Cannes Recalibrates: Pre-Sales Shrink, Streamers Stall, and Co-Productions Surge

The 2025 Cannes Market delivered more questions than answers, as industry players navigated, stalled US deals, shrinking Pay-1 licensing windows, and a growing rift between premium and mid-budget titles. High production and distribution costs are driving greater selectivity among studios and streamers, leaving many films without buyers in the North American market.

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Markets of Hesitation: Rising Costs, Fewer Pre-Sales, Strategic Co-Productions

While Cannes still generated global interest in auteur-driven cinema, the traditional fervor of early bidding was conspicuously absent this year. Buyers remained cautious, continuing a trend first visible at Sundance and Berlin. Distribution costs are mounting, and with the threat of tariffs on foreign films rattling financiers, some US presales have stalled or fallen apart altogether. The mood among sales agents was measured at best, and even a $24 million multi-territory sale for “Die, My Love” only served to underscore how few major deals were made, especially involving US rights.

Pre-sales for completed films are still occurring, but rarely at the volumes seen in pre-2020 markets. Sellers have had to wait longer and longer to close meaningful deals, often until after festival premieres or critical reception. Many films that debuted at Cannes — including highly anticipated titles in Un Certain Regard and Directors’ Fortnight — remain without North American buyers. However, activity is expected to pick up in the summer. Studios and streamers are clearly choosing selectivity over speed.

To mitigate risk and retain leverage, more distributors and producers are relying on co-production models. These arrangements offer greater control over international rights, better access to local subsidies, and more appealing packaging for territorial buyers. This approach reflects a growing belief that shared financial burden and regional appeal are key to market success in 2025.

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Pressure Builds on Mid-Budget Sellers as Premium Titles Dominate

Despite pockets of encouraging dealmaking, the overall market tone remains subdued. High pricing expectations for marquee titles like Lionsgate’s “Hunger Games: Sunrise On The Reaping” and A24’s “The Rider” and “The Drama” have cast a shadow over mid-budget titles. In particular, mid-tier UK films have struggled to gain traction.

French buyers—historically key players—were notably more reserved at Cannes, likely due to shrinking Canal+ investment commitments and broader economic pressure on minimum guarantees. The hope remains that Pay-1 windows will resurface later in the year, offering new revenue paths for stalled projects.

Russia, once a dependable market for UK sellers, has all but vanished from the independent film deal flow. However, with political relations softening under the current US administration, there’s growing speculation that studio titles could soon return to Russian screens. If that pipeline reopens, it may revive a dormant revenue stream for independent players—reinvigorating international sales strategies and offering renewed support for struggling mid-budget titles.

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Theatrical Performance Remains Critical

While downstream markets continue to fracture, theatrical performance remains the dominant predictor of long-term value. Buyers across major European territories were united in emphasizing the importance of a strong theatrical showing, not just for budget recoupment, but as a signal to SVOD and Pay-1 buyers still willing to acquire.

Yet theatrical has become more unpredictable than ever. In territories like France and the Netherlands, a winner-takes-all trend has emerged: a handful of titles secure the majority of admissions, while the rest struggle to survive the opening weekend. Germany has seen similar trends, with arthouse releases succeeding spectacularly or disappearing entirely.

Without the cushion of robust physical, television, or transactional VOD sales, the financial pressure on theatrical success is extreme. Distributors are putting more emphasis than ever on launch timing, campaign strategy, and press coverage, not just to drive admissions, but to strengthen licensing downstream.

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Discover What Streaming Services Pay to License Films and Shows

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Genre Certainty and Targeted Pitches Spark Market Activity

UK sales agents, following Cannes, reported a solid—if selective—performance from global buyers. Clear, well-packaged projects with recognizable cast, director, and genre focus were the most likely to secure attention. Buyers continue to favor titles that present a concise, unmistakable value proposition. Projects that “don’t fall between the cracks” are the ones attracting bids, especially those with built-in audience appeal.

This proposition was evident in the robust response to “Strange Journey: The Story Of Rocky Horror,” a documentary anchored in a known IP with loyal fan appeal, which had particularly strong interest from Eastern European and German buyers. The US market, however, remains cautious. With Pay-1 licensing opportunities shrinking and uncertainty clouding major domestic deals, American buyers have shown hesitation—a theme consistent with the broader festival sentiment.

Meanwhile, horror titles continue to outperform and remain a rare theatrical draw that benefits from group viewing. Although some saturation from prior festivals has eased, genre demand is still a mainstay for both traditional and emerging markets.

The UK’s independent film producers are grappling with rising costs and significant market disruptions, primarily driven by the transformative influence of US streaming giants. The UK’s new Independent Film Tax Credit (IFTC) is drawing attention, promising enhanced tax relief for eligible films with a qualifying spend of up to £15 million.

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US Tariff Threats Rekindle European Cultural Advocacy

What began as unease heading into Cannes—driven by proposed US tariffs on foreign films and mounting pressure from global streamers—ended in a surprising show of solidarity among European cultural leaders. The US tariff proposal, endorsed by powerful American guilds and studios, rattled the European film industry, which was already grappling with internal concerns over dwindling public funding and regulatory shifts.

In particular, the European Audiovisual Media Services Directive (AVMSD), which empowers EU member states to impose financial obligations on streamers to support local production, has come under renewed scrutiny. Netflix, Disney, and US lobbying groups are actively challenging its application in regions like Wallonia-Bruxelles, stoking fears of a broader unraveling of European cultural sovereignty. The potential demotion of the Creative Europe MEDIA program in the EU’s next budget further underscored the fragility of institutional support.

Yet, these threats may have unintentionally galvanized the industry, at least in rhetoric. Cannes aims to establish a platform for coordinated resistance, culminating in a unified declaration signed by over 100 film and television organizations, which demands stronger protections for European storytelling.

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FilmTake Away: Cannes Exposes a Changing Playbook

The days of preemptive bidding frenzies are fading, replaced by a more deliberate—and fragmented—approach to international distribution. While premium titles from studios like Lionsgate and A24 continue to dominate buyer attention, mid-budget films face increasingly limited access to key revenue sources such as Pay-1 licensing and minimum guarantees.

Co-productions, curated genre offerings, and strategic territorial sales remain essential tools, but risk continues to shift downstream. With geopolitical tensions, streamer challenges to EU mandates, and the erosion of public support in several countries, the very framework of independent distribution is being redefined. The summer months will test whether delayed deals materialize—or if Cannes 2025 marked the start of a more structural slowdown.

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