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Film festivals form the international film festival circuit, a global network that controls some aspects of the international circulation of films and constructs global cinematic space. Film festivals began in Europe during the 1930s and 1940s. However, throughout the 1990s and 2000s, they spread all over the globe.

As a global network, film festivals connect various festivals, film industries, the international press, and people with different interests, such as filmmakers, actors and actresses, producers, international sales agents, local distributors, festival organizers, representatives of the local government, critics, reviewers, and audiences. In relation to the global cultural economy, film festivals play a vital role as cultural institutions and as the key marketplaces for non-Hollywood films in particular. They endow critical values to films that facilitate the transnational distribution of movies via the international art house circuit. Based in global and local cities, film festivals function as transnational sites that offer cultural and cinematic experiences of different parts of the world to audiences, who perform the role of cultural tourists.

The oldest film festival is the Venice Film Festival, which began as the Esposizione Internazionale d'Arte Cinematografica in 1932. The Cannes Film Festival was launched in 1939. It was followed by Karovy Vary and Locarno in 1946, Edinburgh in 1947, and Berlin in 1951. As Julian Stringer suggests, historical evidence shows that film festivals in European countries began as politically charged events. During Mussolini's fascist rule, the Venice Film Festival was used as a venue for spreading political propaganda. The institution of the Cannes Film Festival was the result of the outrage among French intellectuals toward the decision to accord the top prize at the Venice Film Festival to Leni Riefenstahl's Olympia, a documentary film that promotes Nazism and Hitler. The Berlin Film Festival commenced as a showcase of the democratic and capitalist West German society in the Cold War era. During the 1950s, many film festivals emerged in other European countries (e.g., Oberhausen in Germany, San Sebastian in Spain) as well as in the Pacific Rim region (e.g., Melbourne, Sydney, San Francisco, and the Asia Film Festival).

During the 1970s, the Rotterdam, Toronto, and Sundance festivals were introduced.

According to Marijke de Valck, the key transition occurred in the film festival circuit in the early 1970s. Before the 1970s, film festivals, as international cultural events, focused on showcasing each national cinema equally while promoting humanist values and strengthening regional diplomatic coalitions. However, the International Film Festival Rotterdam, for instance, catered to the more serious cinematic interests of cinephiles who appreciate art, avant-garde, and auteur cinema, and made an attempt to discover new movies and talent in the realm of world cinema. More recently, local politicians have recognized the value of film festivals in terms of urban redevelopment projects and the global promotion of the brand image of the host city. As a result, film festivals with specialized themes (e.g., women's film festival, children's film festival) and genre-specific film festivals (e.g., fantastic film festival) have flourished globally, entertaining local audiences more than they have attracted international guests. As the nodal points of a global network, film festivals contribute to local economies by procuring revenue for the touring and catering industries. Film festivals are also connected with the development of local film industries. They promote local films and aid in the development of film-related media industries (i.e., location and post-production) in a given area.

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