Industry Report: Distribution and exhibition
European distribution: focus on France
by Claire La Combe (Europa Distribution)
- France is renowned as the "European Eldorado" for films. So why is there such anxiety among professionals about the state of the French films market lately?
Is the French ecosystem broken?
We’ve been hearing a lot of worried professionals about the state of the French films market lately. Concentration of entries in major circuits, overexposure of certain films, faster rotation of films on screens, higher promotion costs, with some art-house films which don’t even reach exhibition. Cases of the "system" dysfunction are numerous. Still, France stays Europe's biggest market for cinema with more than 200 million admissions per year since 2009, 5500 running theatres and more than 42% of market share for national productions. First on art-house, first on world cinema, country of cultural exception with supportive and potent public funds, France is renowned as the “European Eldorado” for films. So why is there such anxiety among French film professionals? Tensions on the market seemed to be similar as the ones lived at a greater level on the European film industry, due to digitisation mostly. Is the situation even poorer in France? We chatted with five of Europa Distribution French members to try to understand what the situation is like.
The job of distributor is marked by an "unparalleled violence"
These are the words given by Régine Vial, head of distribution at Les Films du Losange, and largely agreed by members interviewed. More and more films. Less and less slots. More and more windows. Less and less control on circulation. Distributors provide huge efforts to make each film exist but there is a feeling that independents are getting squeezed in the balance of powers between professionals.
High concentration. In 2014, 664 original films were distributed in France, with an average of 15 to 20 films out per week. Great dynamics. But, "if one could think that the fact there are more and more films is a good thing, for diversity, in fact, the issue is that there exists a concentration on biggest films" simply resumed Etienne Ollagnier, co-director of Jour2Fête.
Indeed, figures showing concentration in France speak for themselves: the 10 films most present in theatres represent an average of 81, 7% screen share per week. Major exhibition circuits (14,5% of cinemas) concentrate 66% of film entries, and the 12 non-independent distributors (US majors, affiliated companies to film or TV groups) gather 68% of cash collections and occupy 57% of screens on a film first week of exposure. "We just cannot live from the most fragile films" adds Etienne Ollagnier.
Fierce competition. With the digital era, access to film became easier for the audience surely, but also for a new generation of professionals. In France, where a culture of cinema is prevalent, the number of distributors have increased by an average of 10 every year since 2007, when there were already 276 companies. Not to mention new players online. Not to mention non-legal networks. So, "whenever you want to distribute a film, you have to be massive from first start" warns Régine Vial.
Among distributors even, there exists an overbid tendency for “promising” films, even if it is not necessarily justified, and even if distributors are well aware that there is no such rule for MGs as an expensive film means a success. In this competition, small independent art-house companies are jeopardized recognises Eric Lagesse, CEO of Pyramide and co-president of DIRE, "I am a middle-rich distributor so I still have carrots to offer…I’m not in the worst situation".
Costs and gaps. Carole Scotta, head of Haut et Court, as well co-president of DIRE, testifies herself: "We have entered a cautious phase for acquisition, partly because there is a loss in TV and video sales". Gambling on success for a film has become very risky due to the reduction of incomes. In 2014, video sales (VOD included) dropped by 10.4%, with physical video (76.2% of the market) decreasing by 14.1%. The only shrink in DVD sales caused a loss of 100 million euros in distributors’ revenue. In parallel, VOD sales generated a bit less than 10 million of extra benefit in a year.
All the more that marketing costs increase. To make a film visible, distributors have to invest more on different supports and pay more to access theatre advertising placements. In parallel, a traditional medium such as the press is cutting cinema content pages, and the only few places remaining for films tend to go to the "biggest", ones with severe marketing spending. Plus, it is not to forget that with the competition between films going on, marketing costs can sometimes be simply lost if the film doesn’t properly circulate. "We just do marketing with a real myopia" admits Grégoire Marchal, head of Distribution of KMBO.
As such, the situation is getting more and more strained. "We really have to sweat to make our films exist” says Eric Lagesse, while giving a warning, "I’m afraid we are slipping toward a buying money by money system".
The imbalance of power between distributors and exhibitors is getting serious
"And I have the feeling that the biggest structures don’t need that effort with exhibitors”, closes Eric Lagesse. Other members interviewed all used the expressions of "imbalance of power" and "struggle" to speak of the deterioration of relationships with programmers. For Grégoire Marchal, the "exhibitor barrier" has become a harsh reality
As last on the creative chain, exhibitors have a predictable “advantage”. They can judge a final work and they can choose to screen it, or not. It is part of their job, of course. But the big reproach made is that exhibitors now “choose to make the most of entries” and to give priority to most reputed “promising” films. So called “Art-house” films but still with wider audience such as Woody Allen’s, Joel & Ethan Coen’s, François Ozon’s etc. As the figures enounced in the introduction show, the trend moves toward a homogenisation of film offer due to this standardisation of choices made by exhibitors. For the film by Naomi Kawase, Sweet Red Bean Paste [+see also:
film profile], Haut et Court had to engage a mediation because in the inner centre of Paris, a cinema was complaining of not being given any copy. "We didn’t want to make any tandem – two copies in a same given audience area – to give the film a proper time to develop a public. But the film worked so well on first week, that others cinemas wanted to screen it." In Paris, number of copies can raise really fast, easily double, whenever you multiply copies in a same neighbourhood. This demand pushed by cinemas participate in the inflation on number of copies per film.
Discussions are currently super lively in France as the French government has just tried to impose a kind of "distribution engagement" – in a caricatured nutshell – making compulsory for a distributor to provide a copy of film asked by a theatre. In a week, the fracas got so big that the change in the law was not confirmed by the Parliament. In addition, recent cases of films actually distributed (with an official release date) but not being offered any screen in cinemas, raised even the curiosity out of the industry and got out in the press. Members of Europa Distribution also got cases of their own. "The past three months it has been a nightmare. Films don’t even reach screens!" reacts Grégoire Marchal. "We only get the crumbs."
Swaying during the film waltz. "We are on the verge of being released in the gutter" worries Regine Vial. To tackle the movement, independent distributors working with art house films have to invest a lot more…in time, press, new media, but also to develop different strategies. Class A festivals such as Cannes are still primordial to shade a greater light on their films, so theatres would be interested in it. But in parallel, for the public, they have to be very specific and work on niche and small communities. Not to forget that the job is following a prototype economy logic. That is partly why Bac Films has tried another approach with co-distribution. For Force Majeure [+see also:
interview: Ruben Östlund
film profile], they shared the costs and the screens with DistriB Films. "We will repeat the operation with the same partners with even more tasks shared between us" explains Mathieu Robinet, managing director. "It was a happy experience, and we’ll do it again on a case by case basis. In such a competitive era, this is really a new type of distribution we would be counted on." At Jour2Fête, they try to dispatch the risk with different departments: between international sales and distribution, between demanding documentaries and accessible features. At Haut et Court, they also run four cinemas (two in Paris, one in Chambery, one in Nimes) which enable them to "control better the downstream integration of the films they distribute". But Carole Scotta stresses that it is part of a unique opportunity with many theatre owners on their way to retirement and willing to sell. Another area for diversification along with TV production. "Exhibition, led by our programmer and partner Martin Bidou gives us more knowledge on release dates, competition with other films, and helps us with our films in some occasions. However, Distribution and Exhibition are really two different jobs." Meanwhile, there are some strategies which stay a bit behind. Digital ones.
Homeland of media chronology: in France theatre is king
In fact, France is a blessed country for theatrical release and protection of cinemas. The financing chain takes its roots in the media chronology rule, where each film support has its own exclusivity period and associated right sales. In France, theatre is the first support allowed, with 4 month of exclusivity. After comes Video (physical & VOD), followed 10 months later by TV or pay-TV and at the very end, from two years after the first exhibition, comes free TV. "Theatrical release has a great value: the more a film makes entries, the more notoriety it gains, the more its career would have a chance to grow big after." Regine Vial insists: the “event” of a film happens in screening rooms.
After Mr Bonnell’s report, the legislation was revised so films could access online platforms quicker (time reduced from 6 to 4 months). But it is unlikely that the legislation changes again soon: professionals from the industry are really divided on the subject. "We buy all our films to be screened in cinemas. This is something we fight for" says Carole Scotta. But for Mathieu Robinet, there exists a paradox with the media chronology: "80% of our revenues come from the theatres on French films, the media chronology creates a protecting environment for that to keep happening. But, Art-house films, which sometimes have difficulties to find their very specific audience in cinema, are the first victims of this rigidity in chronology. I believe it should exist derogatory rules for fragile films." And Etienne Ollagnier, together with his co-director, Sarah Chazelle, even see in shorten windows a potential for making marketing investment worth for two supports. Today, the 4-month period obliges distributors to pay twice for campaign because too much time has passed and the audience do not remember films. Fragile films which would need a proper online distribution to catch up with a theatre entry failure suffer from this double cost sentence. "This could be beneficial to us. But still…We worry about fostering the creation of a two-tier market with "small" films going straight to VOD and "big" films having an exclusive access to theatres." Dual feelings.
Reticence. "Day and date releases are complex" admits Regine Vial. "I know it is being done mostly in the UK, but I’m not sure it is good" she hesitates again. Among the five Europa Distribution members interviewed, only the youngest had experienced direct-to-VOD distribution. "In KMBO we only try with genre films. Zombie and horror films such as Road of the dead, films with a very niche audience.” Same for Jour2Fête who distributed The Smell of Us [+see also:
interview: Pierre-Paul Puljiz
film profile] by Larry Clark online. Today, French distributors are prudent with the online world. Whenever they have to decide which support should be the best to distribute for a film, they make judgement according to the amount of the audience. It is a relative quantitative choice, rather than a qualitative one. And for Day and Date, there is still an anxiety for potential cannibalisation between theatres and online entries.
According to Grégoire Marchal, means for suitable D&D release could be easily built. "I believe, for example, we could develop restricted VOD access, in desert cinema areas, in collaboration with local theatres, only by mastering IP addresses." But for him too, there is another issue which is the absence of "really incentive platforms".
Definitely, France is not very advanced on VOD and last audience statistics are not that convincing on the attraction of new online support – only 39% of French people have already used VOD platforms (average of 50% in Europe) and 8,3% of French people have tried "e-cinema”. Non-attractive interfaces are part of the explanation, but in fact, the content provided and the access fee (not free) are much more studied reasons for this late in new online practices. Still, the movement toward digital is undeniable and distributors know they would have to count on it. Eric Lagesse gently agrees, "I have no perspective on the future of cinema, but I’m guessing it would be more VOD, and more like "whenever I want". But we have to keep up with the media chronology because it also maintains our territories and diversity". Determined though, all members claim that there is a need to work closer with the venue and local audiences. "The screening room creates cinephilia and still trigger the rest of benefits in the film!" stresses Etienne Ollagnier.
A need to regrow French cinephilia
If film entries grow every year, so does piracy – "the biggest shake of the market" (Eric Lagesse). And they are two divided types of audiences. To caricature again, "old intellectuals" on theatrical side; "not-enough-film-educated youngsters" on the online side.
Again, figures speak for themselves in Europe, and France is no exception. Cinexpert barometer of February 2016 gives the growing tendency: 14,2% of cinema audience is under 15 years old, 15,6% is between 15 and 24 y.o. while the proportion of unemployed people grows over 30% due to retired people. Youngster are not moviegoers. On the contrary, they use the internet a lot. 69% of SVOD users are under 35 y.o.. They also have multiple devices and represent the highest proportion of online pirates.
One could think that France, via CNC regulations and youth programmes would be partly saved from the European issue. For example, the CNC dedicated schemes for school and media literacy enable a quite good circulation of supported films. But it doesn’t seem to trigger any curiosity in future audiences. In addition, legislation to favour cheaper ticket for under 15, has turned to be quite a slump for distributors of animated films, without changing the audience rate situation.
Regine Vial spots the fact that they know they already attract an educated audience with art-house films… "But I have one regret: there is no incentive measures to bring students in theatres. They should exist national discount for young adults also, not only for teenagers. We are losing a whole generation which doesn’t go to cinema". The audience narrowing type situation is even worse in independent cinemas, enhances Sarah Chazelle: "school programmes are the only occasions when young people come to these screening rooms, we really should mobilise to find new ways to attract them outside of the regulated schemes”. “We need to find words to talk to these generations, find new ways to tell stories and make youngsters understand cinema is a unique collective experience" agrees Mathieu Robinet. In general, says Grégoire Marchal, "the problem is rather structural than situational: the public is not curious anymore!" And piracy is a massive issue. “It is a real catastrophe, for the industry and in terms of education” says Eric Lagesse. "No one cares! We contacted the minister several times…but we don’t really have support to quantify the problem." While claiming for anti-piracy measures, most distributors pay for private services to deal with non-legal copies. Those services are in charge of deleting links leading to free illegal versions of their films.
Film professionals are very much into syndicated organisations. Through DIRE, or for example the Syndicate for Independent Distributors (SDI), French distributors organise dialogue with National bodies and government. "We have the chance to have public institutions who care, so we need to discuss about the evolution of the market and digitisation with them” insists Etienne Ollagnier, president of the SDI. The CNC is a real pillar for members interviewed, "the CNC could" they all used at some point, mentioning solutions. "They make surprising decisions sometimes, according to Eric Lagesse, "it is because we are not the only ones, as distributors, to be listened to". And so "it’s a constant fight to alert them" strains Carole Scotta. As for the government, it gladly recognises it will "keep acting". At the occasion of the reopening of "Les Assises du Cinema" on Monday 21 March – public-private discussions coordinated by the CNC – three necessities were reaffirmed: to help increase legal offer on the internet; to set up legal sanctions against piracy and to create an enforced national coercion; to protect film diversity.
"We live in such a beautiful country for cinema." And they all agree with Eric Lagesse: the love of cinema, and the distributors’ love for "what they do” are as big as ever. Distributors are the bridges to film circulation. "Whenever I see a film that resonates with my feelings, and that no one has bought yet, I just buy it" goes again Eric Lagesse. "There is an appetite for films and France stays a fascinating country to make and distribute them." Regine Vial stays optimistic. "Also, there exists a young generation of distributors, motivated and cinephile which is very dynamic in the dissemination of the European Cinema." The silver lining of the digital cloud can be real. "It is not only the other one’s fault if some of our films don’t make entries, it is just that we shouldn’t buy some films" sadly admits Grégoire Marchal. "We do our job for the public first, but as well as for authors, so they can keep creating, but we need to listen more to the market and the balance of power between exhibitors and us must change as well."
Hope. The French ecosystem is still here. On Monday 21 March, Audrey Azoulay, brand new French minister for culture declared: "I asked the CNC to do everything possible so that professionals can define all together, with its help, commitments. We are determined to make things go forward, for real. I believe we can honestly set things within two months, before the great moment of the Cannes Film festival". We’ll see how it goes again for the French film industry.
 DIRE: French association gathering 13 independent distributors
 Key Film Figures 2014, CNC report, May 2015 [Read here]
 See joint communication by the French director’ society SRF on the Loi Creation [Read here]
 Liberation “Trust, c’est trop” – Article on film cases like Evolution or Kaili Blues [Read here]
 December 2013, The financing of cinematographic production and distribution at the digital age [Read here]
 E-cinema = French expression for direct-to-VOD release platforms. Mediametrie report on ZDNet [Read here]
 January 2015, Mediametrie. See press report [Read here]
 See European Audiovisual Observatory figures from the AVMSD Refit preparatory studies commissioned by the DG CONNECT – November 2015 [available here]
 SDI: Syndicat des Distributeurs Independants | www.sdicine.fr/