Industry Report: Distribution and exhibition
The distributor's work
by Cartoon, the European Association of Animation Film
What part does Bac Film play in the French market?
Roch Lener: Bac is a very well known company and was a major distributor. It is now an average sized company with a lot of experience having distributed almost 400 films in France.
What are the risks for a distributor?
Roch Lener: It is very easy to assume that once a film has been made it will automatically be exploited. However, if production is a dangerous business, so is that of distribution. It often happens that films are only exploited locally, some even not at all ...
The distributor gives a minimum guarantee (MG) to a producer which may range from 0 to X. For an independent film in France, X can represent up to one million Euros. For such an investment, the distributor will exploit the film initially theatrically, then on video/DVD, and finally through sales to TV.
The first part of these activities is the most dangerous because the whole of the MG is used for the costs of prints and advertising (P&A). Part of the MG should be used for video and the cinemas themselves, but this is something which Bac does not do.
The investment in this first area of exploitation is important. If one imagines a MG of 900.000 Euros and release costs of 900.000 Euros, this totals 1.8 million Euros. In order not to lose money, around 900.000 box office entries therefore need be made. If the film makes more at the box office, the distributor earns money; if the film makes less, it does not necessarily represent a loss because there still remain two windows of exploitation.
It is however important to maximize cinema exploitation because the success of video dis- tribution depends on public awareness of the film, and this is built on release in the cinema. On average, video sales account for 10% of box office revenue, but more for the children’s market. For this sector (animation), the amount spent on release and publicity should be higher than for a live action film.
TV sales also reflect box office figures. With 100.000 cinema tickets sold, there is little chance that you will sell the film to a television channel. A film (not animation) which has made a million entries could be sold to Canal + France for up to one million Euros. Films for children, i.e. animation, are sold for less because there are no primetime slots for this type of film.
There are therefore films which it is best not to distribute because if there is a large theatric risk, video will not make up the deficit and the film will not be sold to TV. For an animated film, there nevertheless remains the possibility of exploitation directly to video without a cinema release.
This rationale applies not only to France but also to other European countries. American films are released in the United States using very different volumes of promotion, spending between 15 and 35 million dollars - sometimes more than the actual production cost. Whilst this Atlantic system may seem disproportionate, it is in fact adapted to the realities of the north American market. A company such as DreamWorks lost money for nine years before finally making a profit. So the balance within this economic model, between investment in production and in pro-motion is not the same as in Europe and does not automatically guarantee success.
Why, in France, do posters stop exactly on the day of the film’s release?
Roch Lener:: The distributors believe that all work in advance is to convince people to come, and that once the film is in the cinemas only word of mouth will work.
Marc Bonny: Resources in Europe make it impossible to promote films and raise awareness in the same way as the American studios, and indeed word of mouth is «the key tool». It is also necessary to place posters where they reach the target audience and at times of the year where maximum visibility is assured. For Kirikou [trailer], a partnership was agreed with photo booths in public places for all of December 2005.
What price will a television channel pay for an animated film based on the type of transmission (hertzian, cable, satellite)?
Marc Bonny: the prices are low because TV channels do not have slots for this kind of material. And in any event, the films often already have a broadcaster as coproducer, who therefore by definition owns the TV rights. Kirikou was first broadcast on France 3 at 6.30 pm and got excellent ratings. But the broadcasters’ attitudes need to evolve for animated films.
Roch Lener: a film such as Piccolo [trailer] was financed by France 3 with 800.000 Euros - presale (2/3) and coproduction (1/3) - and also by Canal + with a total investment of 700.000 to 800.000 Euros. The balance between fiction and animation is generally in the region of 1 to 10, i.e. 100.000 Euros for an animated feature film which would have made a million box office entries.
To promote Harry Potter, the Internet was at the heart of the promotional strategy. Would it be possible to adapt this system to European animated features in order to encourage word of mouth?
Marc Bonny: almost all the films which are released have an Internet site dedicated to the film. To attract traffic to the site, it is important to associate a maximum number of media and trademark partners with links to the film site. The problem is thus the same as for all platforms. It is essential to create interest in the film.
Cartoon Master Potsdam, Germany, November 2005