche du Film lasting for more than ten days, 12,000 film industry professionals from over 100 countries and regions gathered here, reaching a transaction amount of more than USD1 billion.
As the most time-honored international film festival, the Venice Film Festival, which opens at the end of August every year, has always been known for honoring art films. Different from Cannes Film Festival that is both entertaining and commercial and Berlin International Film Festival that emphasizes ideology, the Venice Film Festival featuring diversified themes attaches more importance to purely serving the development of films. Unlike other film festivals with a long history, the young Venice Film Market was not founded until 2012. Pascal Diot, Director of Venice Film Market, said that with a laid-back atmosphere and the characteristics of film concentration, the Venice Film Market would be more convenient for small theater operators, independent producers and distributors lacking financial support. He also defined this as the direction of the Venice Film Market.
Another exception from three major film markets in Europe is the Toronto International Film Festival. As a category C film festival, albeit no awarding support, the Toronto International Film Festival has become the most competitive and influential north American film festival due to the strong north American market, and a dense film exhibition and business atmosphere. Unlike other film markets, the official venue of the Toronto International Film Festival is relatively small, concentrated on the second floor of Hyatt Hotels. The promotion of the film festival and shooting location also takes countries or regions as the unit. The large number of industry screenings allows buyers and distributors to discover excellent works they ignored in previous European film markets as well as potential works independently produced in North America.
The American Film Market, the world’s largest Film fair, is held every November in Sunny California. Instead of setting any award or receiving support from the concurrent festival, it is a world mainstreaming film trade summit purely orienting at the market. Attracting more than 7,000 producers, directors, scriptwriters, distributors and investors each year and reaching a total transaction of more than USD1 billion, the AFM remains vibrant and meets the demands of many regions for American (Hollywood) films.
March after the Spring Festival has embraced the Asia’s largest film and television entertainment market — FILMART, which is held in Hong Kong. The events concurrently held with FILMART include HAF and HKIFF. Hong Kong is an important hub connecting China and the world. An increasing number of Chinese film and television enterprises promote their works to overseas buyers through FILMART. In 2019, 264 exhibitors from Mainland China participated in FILMART, accounting for nearly 30% of the total exhibitors and recording a new high. FILMART has become an important window for showing Chinese films to the world.
In addition to main film markets mentioned above, the Locarno International Film Festival, Busan International Film Festival, Tokyo International Film Festival and so on all have own advantageous film markets that meet the demands of filmmakers in different regions.
Basic Rule of Film Market
At present, the events held during the film market include screening, internal symposium, forum, symposium or round table, face to face talks, high-tech project exhibition and promotion, etc.
In the layman’s imagination, tens of thousands people would gather at the film market, where buyers shuttle between hundreds of film stalls and the best bidders bid on site. In fact, before they participate in the festival, most buyers have made preparations for their intended films in advance. For example, they have started to contact and communicate with the film producers successively, and set the meeting time in advance. A senior domestic buyer who has participated in various film markets for many years revealed that, several films on which he reached cooperation had been discussed more than one month in advance. Since most of the projects are still at the early stage of development or shooting, you can’t see the finished films. Each booth has a TV ready to play the film’s production tidbits or rough cut trailers.
In the film market, the meeting between buyers and sellers is short and fast, with its process as follows: The buyer makes an inquiry for the intended film, then learns about the actual production cost and tries to bargain. He will make an offer immediately if conditions permit. If not, he can set a time limit for making an offer. Good films usually receive offers from many companies at the same time. As for partnership, it depends on the amount and relationship.
The cooperation on films can be reached outside the official venue of the film market, including nearby hotels, coffee shops and restaurants. However, it’s difficult to participate in such bustling outside the “film market” without rich contacts and connections for many years. In many cases, the negotiation on film business is almost finished long before the film festival.
Chinese Exhibitors and Buyers in the Film Markets
With the development of China’s film market, more and more Chinese filmmakers and film companies start to look at overseas market beyond domestic films and the domestic market. Both buyers and sellers actively participate in various global film markets, carry out international exchanges and seek cooperation opportunities. Take the Marche du Film in 2019 as an example. After tax consolidation, new industry regulation and decelerated growth in box office revenues, China’s film industry has entered a cooling-off period compared with past few years. However, there are still about 600 filmmakers participating in Marche du Film for various activities including film trading.
Although the cost recovery of domestic films is mainly dependent on the domestic market, there are still a series of Chinese films flowing to the international market. It aims not only to sell films, but also create public opinion for domestic release. In the past, domestic films used to enhance popularity in the film market through the following ways: publishing film brochures, holding press conferences and walking the red carpet. Nowadays, Chinese filmmakers have become more cool-minded and stayed low-profile about how to make use of the film market to promote and release films in a more effective way.
According to industry insiders, you could hardly see Chinese filmmakers participate in the film market ten years ago. Among Asian participants, Korean and Japanese filmmakers accounted for a large part. The only representatives of major Chinese companies in the film market were not interested in buying films, but in seeking international cooperation. In 2010, Creastar purchased the copyright of THE EXPENDABLES for USD500,000, and earned a box office of RMB200 million after its release in China. Then, more people started to realize the huge profit of buy-out foreign films. A large number of Chinese filmmakers flooded into the AFM and three major European film markets, mainly targeting for action films.
Accordingly, the copyright price of buy-out foreign films keeps rising all the way. In 2012, Le Vision Pictures bought out THE EXPENDABLES 2 for USD8 million, obtaining a box office of RMB330 million after its release. In two years, the box office rose by 50 percent, while the copyright price increased 15 times. Influenced by a growing trend of buy-out foreign films, the quota of buy-out foreign films allowed to be released increased from 30 in 2015 to 47 in 2016.
As the number of buy-out foreign films keeps increasing, the film genres became more diversified. In late 2016, Japanese youth animated film, YOUR NAME and the war film, HACKSAW RIDGE recorded a box office of RMB560 million and RMB420 million, respectively. In 2017, non-action type films including LA LA LAND, DANGAL, BAD GENIUS and THE INVISIBLE GUEST that Chinese audience were unable to see in the cinema in the past, have created new records in box office of buy-out foreign films, jointly pushing the upsurge in buy-out foreign films.
The increasing acceptance of different types of buy-out foreign films among domestic audiences also provides more space for Chinese buyers to choose films in the film market. A senior film buyer shared his selection criteria, “A good story is the first. The cast with which Chinese audiences are familiar is also helpful so that it will echo the watching rhythm of Chinese audiences. Besides, art-house films are definitely off the table for the time. ”
Foreign filmmakers also took notice of the hot domestic market of buy-out foreign films. More and more copyright owners required to participate in the revenue sharing of box office in China, rather than simply selling the copyright by buyout. In fact, based on rich experience in years of dealing with increasingly emerging domestic buyers, senior foreign filmmakers have developed their own response rules. As mentioned above, a core circle of buy-out foreign films has been formed in China. Many of the films that appear in the market are not lead contents. The real lead contents have long been taken over by mainstreaming European sales and distribution companies. These companies tend not to set up booths in the market, but receive Chinese buyers they have already made an appointment with in the office buildings, hotels and coffee shops around the film market. When encountering unfamiliar new buyers, they will also collect information via various channels to investigate their background. For example, whether these buyers have sufficient payment ability, how about their credit conditions, whether they have strong domestic publicity ability and whether they have completed successful cases. At this time, the industrial contacts, resources and credit accumulated in many years have become intangible assets of the company, playing an important role in the competition of buy-out foreign films.
Matthijs Wouter Knol, Marketing Director of the European Film Market at the Berlin International Film Festival, said in an interview with Sina Entertainment in 2018 that, Chinese buyers who were still celebrating the Spring Festival were attending the film market far higher than expected, and were heavily involved in market transactions. This is beyond the expectations of the organizer of Berlin film market. However, in sharp contrast with full-swing trading of buy-out foreign films in the global film market, the domestic market of buy-out foreign films declined suddenly. According to the TOP Thinktank, in 2018, a total of nearly 80 buy-out foreign films were released, hitting a record high. But the total box office was less than RMB3.5 billion, down from RMB4.4 billion in 2016 and RMB5.7 billion in 2017.
The serious homogenization of themes and audiences’ aesthetic fatigue also contributed to this. Besides, with the rise of domestic films in 2018, the market tends to be saturated, while the performance of Hollywood blockbusters is still weak. Small and medium-sized buy-out foreign films as a “supplement and adjustment” are unlikely to be released in cinemas.
In spite of buying the domestic copyright of buy-out foreign films after overcoming various hardships, obstacles and misunderstandings, the domestic release of these buy-out foreign films is by no means plain sailing. The first difficulty lies in obtaining the index of buy-out foreign films and determining the film schedule. As an undisclosed part in the review process of buy-out foreign films, the access to the index of buy-out foreign films is usually dominated by experienced players who have been deeply involved in this field for many years. Even with quality films, many buyers fail to get the opportunity of releasing films.
Even if a few buyers are lucky enough to finally get the release qualification via mysterious channels, they are still exposed to the risk of being completely unable to determine the schedule. This resulted in haste and lagged publicity and distribution, unforeseeable competitors subject to the same schedule, as well as the impact of online piracy resources, thus making Chinese buyers in the film market to be more rational and cautious.
To improve the power of discourse, facilitate the introduction process and avoid risks, some sharp-sighted buyers have changed their mind and adopted a different strategy, i.e., involving in the upstream investment as the producer and sharing the global revenues of films. This is also a way of survival throughput downward industry development of buy-out foreign films.
(Editor Song Yiran)
By LI Chenlu
Originally created by: Film Intelligent Office