Ahead of Cannes, Film Market Pre-Sales May Be Down but Not Out

variety.com:

Angus Finney Penning a premature obituary is an occupational hazard that goes with the territory of film industry analysis, and there are few topics that attract such hand wringing as the alleged “death of the pre-sale.”While the execs headed to the Cannes Market have seen major disruptions in the past decade from technology and pandemics, industry insiders say it’s a little too early to play “Taps” on this market mainstay.Legend has it that the concept of indie movie “pre-sales” was invented in the early 1970s by the financial wizard John Heyman, a man no doubt worthy of a role in one of his award-winning son’s “Harry Potter” productions.

Bankrolling upfront distribution commitments for indie titles — or “turning paper into gold” as one veteran puts it — was a magician’s trick not lost on a hot sellers’ market in those heady times.

To understand the evolution of pre-sales requires taking a step back in time to understand how the world has shifted gears. Epoch one was marked with the arrival of the VCR, marked by VHS winning the living room tape wars starting in the late 1970s.

The new horizontal rights offered by video allowed sales companies to pre-sell “video” as a separate bundle, holding theatrical and TV to sell later, or vice-versa.Whichever way, producers and sellers made out like bandits. “The genius at this was Arnon Milchan, who, like the very best producers, made sure he went to all the markets,” recalls Mister Smith Entertainment’s David Garrett.Epoch two was the advent of DVD in 1997, arming distributors with a license to print money.