Screen International highlights key talking points for the international and US film sectors in 2025.
See here for our UK industry talking points.
What will Donald Trump’s second term mean for M&As?
The years ahead could be a boom period for mergers and acquisitions. The prevailing view is Trump’s incoming administration will be a friend to big business and support deregulation. The president-elect has appointed a Republican, Andrew Ferguson, to chair the US Federal Trade Commission (FTC), which oversees antitrust and consumer protection.
There could be a flurry of media deals consolidating streaming platforms, devalued cable television networks, exhibitor chains, and other assets. Major transactions like the Skydance Media-Paramount Global merger could go through relatively smoothly, unless Trump holds a personal grudge as he does with CNN, which several years ago reported on links between his first campaign and Russia. A third consecutive interest rate cut by the Federal Reserve creates favourable conditions for deep-pocketed private equity players to fund transactions.
Jeff Shell, formerly of NBCUniversal, will head the combined Skydance-Paramount entity and one order of business will be to create a streaming bundle to compete for more subscribers. Comcast is spinning off its networks, and Warner Bros Discovery’s David Zaslav has spoken publicly of his desire for deregulation and is in the process of restructuring his company. He may want to sell assets… like CNN.
Antitrust lawsuits filed by outgoing FTC chair Lina Khan against Facebook parent Meta and Amazon look wobbly now, especially since billionaire founders Jeff Bezos and Mark Zuckerberg have been paying fealty at Trump’s Mar-a-Lago residence. As a footnote, Trump is reportedly considering an executive order to allow TikTok to continue operating despite a pending legal ban in the US. The video-sharing platform has until Sunday (January 19) to find an alternative to its current owner, China’s ByteDance, which has raised national security concerns among US lawmakers on both sides of the aisle.
Will US buyers step up?
With Sundance just a few days away, the activity of US buyers comes into sharp focus. Their travails are well documented. It’s nigh on impossible to compete for a finished film if a studio or streamer is also sniffing around, unless a company has financial wherewithal, a track record of handling films of a certain size, or deep ties with the filmmaker. Even when they do acquire a coveted title, smaller theatrical distributors must contend with an unforgiving theatrical marketplace: the quality of the film, counter-programming release date, and marketing campaign must be spot-on.
Turning to pre-buys, smaller distributors face a dilemma: take a punt early on a project based on the script or early footage, or risk waiting until it’s completed, when they will be bidding against deep-pocketed studios and streamers. Sundance will offer some indication of the appetite, but we won’t get a better idea until later in the year.
A big year for US box office
After the strikes-induced slimmer pipeline of 2024, last year’s North American box office started slowly and rallied to finish the year on $8.8bn, just 3.3% behind the prior year. 2025 needs to be considerably better than last year to reclaim some semblance of post-Covid momentum. It’s stretching things to expect box office will get anywhere near the pre-pandemic heights of $11m, but we’re looking for a number higher than $9bn.
This year’s roster of heavy-hitters kicks off in February with Marvel Studios’ Captain America: Brave New World on February 13. Highlights are expected to include new franchise sequels, prequels, reboots and spin-offs for Jurassic World, Superman, Avatar, Mission: Impossible, Zootopia, Wicked, Fantastic Four and Ballerina, as well as anticipated titles like Mickey 17, Michael, A Minecraft Movie, A Big Bold Beautiful Journey and Sinners. Not to mention breakout hits that nobody’s even talking about yet.
Whither Sundance and AFM?
This year the industry will learn about the fate of two major events on the US calendar. Sundance Institute heads are weighing up three bids to host their festival starting in 2027 and won’t reveal their decision until after this year’s event ends on February 2. Will it be Park City (which will play second fiddle to an expanded Salt Lake City presence), or Cincinnati in Ohio, or Boulder, Colorado? The festival’s publicity team insisted last month the decision was still up in the air.
Then there is the matter of American Film Market (AFM), which relocated to Las Vegas last November after much grumbling about scattered locations in Santa Monica, and inadequate venues. The consensus is the market will return to Los Angeles. The majority of participants seem to want that to happen. The board of AFM organiser IFTA (Independent Film & Television Alliance) has put talks on hold amid the LA wildfires and is expected to pick up the thread in the coming weeks.
Will Californian production pick up?
Runaway production is nothing new for Hollywood’s home state, but there has been rising concern over the level of productions that have chosen to relocate. Frustrated by high costs and the demands of SAG-AFTRA bureaucracy, studios, streamers and independent producers have been enticed by attractive incentives offered by other US states and international jurisdictions, most of which boast deep, experienced crew bases and more affordable economies.
FilmLA just announced that while the fourth quarter of 2024 saw a 6.2% rise in film and television shooting days in the Greater Los Angeles area, last year as a whole was the second least productive of recent times behind Covid-afflicted 2020. The LA wildfires have dented production levels in the first quarter and all eyes will be on whether the region can reclaim its status as a major shooting hub. California Governor Gavin Newsom has proposed to double the film and TV tax incentive from $330m to $750m. The measure will come before state legislators this year and is supported by California Production Coalition, an advocacy group whose members include Raleigh Studios Hollywood & Saticoy Studios and Hollywood Chamber of Commerce.
Or do international hubs now have the upper hand permanently?
The battle to attract US inward investment production is only likely to intensify in 2025 as key countries act amid fears they are being left behind by top tier destinations. The Czech government recently approved an uplift to its production incentive from 20% to 25% from 2025 and now offers a 35% VFX and animation incentive. From February 1, Germany is increasing its rebate to 30%. In the UK, VFX spending in the UK now comes with a more generous rebate of 29.25%, which increased on January 1 from the previous rate of 25%, and is exempt from the overall 80% cap on qualifying expenditure. The growing role of incentives in production was underlined by recent research by the European Audiovisual Observatory, which concluded that it is rising as a share of total film financing while public funding and broadcaster investments are falling.
Will AI find favour in Europe?
Fears about the disruptive potential of AI reached fever pitch during and after the Hollywood strikes. Going into 2025 – and outside of the US – there is a sense there is less apprehension and more of a focus on how AI can be leveraged for the benefit of the industry.
Many in the international sector recognise production costs have ballooned in recent years, hindering creativity and investment in filmmaking. Some now see AI as a way to drive efficiencies, bolster creative ambition and to allow filmmakers to do more with less. For them, the technology will help cut back on boring, repetitive tasks than replacing creatives.
Others believe AI tools could help democratise and diversify the film and TV industry by lowering the barriers of entry for diverse voices. The relationship between the AI and creative industries might also be on track to improve during 2025 as European governments try to bring legal certainty over how copyright-protected materials are used in model training. The UK government, for example, is running a consultation that seeks to drive economic growth by ensuring protection and payment for rights holders and supporting AI developers to innovate responsibly.
Public funding cuts will continue
The outlook is tough for many European and international film festivals in 2025 amid inflationary pressures and government cuts. The cost of putting on festivals continues to rise at a time when cash-strapped governments are reassessing cultural spending. The Berlinale has lost €2m in financial support for its upcoming 2025 edition as part of drastic expenditure cuts by the city government. The Netherlands Film Festival (NFF) has lost its subsidies from the municipality of Utrecht. Meanwhile, the Busan film festival saw its government subsidy from the Korean Film Council (Kofic) reduced by 50% in 2024.
It’s hard for festivals to make up the shortfalls from attendees and exhibitors, many of whom are seeking to curb their own spending which means many are looking for further support from private sponsors and charitable institutions to help make up the shortfalls.
Production budget pressures to continue
Film budgets are likely to remain a flashpoint in 2025. The price of talent and crew means film remains a challenging prospect for many investors. “We have to get back to a stage where they can see a return,” says one producer. “It’s all about trying to get the right budget number.”
Speaking at the MIA market last year, Frederic Fiore, president of film investor Logical Pictures, said his company analysed 800-1,000 projects a year to select around 20 to invest in. “The budget a movie is made for is key to the success for investors.” His company has a slate deal with Pathe to co-finance and co-produce their movies. “One of the drivers is that if a price tag is too expensive, we won’t take it. Even if it might be a success, the upside will be reduced.”
Looking for the light
Buyers in general are looking for lighter and upbeat content rather than very dark films. Often buyers want stories where the protagonists overcome the challenges by the end of the film. Known IP – whether a book, an article or a person’s life – will continue to be in favour too. In TV, commissioners are favouring safer renewals and long-running series over first-run commissions. This comes against a backdrop of the embrace of advertising by streamers. As a result, the streamers have become more broadcast-like, favouring keeping subscribers over customer acquisition.
Lower-cost films and drama are also demand instead of the big-budget productions of the immediate post-Covid era. Licensing has also emerged as a serious force with cost-conscious streamers increasingly happy to pick up quality films and TV dramas rather than funding expensive originals.
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