Now he is back at the helm of the world's oldest movie showcase, he says that was a strategic blunder as Venice struggles to compete with rivals in Cannes, Berlin and Toronto.

In an attempt to turn the tide, Barbera launched a five-day slot for deal-making and industry shmoozing that he hopes will make Venice more commercially attractive for studios.

"We need to bring back the professionals, we need to bring the buyers back to Venice," Barbera told Reuters in an interview.

For that he hired Pascal Diot, a French sales veteran and manager of the Dubai Filmmart who invited some 250 international buyers and sales agents and set up facilities at the Excelsior hotel including a digital library and private screening room.

As the initiative wound up on Monday, the buzz was positive but business muted.

Big festival films were already sold well before it began, and most industry executives said they used the Lido as a launchpad for deals to be closed in Toronto, a long established market venue whose dates partly overlap with Venice.

"I think this is the most welcome change in the new-look Venice. It's a quiet, less stressful space where you can meet the buyers and feel like you now have a home at this festival," said Rikke Ennis, head of Denmark-based international sales agents TrustNordisk which has three films screening in Venice.

"Of course it's the first year and not all the buyers are here, but it gives an opportunity to pitch smaller productions, get people interested and prepare deals that will get signed in Toronto," she told Reuters.

She said rights for her biggest title premiering on the Lido, Susanne Bier's "Love is All You Need" with Pierce Brosnan, were sold a year ago.

Lucky Red, the Italian distributor for one of the festival's highlights - Paul Thomas Anderson's "The Master" - said they had not made any purchases in Venice.

HOLE IN THE GROUND

The biggest players aside, some early sales appeared to be in the pipeline. Russian state-backed film agency Roskino said it had preliminary deals in the works for three films, "Bedouin", "Living" and "Two Days".

The Match Factory, a German-based company behind "Wadjda" - a small Saudi Arabian film that impressed critics in Venice - could announce sales this week, trade publication Variety reported.

"It's very difficult to establish a new market, given the competition of the other big festivals, but I think it's gone rather well. In Toronto there are hundreds of films, here it's cosier, it's more of a cinema boutique," said Eleonora Granata Jenkinson, a consultant for Roskino who has also worked for the Venice film festival in the past.

Professionals say the notoriously expensive Lido is not helped by a lack of infrastructure, with the much-vaunted new Palazzo del Cinema, which should have been inaugurated last year, still a hole in the ground and looking very much in doubt.

This year, the global economic downturn and a lack of A-list stars have added to a subdued atmosphere at the festival, with hoteliers complaining they are not as busy as in previous years.

"Venice has the history and the prestige that still make it important enough for people to be here," said Ennis.

"But it's crucial that they keep luring big films and stars to create the hype and get media coverage, it's something they need to watch out for."

(Reporting By Silvia Aloisi, editing by Paul Casciato)

• A Permanent Economic Emergency