Attendance down at showcase for independent films. (Media & Technology).

Consolidation among foreign distributors and the sluggish international economy have thinned the crowds at the world's largest film market ending this week in Santa Monica.

The American Film Market, now in its 21st year, boasts more exhibitors (342) and more screenings (408) than in 2001, but the number of attendees at the eight-day event at the Loews Santa Monica Beach Hotel is expected to be down 7-8 percent from last year, when 7,000 people attended.

Organizers attribute the decline in attendance primarily to economic factors, but a lingering fear of travel is also keeping some buyers away. Though some American distributors attend, AFM is primarily a foreign marketplace for U.S producers.

"I'm finding it a little slow, but we are just getting started," Claudio Ulrich, chief executive of the Swiss company Eagle Entertainment, said last week.

"It's different now than it was 10 years ago. Prices are set and there is not as much deal-making," Ulrich said. "Sometimes you make a good deal, but it's still important to come because this is the kind of business where you have to show your face and let people know you are there."

Despite a drop in attendance, organizers say they expect to see upwards of $500 million in licensing deals, about the same as last year. A growing appetite for independent fare and for new titles on DVD continues to make AFM one of the industry's important events.

The phenomenal success of independent films in recent years -- independents have won 10 of the last 19 Best Picture Academy Awards -- has helped raise the event's stature. Successful independent films released last year included "Lord of the Rings," "Gosford Park" and "Ali."

In addition, the trend by major studios to produce fewer films and operate more as distributors and marketers has made AFM even more crucial for foreign buyers, said Jean Prewitt, who joined AFMA (formerly the American Film Marketing Association) two years ago as president and was promoted to chief executive earlier this month.

"It's becoming more unusual to see films that only have a studio credit," Prewitt said. "We are not just a certain type of film. It's our great mix that really makes the market."

Slow start

Many attendees remarked that AFM seemed to be getting off to a slow start, a notion that clashed with the veritable United Nations hanging around the lobby of the Loews and the hundreds of participants spilling out onto the nearby Third Street Promenade for screenings.

"When things are really percolating, you see people rushing through the corridors, trying to be the first one in," Prewitt said. "That's what we hope to see."

Rolando Shama, chief operating officer of Argentina-based theatrical distributor Difusion SA, said slow starts are business as usual at AFM.

"I think it's a good market this year, with good product," Shama said. "What usually happens is at the end of the market you close up all of the things you have been working on."

Like Ulrich in Switzerland, Shama said more than 90 percent of the films distributed in South America by Difusion are English language. So, despite the economic problems and political upheaval that has halved the value of the Argentine peso in the past few months, Shama said he was eager to buy.

Troy Lum, a buyer for Australian theatrical distributor Dendy Films, said he liked the business first atmosphere at AFM, as opposed to the glamour-conscious festivals such as Cannes.

Independent, not small

It's common to confuse an independent film with a small-budget, or art-house film. In fact, an independent film is defined as one in which 51 percent of the production costs come from a non-studio company. By that definition, 49 out of 101 films that received wide theatrical release in the United States in 2001 were independents, even though many of them had studio backing and distribution.

AFMA's 150 members represent a variety of production companies and distributors ranging from relative unknowns like Beverly Hills-based Myriad Pictures to major independents affiliated with big studios like Miramax and Artisan Entertainment.