In a hard-hitting keynote speech at yesterday's Screen International European Film Summit, film financier Ben Waisbren, who is president and CEO of Continental Entertainment Capital, predicted that the independent film business will go through a prolonged period of contraction and restructuring. 'Don't hesitate - consolidate,' he urged.

Fewer films will be made. There will be increased vertical integration. It will 'take years' for new exhibition windows and technology to 'replace the lost revenue from DVD.'

Lower prices will be paid for territories, P&A funds will grow ever more scarce, and there will be mounting pressure to reduce production costs and back-end participation from talent.

Nonetheless, Waisbren struck a fitfully optimistic note. As film companies become bigger, they will have more market power, and 'ultimately liquidity will return.'

'It's all so manageable - it's not like having to come up with an electric car,' Waisbren commented of the challenges currently facing the film business.

Waisbren listed some familiar woes. The pre-sales market is be near-dead, box-office revenue is declining, DVD sales are plummeting, the banks and hedge funds have fled the film arena and credit for new productions has dried up, but - insisted Waisbren - the industry can still attract capital.

'Dark as it is out there, it is a much better time to be an investor than it was 18 months ago. We all might have felt better 18 months ago but it is simply a better time to be a buyer. Equity valuations have come way down and long-term investors can see a recovery as there always is.'

'There is some good news because the film industry really does have the ability to correct itself growth opportunities for leading independent distributors are certainly there.'

Indeed distributors will have a key role in film production in the future and capital will no longer be put 'behind movies that didn't have a distribution solution locked up.' This will help ease the speciality film glut. 'It doesn't mean that speciality films won't be made, but the gatekeeper is going to be the distributor and his economic projections much more than the hedge fund saying I want to be in the movie business.'

He pointed out that short-term investment won't work but 'that the film industry is resilient. I am convinced that it will adapt over time. Even though 'nobody knows anything', over the long-term, it is an industry that offers great rewards for patience.'

Taking questions from the floor, Waisbren argued that the long-mooted vision of Pan-European distribution network capable of competing with the majors could still be realised. 'The strategy that I think will offer the greatest competitive threat to the majors would be a combination of Pan-European platform coupled with a major independent in the US. I think it is do-able and you are going to see attempts to do it.'

The film financier, who is also a member of the board of directors of Wild Bunch, also defended the way the independent film market operated in the build up to the credit crunch. 'Film is by its nature a rabid consumer of capital. You can't blame the film industry for its nature any more than you can the scorpion (in the) scorpion and frog story,' he reflected.