EFM 2026 Analysis: How Capital, AI, and IP Strategy Are Shaping Film Dealmaking

Berlin in mid-February is freezing; sub-zero air, sharp winds, and red carpets navigated in overcoats. Inside the European Film Market, the atmosphere is anything but.

EFM arrives at a moment when the global film and television business is no longer in freefall, but it is no longer forgiving either; it has found its floor. Commissioning remains at roughly three-quarters of peak-TV highs. Streamer spending continues, but without the frenzy of prior years. Europe’s broadcasters remain constrained. The result is not contraction, but constraint.

An industry scaled for 2021’s output is now operating at materially lower capacity. The friction is visible throughout Berlin in tighter packaging logic, more deliberate IP design, and increasingly disciplined capital deployment.

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The New Steady State: Less Volume, More Consequence

The data presented across EFM’s conference sessions pointed to an industry that has found its floor. Global commissioning remains roughly three-quarters of its 2022 peak, neither declining further nor rebounding. That plateau is the defining feature of 2026.

Within Flatter Landscape:

• Streamers continue to invest, but growth is incremental rather than exponential.
• Broadcaster commissioning is flat or declining, particularly across Europe.
• Sports rights are absorbing a growing share of platform budgets.
• Inflation and higher production costs mean fewer greenlights even where total spend appears stable.

More money in the system does not mean more opportunity per project. It means greater selectivity and tighter underwriting.

At the same time, consolidation remains an undercurrent. Legacy players continue exploring vertical and “diagonal” integration strategies that more closely align production, distribution, and streaming to preserve margins and global reach. The logic is simple: global scale mitigates regional volatility. For producers, this means two things: scale matters, and clarity matters more.

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International Strength vs U.S. Buyer Caution

Berlin has traditionally been a pre-sales market, and that dynamic remains intact. International buyers arrive early in the year with mandates and capital to deploy. Steady Sundance momentum is carrying over into EFM, and recent indie box-office successes reinforce the idea that well-positioned films can still travel.

However, the U.S. distribution outlook remains measured. Domestic buyers are increasingly insisting on finished materials, defined marketing pathways, and demonstrable audience data before committing capital. Star attachments and presale momentum help, but they are no longer sufficient on their own. Risk tolerance has narrowed materially, and underwriting decisions are being driven by visibility into comps, positioning, and spend rather than packaging alone.

This divergence — international appetite paired with U.S. conservatism — is shaping deal structures. More films are closing territory by territory. Fewer are relying on large domestic MGs to anchor financing. Windows and marketing commitments are scrutinized more aggressively than in prior cycles. In this environment, price discovery has become forensic.

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Financing at Scale: Portfolio Thinking Replaces Project Thinking

Perhaps the clearest signal of 2026’s capital mindset came from discussions around slate-based investing.

Equity funds are increasingly backing long-term partners rather than single projects, financing entire slates that meet pre-agreed criteria. The logic is statistical, not emotional. Individual film outcomes are unpredictable; portfolio performance is usually not.

Key Model Features:

• Equity investments covering 10%–50% of budgets
• Avoidance of uncompensated risks (production overruns, counterparty exposure)
• Embrace of performance risk within diversified slates
• Strong emphasis on IP retention

The message to producers was unambiguous: financiers are evaluating track record, infrastructure, and strategic clarity more than they are evaluating loglines. “A hole in the budget” is no longer persuasive. A clearly articulated opportunity with aligned risk-sharing is.

Europe, in particular, is being repositioned as both a cost advantage and a storytelling differentiator — aided by incentives, currency diversification, and global appetite for culturally rooted content.

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Packages Are Back — But They’re Being Underwritten Differently

Berlin is not short on star-driven packages. Projects featuring global talent are circulating widely, and international buyers remain responsive.

What has changed is the underwriting logic. Cast and director attachments generate attention, but buyers now interrogate:

• Territory-level revenue logic
• Window sequencing
• Platform strategy
• Marketing scalability
• Data-supported audience targeting

Recent theatrical performers — from mid-budget commercial plays to specialty hits — demonstrate that audiences will show up when the positioning is clear. But “clear” has become a quantitative term. The days of instinct-led optimism are over. Modeling, comps, and rate benchmarks carry weight in negotiation rooms.

(For those tracking where Pay-1 and global SVOD licensing and minimum guarantee advance levels are actually landing territory by territory, FilmTake’s updated reports offer a useful reference point in this recalibrated environment.)

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Micro-Drama, Vertical Storytelling and Platform Economics

Short-form vertical storytelling, particularly micro-drama structured around one-to-three-minute episodes and freemium micro-transactions, continues to expand in Asia and parts of Latin America. Europe remains a marginal participant, but experimentation is accelerating.

Two Strategic Approaches Emerge:

1. Vertical-native production, designed exclusively for platform-specific monetization models.
2. Format-fluid development, where projects are conceived from inception to move across vertical, horizontal, and feature-length expressions.

The second model reflects a broader shift toward what some are calling “liquid IP” — intellectual property engineered to migrate across formats, surfaces, and revenue streams. In a market where commissioning slots are limited, adaptability becomes a hedge against scarcity.

Yet monetization remains the central tension. Social platforms were built for low-cost content supported by advertising yields that rarely align with premium production budgets. Long-form consumption on platforms like YouTube is increasing, and minimum guarantees are appearing in certain territories, but the balance between reach, revenue, and control remains delicate. Distribution is diversifying. Monetization discipline has not.

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AI Is Not Replacing Creators — It’s Rewiring Workflow

If the macro sessions mapped the terrain from 30,000 feet, the AI discussions drilled into operational reality. The producers experimenting most aggressively with AI are not treating it as a shortcut. They are treating it as infrastructure.

Consistent Themes:

• Scripts remain human-authored.
• AI is deployed for research, visual prototyping, and workflow acceleration.
• The real advantage lies in iteration speed: testing concepts, generating visuals, and refining pitches more rapidly.
• Risk reduction comes from faster feedback loops, not from eliminating creative labor.

Where AI intersects most directly with market logic is in development risk. In a compressed environment, the ability to test ideas cheaply and pivot early carries tangible financial value. AI is becoming a tool for managing volatility.

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The Optimism Question

There is cautious optimism in Berlin, but it is pragmatic, not euphoric. New independent distributors continue to enter the market. Specialty labels are launching. Influencer-led self-distribution experiments have proven that audience ownership can convert into meaningful gross.

At the same time, sports rights continue expanding their budget share. Broadcasters remain constrained. Commissioning volumes are not rebounding. This is not a growth cycle. It is an efficiency cycle.

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FilmTake Away: A New Equilibrium

EFM 2026 does not signal a resurgence. It signals equilibrium. Commissioning has stabilized below its peak. Capital is disciplined. Equity prefers portfolios. AI accelerates workflows rather than replaces creators. IP must travel. International buyers remain active, but U.S. caution persists.

The market is functioning, but only for projects engineered for this environment. In 2021, velocity was the advantage. In 2026, architecture is. And as this cycle matures, the producers and financiers who align structure, data, and adaptability — rather than scale alone — will define the next phase of independent film.

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