Buyers and sellers are looking forward to thisyear's Cannes market with cautious optimism.

With LosAngeles' AFM trade fair moving from February to the autumn, the lastsignificant global market was the European Film Market at Berlin. That has lefta long stretch through the spring without an A-list industry gathering, andindependent sellers are looking to Cannes to provide the perfect platform forpent-up demand.

"Ithink the potential for the market in Cannes this year is very high becausethere was a big gap between Berlin and Cannes," says Thorsten Schaumann,head of sales at leading German sales agency Bavaria Film International."We didn't have an event like the AFM, so there will be a greatdemand from distributors looking for new product."

"Thiswill be a good market for sales and pre-sales," says Francois Yon ofFrench sales house Films Distribution. "Since there's been nothingsince Berlin, and there was no AFM this year, buyers need product immediatelyand need to stock themselves up for next year."

Thepre-Cannes jockeying has already seen line-up announcements from such major USsellers as New Line International and Summit Entertainment, while NewYork-based Focus Features will be launching sales on Roberto Benigni's TheTiger And The Snow. TheUK's HanWay Films and Capitol Films are expected to have strong slates,with HanWay selling two Woody Allen films ' his festival film MatchPoint and hisuntitled follow-up.

"Wethink that the market for pre-buying films will be somewhat'faster' this year than it was last year," says Yoko Higuchi,acquisitions and licensing executive at Germany's Constantin Film."In the pre-buy area, the US sales agencies seem to have gathered morehigh-quality projects for Cannes. The quality of the screenplays, overall, issomewhat higher than last year. Thus, not only the Berlinale, but also theCannes market could profit from the February AFM being discontinued."

Theexpanding Fortissimo Films has a bustling, increasingly English-languageline-up, as does Paris-based outfits Wild Bunch and Celluloid Dreams. Celluloidshould be one of several busy French sales agents with exciting films acrossthe various selections.

EuropaCorp'scompetition film The Three Burials Of Melquiades Estrada will most likely do the bulk of itssales during the market, while Films Distribution's Merry Christmas, screening out of competition, isprimed to sell to a US distributor.

StudioCanal'sWong Kar-wai film A Lady From Shanghai, with Nicole Kidman, should also have buyers liningup.

"Thereshould be quite a lot of completed product at Cannes because it's beenalmost half a year since the last big market," adds Nan Wong, deputygeneral manager at Hong Kong buyer Intercontinental Film Distributors."There should be quite a few commercial pictures available as there wasno Mifed last year. Berlin is getting bigger but it's more focused onEuropean and arthouse films and hasn't yet replaced Mifed."

But ifCannes does benefit from the AFM moving dates, the market is expected to berestrained and selective, both in terms of the amount of films buyers acquireand the amount they pay.

Genreproduct, often low-budget, is expected to drive sales once again, fuelled bythe DVD boom. But buyers in many markets, still wary of the carnage of recentyears, have already had some sobering news this year when box office for thefirst quarter slumped compared to the same period last year.

"Ihave a feeling it's going to be very competitive," says CarrieWong, managing director of Golden Network Asia. "It's been a longtime since the last major market and not everyone went to Berlin, so salesagents will be doubling their efforts to create interest in their productamongst the competition. But there won't be that many more buyers. Someof the Asian buyers will be more cautious as box office has dropped in a fewterritories."

In Germany,the TV-driven business is recovering, but the fallout from the collapse of theNeuer Markt is still having an influence. In March, Solo Film was forced todeclare insolvency, and the future of Senator Film still hangs in the balance.One positive, though, is the return of Kinowelt as a customer for moremainstream titles: at Berlin, the company acquired a package of films includingMillion Dollar Babyand Mr And Mrs Smith.

Franceremains difficult to sell to because pay-TV stations have cut back theiracquisitions, at least of independent films. Italy appears to be relativelysteady as a buyer, while Spain has improved only slightly after its TVdownturn. "I still think it's a buyer's market, and thesebuyers are tending to focus on fewer and bigger titles and movies with nicheaudience appeal," says Nicolas Chartier, co-founder of US-based VoltagePictures.

Thosesentiments are echoed by Luc Roeg, head of UK production operation ArtistsIndependent Films (AIF) and its sales offshoot Independent Film Sales."The market is more sophisticated. Buyers can test films more in terms ofcast, budget and director."

Packaging,says Ana Ayesta, Roeg's head of production and sales director, is a thingof the past for most companies. "Once, some sellers might have had threefilms in a package, but now that is impossible," she says. "Buyersare not willing to spend any money on a film they don't want."

There arebright spots, however. New buyers such as Avex and new money are coming intoJapan, while Eastern Europe and Russia are seen as exciting markets, both assources of product and as buyers. The consensus is that, overall, buyers willbe active; it is just a question of whether they will be active enough.

"Buyersare all looking to buy movies, I just know don't how many," saysTim Haslam, chief executive of HanWay. "It depends on their budgets. Theimportant thing is to be top of their list."

Nancy Tartaglione, Sandy George, Martin Blaney, LizShackleton, Jeremy Kay, and Melanie Rodier contributed to this report