Film buyers are not easily impressed. They like to bemoan the lack of inspiring new product at markets. Their plaintive cries have been particularly loud this year and to be fair the familiar gripes that echoed through the corridors of the Loews and Le Merigot hotels at last week’s AFM did so with good reason.

It has been widely reported that Hollywood is recession proof, but what people really mean to say is that film-going is recession proof. Audiences are prepared to fork out on the price of, say, two tickets, food, travel costs and a babysitter because it is still cheaper than paying for many other forms of entertainment. But the films on offer have to be appealing, and therein lay the crux of the problem for certain companies at the AFM.

The credit crunch had already been savaging corporate models by the time the global economic meltdown took hold a few months ago. Earlier this year Warner Bros all but announced it was exiting the specialty business with the closure of Warner Independent Pictures, Picturehouse and New Line, while the end of ThinkFilm plus Universal’s imminent move to sell Rogue Pictures to Relativity Media have highlighted the fact it is notoriously tough to recoup money on a small release.

Top of its game

If it is hard for smaller, studio-backed projects to succeed, the prognosis for lower-budget independents is bleak, particularly in view of a shrinking hedge fund and equity investor base.

As a result, the likelihood of getting projects into production has diminished, making it harder for sellers to be competitive. Summit has remained at the top of its game for years with exceptional product and all eyes will be on the performance of Twilight when the vampire tale opens on November 21. A good result, which is widely expected, will deliver a strong signal to the independent business that there are opportunities with the right product.

Accordingly, the AFM was a story of the haves and have-nots as powerhouse sellers with costly product such as Summit International, Mandate International - buoyed by supply partner Relativity Media - Focus Features International and Nu Image/Millennium reported brisk business, while smaller companies felt the pinch.

Stallone entertains buyers

Buyers seeking to fill first and second quarter 2010 slots responded positively to Summit’s $85m The Book Of Eli starring Denzel Washington and Gary Oldman, Nu Image/Millennium’s Sylvester Stallone mercenary action film The Expendables with Jason Statham and Jet Li and GK Films’ Edge Of Darkness with Mel Gibson. Edge Of Darkness is in production while the other two titles have major cast and directors in place and virtually sold out months before shooting was scheduled to begin.

Nu Image/Millennium paraded Stallone at a lunch presentation at Santa Monica’s Boa steakhouse. While Avi Lerner’s unassuming style did not exactly smack of Harvey Weinstein on the Croisette, nobody can doubt his overall business smarts and his wise decision to leave the entertainment to the entertainer on the day. Stallone turned it on and by the end of the event dozens of distributors, among them a healthy domestic delegation comprising senior executives from Lionsgate, Overture and The Weinstein Company, left with smiles on their faces.

A cast and director are two of the four key boxes buyers want to tick before they commit to a project, the others being script and start date.

This was not always the case in the past, when deals were often done on the basis of a screenplay alone. As Paramount Vantage International sales chief Alex Walton, who virtually wrapped up pre-sales on the crime thriller remake 13 to star Mickey Rourke, Statham and Sam Riley, points out: ‘It’s very rare that you come to a market with just a script these days. We tend to hold back until we have more elements in place.’

The Weinstein Company announced it had sold out Rob Marshall’s musical Nine, while Hyde Park International was happy with the response to its slate. So was Mandate International, whose roster features Smoke House and BBC Films’ dark comedy Men Who Stare At Goats, which Grant Heslov is shooting in Puerto Rico with George Clooney and Ewan McGregor. Focus Features International was talking up the cha cha cha project Biutiful, to be directed by Alejandro Gonzalez Inarritu with Javier Bardem in the lead, while Lakeshore Entertainment unveiled no new product, choosing to service existing relationships and hold informal talks about future opportunities.

Jere Hausfater’s Essential Entertainment experienced a subdued start to pre-sales on the new spy thriller Cold Light Of Day because casting is not in place. Scott Wiper wrote the screenplay and will direct and Hausfater, who also showed footage from Richard Loncraine’s period comedy My One And Only with Renee Zellweger and began pre-sales on the Clive Barker horror tale Dread, is looking ahead to brisker business in Berlin, by which time he expects to have more elements in place. At no time has it been more advantageous to have completed product.

Stuart Ford sold out IM Global’s supernatural thriller Paranormal Activity, a low-budget gem that launched at Slamdance earlier this year and is owned domestically by DreamWorks. Ford staged an event screening at the Laemmle Monica 4-plex with more than 200 buyers and delivered the coup de grace when he bussed in hundreds of youngsters. Their gleeful response prompted multiple offers on a raft of major territories. ‘The buyers loved it and the fantastic thing was they saw the audience reaction because it was right in front of them,’ Ford says.

Buyers were on the back foot because of the resurgent US dollar and as a result certain sales agents lowered their asking prices. ‘Pre-buying is risky,’ says one executive at a European distributor. ‘You’re selling to TV in 2010 and what will advertising look like then”

That said, other sales agents chose not to revise their estimates and speculated optimistically about more favourable exchange rates by the time of delivery 12 or 18 months down the line.

‘Insane’ prices

This wasn’t to everyone’s liking. ‘Prices are way too high - it’s insane,’ says Pim Hermeling of Wild Bunch Benelux Distribution, adding that sales agents were asking up to $1m for Benelux rights for select arthouse fare. South Korean buyers were suffering, too. ‘The dollar has gone up 30%-40% to the Korean won since Cannes but sellers have kept their prices up, making it harder for us to close,’ says Megabox’s acquisition executive Kyungik Jang.

According to anecdotal evidence, buyers from Spain - where credit is extremely hard to come by - Italy and Latin America were finding it tough going, while their counterparts in the UK, France, Germany, Australia, Scandinavia and Benelux were actively acquiring product. ‘If you’ve got the right product, people will come and see you,’ says Intandem Films Billy Hurman, selling Tommy Lee Jones’ upcoming Ernest Hemingway adaptation Islands In The Stream.

Distributors were also seeking assurances that projects would simply get made. In the current climate of financial insecurity, with banks freezing credit and pre-sales no longer the mechanism that can always be relied upon to kick-start financing on a project, other parts of the jigsaw are coming into play.

‘It’s all about getting wealthy individuals on board,’ says one leading agent closely involved in packaging a slew of projects at AFM. ‘If you have that kind of resource as well as some gap funding you’re going to be fine.’

And so Bold Films, backed by the European industrialist and entrepreneur Michel Litvak, was in bullish mood over its Joe Dante horror title The Hole and the thriller Jack. Bold certainly threw the most lavish party in a market not renowned for festive flair, while other familiar faces opted for more intimate soirees if indeed they did anything at all.

Glen Basner was in town with a new company to start talks on Devil, the first title from MRC and M Night Shyamalan’s Night Chronicles joint venture. Basner’s FilmNation Entertainment is backed by investors including Steve Samuels and the veteran sales agent is very clear about the direction his new venture will take. ‘I want to get out of the volume business and operate with a consistent flow of product where every film is taken on the basis of its merits,’ he says.

This conservative approach to business modelling is what drives prudent entities such as Martin Shore and Christopher Tuffin’s Social Capital, whose Edgar Allen Poe adaptation Tell-Tale is being handled overseas by The Steel Company. Social Capital plans to make two to three films a year and wants to build value by developing a manageable slate that works because the numbers add up and titles actually go into production.

Financing entities Barbarian Films, Oceana Media Finance and Magnet Media Group put together the financing for 13, while Cold Light Of Day backers Intrepid Pictures previously got the horror hit The Strangers off the ground. All these companies were in evidence at the market and, if they can execute well and make good choices about content, the business stands to benefit.

‘Some companies will perish over the next two to three years, but those that survive will have a bright future,’ UK Film Council chairman Stewart Till told a reception. The financial collapse that started in the US has sparked a correction, Social Capital’s Tuffin said recently.

Who stands and who falls depends on who can stay disciplined in an industry famous for dreamers and big talk.