Why 2025 festivals prove Cinema’s market is collapsing

There is nothing more absurd in 2025 than watching a room of exhausted festival-goers clap for fifteen minutes straight, pretending their applause is a substitute for money. It isn’t. Applause doesn’t finance films, ovations don’t close deals…and yet every headline this year from Sundance’s cautious buyers to Venice’s obsession with “standing-ovation minutes” has paraded noise as though it were proof of life. The truth is brutal in that the global festival circuit has become a hall of mirrors, where hype reflects back on itself while the market underneath caves in. If you strip away the confetti and the PR spin, this has been the weakest year for festival-to-distribution conversions in over a decade. Festivals have turned into hollow showcases, and 2025 is the year that proves cinema’s market isn’t in recovery…it’s in freefall.

Film festivals once meant something. They were where distribution deals sparked careers, where financiers tested risk, and where applause could translate into market confidence. In 2025, that equation is broken. From Sundance in January through Toronto in September, what we’ve seen is a showcase of noise without return, ovations without outcomes, and a system where optics stand in for business. 

This isn’t just a bad cycle, it’s symptomatic of a market in retreat. If anything, 2026 looks poised to double down on the hollow spectacle.

Sundance

Sundance has always been the bellwether for independent cinema, but in 2025, the snow fell on a marketplace that refused to thaw. A handful of deals happened. Neon’s $17 million buy of Together stood out as a rare swing, A24 put $8 million behind Eva Victor’s Sorry, Baby, and Twinless managed split distribution through Lionsgate domestically and Sony abroad. However, by April, only 19 films had U.S. distribution, down sharply from 30 the year before and far from the 38 acquisitions logged in 2019.

The implications are stark. Sundance used to mint acquisition stories overnight with CODA at $25 million to Apple was less than 5 years ago. Today, buyers hover, hedge, and retreat. Distributors know that indie theatrical is still limping, with summer grosses projected at $3.5 to $3.7 billion, well below the $4 billion benchmark. The outcome is predictable in that films come out of Park City with headlines, not homes. It’s the clearest sign yet that visibility has lost its connection to viability.

Berlin

Berlin posted big numbers this year: over 330,000 tickets sold, 35 international projects curated for the Co-Production Market, and a slate that on paper looked strong enough to spark confidence. Some deals happened—The Ice Tower picked up U.S. and U.K. distribution, What Marielle Knows secured German release and sales representation. These are wins, but narrow ones.

Berlin looks like a festival that wants to prove it still matters commercially, but the reality is softer. A record number of tickets doesn’t mask the fact that actual acquisitions are minimal. It feels like Berlin is fighting to hold onto its identity as a bridge between art and commerce, but the bridge is sagging. The optimism I sensed was more about optics than outcomes. I can’t ignore the impression that co-production markets are becoming talking shops unless there’s capital behind the curation.

SXSW

SXSW has always been a playground for discovery, where music, film, and tech collide. But this year, it was also a mirror for how disconnected creativity has become from commerce. The screenings buzzed, premieres were lively, and yet the acquisition market was practically silent. No meaningful distribution story emerged. SXSW remains an incubator of innovation, but without buy-side appetite, innovation just floats in the ether.

The reflection here is brutal: festivals that don’t have built-in market mechanisms now risk becoming creative showcases without commercial consequence. Energy doesn’t pay back investors. Discovery without distribution doesn’t sustain careers. SXSW exemplified how quickly a festival can feel important while producing no financial footprint at all.

Cannes

Cannes is always theater—political, cultural, and cinematic. This year was no different. Jafar Panahi’s It Was Just an Accident took the Palme d’Or, Robert De Niro’s comments about Trump filled column inches, and the Croisette swelled with 15,000 industry players. But the deal sheet was thin. Mubi’s $24 million pre-sale of Die My Love was the outlier, Netflix quietly secured U.S. rights to Richard Linklater’s Nouvelle Vague for around $4 million, and Neon/Mubi carved up territories for Joachim Trier’s Sentimental Value. These are not market-shifting sales; they’re calculated micro-bets.

Cannes, for all its glamour, now masks a cautious reality. It remains a podium for prestige, but the commercial undercurrent is defensive. Rising costs and shrinking margins define the conversations in the Marché du Film. Sellers and buyers both know: the old playbook of high-stakes acquisitions and aggressive theatrical rollouts is gone. What Cannes shows is that even at the pinnacle of global cinema, the market is holding its breath.

Tribeca

Tribeca leaned heavy into documentary this year—nearly 60 feature docs, covering icons like Gloria Steinem and Barbara Walters. Attendance was strong, energy was high, and New York embraced the festival as a cultural event. But when you strip away the crowds and panels, no major sales came out of Tribeca. The Creators Market gave visibility to emerging filmmakers, but visibility without follow-through isn’t a business model.

Tribeca’s problem isn’t relevance, it’s revenue. It’s a festival that celebrates culture and storytelling, but it has almost no teeth as a marketplace. I see its value as a platform for voices that deserve to be heard, but I can’t pretend it’s moving the financial needle. For filmmakers counting on it as a launchpad, Tribeca is a showcase, not a solution. For investors, it’s background noise.

Venice

Venice thrives on prestige and awards positioning. It did so again this year. Werner Herzog’s Ghost Elephants sold to National Geographic. François Ozon’s The Stranger found a UK buyer in Curzon. Broken English secured an Italian release, while Cotton Queen went to MAD Solutions for MENA. Beyond that, distribution was scarce. Yet the headlines weren’t about who bought what—they were about standing ovations timed like sporting events, as though ten minutes of clapping can offset the absence of capital.

The truth is, Venice’s market function is confined to the Production Bridge: curated one-to-ones, financing programs, and post-production support. These are valuable but limited. For the majority of films, Venice is a spotlight without a sale. The applause is free, but it doesn’t move equity.

Telluride

Telluride retains its magic as a sanctuary for cinema lovers and awards hopefuls. The 52nd edition brought Hamnet, Bugonia, Jay Kelly, and more. The audiences adored them. Critics praised them. And then nothing happened. No significant distribution deals were announced, no buyers rushed in. Telluride has fully embraced its identity as a prestige platform, not a sales forum. The films that play there may go on to Oscars, but for most creators, Telluride offers cultural cachet without commercial traction.

The reflection here is clear: awards clout is not market clout. The industry still confuses reverence with relevance, but for those tasked with financing, the distinction is life or death.

Toronto

Toronto has historically been the “people’s festival” and an acquisition hub. Think back to Room or CODA—TIFF was the launchpad. This year, it had the names: Wake Up Dead Man: A Knives Out Mystery, Christy, Good Fortune, Roofman. The anticipation was real. But the deals? Practically nonexistent. The market arm, Industry Selects, offered just ten titles, far below the volume buyers used to expect. Toronto reminded the industry of its potential, but it couldn’t deliver momentum. The slowdown that defined Sundance, SXSW, Cannes, and Venice carried through to TIFF without interruption.

The perspective is sobering: even TIFF, with its track record, has joined the chorus of noise without outcome. Festivals that once meant acquisition pipelines now function as marketing launches, not sales drivers.

The 2025 Pattern

Across every major festival, the pattern is identical. The applause is loud. The press coverage is heavy. The actual distribution and financing deals are thin, delayed, or absent. For a year already defined by weak theatrical returns—$3.5 to $3.7 billion domestic box office this summer, below the $4 billion baseline—the failure of festivals to generate market traction is devastating. Festivals have become optics stages. Investors and distributors are simply not spending at the levels they once did.

2026 Outlook

If nothing changes, 2026 will be worse. Buyers are consolidating. Distributors are reducing slates. Risk appetites remain frozen. Festivals will continue to pull in talent, headlines, and prestige, but the commercial machinery beneath them is eroding. Without a redefined role—one that integrates financing, structured pre-sales, and real market accountability—festivals are on track to become pageants: beautiful, noisy, and meaningless for the balance sheets that matter.

What this year has shown is simple but brutal. Festivals no longer deliver the outcomes the industry has pretended they do. 2025 was the year that revealed it fully. 2026 will decide if the industry learns—or if we keep applauding ourselves while investors walk away.