European filmmakers need to be savvy about new media, film festivals and diversified sales models in Japan, according to panelists at a UniJapan Entertainment Forum on European films in the Japanese market today at TIFFCOM.

“Films used to be able to recoup their money through DVD release, but now P&A costs almost always create a loss, and the pie does not grow,” noted moderator and presenter Jason Gray, Screen International’s Japan correspondent. “Although recently, digital distribution has cut down the costs, the profit margins are almost non-existent.”

Panelists noted the usefulness of film festivals such as the Tokyo International Film Festival as launch platforms and generators of publicity. Japan is a market where local films get tremendously integrated campaigns across the media board, thanks to the production consortiums which usually include film, TV, newspaper and management companies.

Foreign films need to take advantage of local festival exposure and have distributors work together to share materials and cut costs.

At the same time panelists noted that in Japan the Palme d’Or and other festival awards have been losing currency as marketing points, unlike the Oscar.

“Also, awards can be a double-edged sword. They can bring in press attention but at the same time, the price in any given market get inflated, making it harder for the buyer to make their money back,” warned Mark Adams, Screen International’s chief critic, who has also formerly been a buyer and curator. “These days, I know some sales agents make as much money on the film festival circuit as they do in sales.”

With local films dominating the majority of market share with Hollywood films, non-US foreign films have seen a decreasing percentage, and striking deals with no or lower minimum guarantees has become necessary.

“There’s a shrinking diversity of films, not just in Japan where it is encouraging to see local films are increasingly successful. We have sort of sub-Hollywood kinds of film being made everywhere. For instance, the technically French films such as Taken, Transporter or Oceans, which visually don’t have any relationship with French culture or artistic styles, not to mention the films of our British friends such as Harry Potter,” said Jean-Michel Frodon, critic and former head of Cahiers du Cinema.

“But it’s important to realize this situation is not a fatality, that it can remedied by politics, economics and activism making diverse films as well as education and culture easier to access.”