News from Cannes. Following the stockholders meeting on Wednesday and later meetings with our auditors, attorneys and key advisors, it was off to Cannes and the film market. After arriving late Thursday, Friday was filled with meetings with filmmakers, international buyers and distributors.

The typical day here begins at 6 am and ends around midnight. With the world film business convening here in Cannes, there are more meetings and screenings of potential product acquisitions than there are hours in the day. The public hears about the festival and the stars, the red carpets and the parties. Behind all of that is the film market, and that is where the business of film takes place. Films are bought and sold, deals are made for future productions and the groundwork is laid for future deals as relationships are made and old acquaintances get caught up.

So far, this year's market is slower than recent years, due in part to the world economic issues and also due to a lack of quality product that the buyers are looking for to fill their release schedules. There are a lot of films available, but most are not up to the quality level that the markets now demand.

With the dvd market maturing and direct to consumer still finding its way, and with the high cost of releasing and distributing product, the need is greater than ever for commercial, high quality product with recognizable talent. It's not so much a function of budget as it is having a good script and getting the most for one's money up on the screen. So the paradox is on one hand you have a glut of product on the market, while on the other hand you have an ever increasing demand for more product that the buyers want and need in order to fill out their release schedules for theatrical, television, dvd, vod and all the other ancillary markets.

With the number of films being released by the major studios being cut back, and with many of the mid-sized companies being acquired or leaving the business all together, the marketplace appears to be reshaping itself into two distinctive segments. On the high end, large budget tentpole pictures with major stars and high concept commercial appeal, while on the low end, horror, action and thrillers that are well made and have some recognizable talent continue to do well. The middle of the road pictures, budgets north of a million up to ten to fifteen million, are in serious peril. Of course, there are exceptions to any rule, but for the most part the first full day here at Cannes has fairly well confirmed this.Dramas without a big name cast, comedies, and romantic comedies are having a tough time at any budget. Movies such as those made by Tyler Perry and others do extremely well in the states, but virtually have no marketability outside of North America.

For Camelot, all of this provides us with a great opportunity to meet the market demand for commercial, high quality films that can be made at a reasonable cost so those that invest in the films have the ability to realize a profit. It also provides us with the opportunity to acquire product and companies that have the same philosophy as we do. To accomplish our goals, we have to remained focused and realize that this is not a sprint, it is a marathon.

Tomorrow we will provide an update on the results of our first two days of meetings here in Cannes.