The 60th edition raised expectations but the festival and market succeeded because Cannes concentrated on what it has always done best. Michael Gubbins and Mike Goodridge report.

The merchandising, and particularly the ubiquitous poster, made sure no-one forgot it was the festival's diamond jubilee. But there was a commendable refusal to wallow in nostalgia, and the 60th events rarely slipped into kitsch. Even the specially commissioned multi-director series of shorts, Chacun Son Cinema, turned out to be largely a triumph. If anything, the emphasis was on the future. The message was clearly that Cannes intends to be at the forefront of change.

The market opened with a packed conference about the impact of digital technologies on audiences; and the final Saturday's Europe Day was devoted to bringing together political leaders and film-makers to look at the future.

The films
Where this year absolutely had to succeed was in the selection of films. In recent years, the quality of official selection has varied widely, attracting criticism for both flirting with the populist and too much uncritical loyalty to established auteurs. But the 2007 edition looked and felt like a festival at the peak of its powers. Masterpieces may have been thin on the ground, but the overall quality was about as good as it could get for a festival (see p27 for festival round-up).

The delight was that the event was largely turkey-free. The critics' boos for James Gray's Competition entrant We Own The Night towards the end of the festival were more the result of being spoiled by the quality of some of the previous films than any fair reflection of the film's worth.

The Palme d'Or went to the right film in Cristian Mungiu's 4 Months, 3 Weeks & 2 Days, a rare match with Screen's influential critics jury.

The themes
Some clear themes arose from the market. 'Like it or not, the English language has become a universal language,' Dan Glickman, chairman of the Mpaa told Screen during a whistlestop visit to Cannes.

It is a statement that is bound to raise hackles but the market reflected that linguistic dominance. The US private-equity boom brought with it a deluge of new English-language product that threatened to choke up distribution schedules.

When it came to tentpole pictures, buyers were happy to pay over the odds for A-list titles such as Roman Polanski's Pompeii at Summit, Joel and Ethan Coen's Burn After Reading starring George Clooney and Brad Pitt from Focus, and James Mangold's 3:10 To Yuma starring Russell Crowe at Magnetik Media. For those engaged in such business, it was a vintage year. 'It's been the biggest Cannes ever for Summit,' said Summit Entertainment chairman Patrick Wachsberger. 'The record was 2003 and we beat it.'

IM Global, on its Cannes debut, saw a roaring trade on its Untitled Larry Charles Project - the next film from the Borat director.

Meanwhile studio buyers were furiously busy picking up territories. Newly aggressive Sony Pictures Entertainment was on a hot streak, picking up multiple territories on projects including Legion, Smashing Machine and The Long Good Friday. Universal Pictures International picked up a slew of rights on Walden Media's Nim's Island from Summit including UK, Australia, Spain and Latin America.

The squeeze
With big English-language projects at one end and small local-language product aimed at the local market at the other, the slots available to foreign-language titles were squeezed at Cannes, 'It's brutal,' said QED International sales chief Kimberly Fox.

'There are lots of equity pictures in the market,' said Kimmel International's head of sales Mark Lindsay. 'Selling into Japan is tough. You can't date anything before the end of 2008 and even 2009. Local product is taking a bigger piece of the market.'

The squeeze was impossible to ignore. 'We're going up against local films that get as much of a market share as the studio films,' said Greene- Street Films International's chief Ariel Veneziano. 'Your average script with OK cast and OK subject matter isn't going to cut it. You have to have something that stands out.'

Even the stand-outs were not finding life easy. 'Italians are still seeing American movies,' said Maria Grazia Vairo, the head of acquisitions for Italy's Eagle Pictures, 'but the real difficulty comes in finding a place for European films.'

Asian territories made the same analysis, although buying patterns are not uniform. 'The trends change,' said Young-joo Suh, head of Cineclick Asia. 'Some countries get better and some worse. Right now we're not getting any sales to Hong Kong, and Japan is definitely not as good for us as before, but Thailand and the rest of South East Asia is coming up so the territories complement one another.'

There is also a change to business patterns in response. 'As local films get stronger, as in the instance of Japan, we've noticed buyers get more pro-active,' said Erica Nam, head of international sales at KM Culture. 'Instead of simply buying a film, they will look for investment and co-distribution opportunities as well. Different territories are sharing markets - we' re seeing China-Japan-Korea co-productions, for instance.'

The official selection
Competition films, even the most challenging ones, were the exceptions to the rule on sales, demonstrating the vital role of festivals. Making the official selection at one of the major events has become a commercial imperative.

Several titles in the main sections earned US domestic deals. Miramax struck a deal with Pathe International in the region of $3m for best director Julian Schnabel's French-language The Diving Bell And The Butterfly. Columbia Pictures paid $11.5m for James Gray's We Own The Night, believed to be a record domestic sale for a Cannes Competition film; IFC Films picked up Wild Bunch's Romanian Palme d'Or winner 4 Days, 3 Weeks & 2 Days and Films Distribution's Taiwanese Un Certain Regard opener Flight Of The Red Balloon; Sony Pictures Classics took the Un Certain Regard hit, Israeli comedy The Band's Visit, from Bleiberg Entertainment, while Roadside Attractions picked up the Directors' Fortnight Lebanese melodrama Caramel from Roissy Films.

The non-US market was also very robust - see for details of sales.

Cannes 2007 served as the perfect bellweather for the industry, highlighting the questions the industry is now asking. How can mid-size projects claw back market share' Will digital help deliver them to audiences' And is Romania the new creative hotspot'