The media is pushing the throughline that the muted sales and lower prices reported to date at this year's festival are because the films have been just "meh." In my opinion, the more mellow market is a function of several factors:
1. Distributors have learned to hang back and unite — not in a traditional collusive sense, but because they've been burned in the past and now know better than to fall prey to the festival's second-best commodity, hype, and its third, hysteria.
2. Recent box-office numbers prove that theatrical domestic release is but one, and an increasingly minor, source of a film's total revenue. Foreign markets remain strong, and the growing VOD and streaming markets continue to vie for their share. These are typically sold at the various film markets over the year (Cannes, Toronto, AFM).
3. Thanks to digital cameras, and advances in editing software and sound, key costs of production have decreased, while the quality of the final films have improved — making it possible to make a film for less money, with fewer people and less equipment. Distributors know they don’t have to pay as much to cover production costs.
4. Internet and mobile apps can now exhibit or stream content for free, cutting out the exhibitor or movie-theater experience or rarifying it.
5. Most important, artists are beginning to realize that they have leverage that they did not enjoy before owing to the high cost of film production. This will allow artists to retain more and more of their rights, more creative control, and more participation in the revenue of their films. Increasingly, I predict, directors and producers will make films for less money; retain more equity in their films; make more aggressive deals with distributors; exhibitors, and streaming platforms; and enjoy more of the profits derived from their content rather than forfeiting the rights to their equity up front.