Cathy Overett of New Holland Pictures attended AFM, Los Angeles, USA from 4-11 November 2011.

Market Trends

Feeling at the end of AFM: sales were solid but not spectacular, particularly given the high level of sales earlier in the year at Cannes. Our film, Iron Sky, made two sales – France & Japan - and received a number of other offers still in negotiation.  Japan has rebounded strongly, Russia's pricing has become attractive for sellers, and China and Brazil have become increasingly significant (China used to buy at $10,000, now can be $1m). But the European economy hangs overhead as a bit of a cloud.

I attended the Finance Conference on 4 November. Key points:

• The finance model remains presales, soft money, gap and equity.
• TV has dropped out, DVD in decline, VOD is up and subscription VOD has replaced pay TV. So on average, about the same.
• 1 iTune sale is equivalent to 3 video rental revenues because there are less costs.
• Theatrical. Digital delivery is not making it any cheaper than film because they are having to pay virtual print fees to aggregators.
• Presales are still strong for the right projects.
• Banks are still nervous.
• Gap: pre GFC, 35-40 banks did gap. Now 10-12, with only 6-8 active. Same bankers, new banks.
• Investors (in the US at least) are back because they’re not making money in real estate any more.
• $20m+ films with stars are very strong. The studios are making fewer films so there is not enough good product, making it competitive at this end of the market.
• The lower level is having trouble.
• Star salaries, at least at 2^nd tier, are down because there’s less work.