Some 46 years ago, a budding rights-trader pursued the German television rights to Federico Fellini's La Strada, borrowing 25,000 Deutschmarks from his wife in order to complete the acquisition and kick-start what would much later become one of Europe's pivotal media empires. Today, the $6bn debt albatross that now hangs around the neck of that stealthy buyer, Leo Kirch, is one of the reasons why the independent film business arena has sunk to one of its cyclical low-points.

From Germany to Australia, networks are in no mood right now to hoover up feature films in the quantities that marked the first flush of privatised television channels across the globe during the 1990s and ignited the revenue growth of films sold outside the Hollywood distribution infrastructure. Territorial prices being offered for film rights are dropping as a result.

Free over-the-air broadcasters have seen a sharp downturn in television advertising, while their subscription-based rivals are struggling to see any money at all after paying for their guaranteed streams of Hollywood hits at fee scales that bear no relation to their monthly audiences. Kirch's Premiere World, for example, is now haemorrhaging around $2m each day, a situation causing some sleepless nights for all those German independent distributors still waiting to collect on their Kirch receivables.

Kirch is not alone. The situation in Australia was dire enough for Kim Williams, the new chief executive of that country's dominant pay-TV player Foxtel, to publicly call upon the Hollywood studios that supply his industry to stop 'pricing us into oblivion'. Addressing the Australian Subscription Television and Radio Association conference last week, Williams said the studios "have no right to stop the growth of the industry" and predicted a wave of re-negotiation ahead to achieve a more rational pricing framework.

It is against this atmosphere that the American Film Market took place in Santa Monica this week and last. International box office grosses may be steaming ahead and DVD sales now rocketing world-wide, but television's disinterest in anything but bona fide theatrical hits kept most foreign buyers back from offering top dollars for anything other than no-brainer breakout propositions. At least for now.

"Things aren't that bad," offered Rick Sands, chairman of worldwide distribution at Miramax, echoing the thoughts of those hoping to see improved buying conditions around the corner at events such as Cannes. "Buyers are going to run out of product soon enough and so are TV stations. However, there is much more pressure on the films to perform well theatrically because only then will TV buy the movies."

In the meantime, Miramax has decided to hold off selling to territories such as Germany where bids have reached bargain basement levels and wait for a recovery. "Buyers were trying to push the prices down and so we were faced with the question of do we sell at a reduced price or do we wait until the marketplace allows us to sell at a fair price."

But other companies, suggested Sands, may not be able to afford that same negotiating luxury. "Those companies that have obligations to banks to fulfil, need to sell their product, but I am not forced to make those deals." In fact, Sands sold just three movies to Germany (see compendium of AFM deals in this week's Screen International weekly edition)

By any measure, corridor business was slow at AFM's host hotel, The Loews. There was a 5% drop in the number of registered companies and a 9% drop also in registered individuals, both according to AFM's own official body-count. More anecdotally, coffee sales were also down in the main lobby where hundreds of unregistered attendees are free to mingle and make their pitches.

There was evidence too that sellers were once again insisting on letters of credit from buyers before licensing their films: in a business that depends on keeping good relationships with talent, it simply doesn't pay to sell high to an overly ambitious distributor who then goes bust. Nor was there great interest among premium sales companies in continuing to deal with rights-broking middlemen as opposed to selling directly to theatrical distributors skilled in releasing and marketing to their local cinema-goers.

That is not to say, new buyers are being shut out completely. Andreas Fallscheer's Falcom, for example, was able to secure German rights to a brace of Miramax titles: The Guest and Pinocchio. France's Wild Side Films, a new distribution partnership between former StudioCanal executive Manuel Chiche and Bac Films' Jean Labadie, acquired a pair of titles from Spain's Filmax Second Name and Oblivion both of them by first-time directors. And UGC Films UK added Mike Leigh's All Or Nothing to a debut UK theatrical slate that already includes Francois Ozon's 8 Femmes.

Other upstarts also popped up on the scene. Star TV revealed plans to create a pan-Asia distribution network that would release films across the continent under the Fortune Star Pictures banner. Under its general manager Peter Poon - the architect of Media Asia's distribution alliances in south-east Asia - Fortune Star wants to use Star's 38-country reach as a theatrical promotional tool for a release slate that would rely initially on in-house co-productions. Here was a case of TV itself stepping into the theatrical breach, rather than waiting on others to feed its airwaves with theatrical titles.

Star TV's initiative highlights one of the brighter spots on the international marketplace, namely the growing the commercial returns on Asian films, at their current budget levels. Cinema Service has secured its best ever price for a Korean film sold to Hong Kong, when it sold Volcano High to Media Asia Distribution for more than $130,000. Cineclick Asia sold Japanese rights on female gangster tale My Wife Is A Gangster to KNACK for around $1.75m not far short of the film's $2.4m published budget. It also sold English-language remake rights to that picture to Miramax, and to its martial arts comedy Hi Dharma to MGM for an estimated $300,000.

The rejuvenated interest in Hong Kong cinema is also encouraging the UK's Medusa to venture back into the theatrical business. The company acquired all European rights to Miike Takashi's Ichi The Killer from EMG and is now planning its own theatrical release in both the Netherlands and the UK (where it has not released a film in cinemas under its own name since 1994), as a prelude to a big DVD push.

Sun Distribution Group, a new Latin American buying consortium, claimed it made offers for all Latin American rights to as many as seven of the largest films at the AFM - although the Buenos Aires-based distributor had yet to confirm any completed purchases at the time of going to press.

Sun said it was targeting titles with budgets ranging from $50m-$80m from the likes of Intermedia and Icon, but only at what it considered to be fair prices commensurate with local market conditions. "We've made realistic offers based on the current situation in Argentina as we wouldn't want to renegotiate later," explained Sun CEO Diego Halabi. "P&A costs are rising and net income per admission is currently $1, down from $1.40 in Argentina. However, the rest of the region has not been as badly affected as anticipated."

Whether there were even that many decent projects available at that budget level at the AFM was arguable. Films such as Summit's Insomnia and Intermedia's Basic had both been unveiled at previous markets and have now finished sho