Jonathan Wolf

Managing Director, American Film Market
Executive VP, Independent Film & Television Alliance

The 30th American Film Market (AFM) began yesterday and runs through November 11. This year’s edition hosts a record 80-plus newly accredited acquisition companies, more than double the number of first-time participants compared to most previous years. The number of exhibitors has dropped, from 412 last year to 369 this year, representing a 10-percent decrease. As Jonathan Wolf explains, the consolidation that has hit the independent film market is not necessary a bad development.

WS: What mood do you expect at AFM this year?
WOLF: The mood really depends on who’s coming to the market. Some companies are coming to sell a film that we’re world-premiering at the market, that has tremendous commercial potential and they’ve been teasing buyers with a tremendous sense of excitement and anticipation. Another company at the opposite end of the spectrum that has no new films and is attempting to sell some non-theatrical product that was first screened six or eight months ago is probably coming with somewhat [different] their feelings.

There are some buyers who have a steady flow of product from committed distributors, so they are looking for whatever deal they can make on the remaining product they need and they will be very selective.

And you may have others buyers, who, following the pull back of New Line and other companies, are short of product and are coming to buy more. You have companies that haven’t been buying for a while because of economic uncertainties and are now saying, I have to buy, because remember, if you are a distributor and you have no product, you are not a distributor—whether it’s video or theatrical or even a broadcaster.

WS: You have a quite diverse constituency coming to the market—is it difficult to serve all of them?
WOLF: No, it isn’t and that is because IFTA, the Independent Film and Television Alliance, whom I work for, is the trade group of most of those companies. We have a diverse membership and have had for 30 years. So the culture that we work in—not for just the eight days of the market, but year-round—is very diverse. If you look at our board of directors you can understand that diversity—everyone from our chairman Lloyd Kaufman (Troma Entertainment) and our vice chairman Roger Corman (New Horizons Picture Corp.) to representatives from Summit Entertainment or QED International or E1 Entertainment or Lakeshore. Our membership and our governance really mirror what happens at the AFM, it’s the culture we work in.

WS: What impact has the financial crisis and the subsequent credit crunch had on independent film companies?
WOLF: Last year I said there were too many films and too many companies. If the liquidity crisis did not take place, the marketplace would have pushed out a number of companies because you can’t double the amount of films that are being made and expect the consumer to watch them and spend money on them. We expected this bubble—and that is the best word to use—this bubble in production to burst. We didn’t know what would cause it, none of us knew that it would be the credit crunch, but the bubble had to burst because supply and demand was out of balance and it needed to be realigned.

We will see about 20 percent fewer films screening this year compared to last year, and that will bring us back to the level of about 2004, which is probably where the industry needs to be.

During the last ten years we had more money coming into the industry than at any period in time. We had the dollar reaching all-time lows so exports should have been high. We had soft money from tax subsidies from all over the world. Cultural subsidies were at an all-time peak. There was money available through hedge funds and through wealthy investors. The presales market through the early part of the decade was still healthy. This should have been a renaissance period for the indie-film sector. Yet we’ve heard for the last three or four years the woes of the industry. And this is really because what makes the industry successful and profitable is not the access to production financing, but it’s a balance of supply and demand tied with great filmmaking. You can never leave out the fact that the product has to be good.