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Industry Report: Digital

National policies towards digital media and entertainment / The case of France


- Valérie Bourgoin, Head of Video and Digital Creation at the CNC, presented the CNC support to digitalisation, cross-media development and video game creation.

Valérie Bourgoin is Head of the Video Game and Digital Creation Department at the Centre National de la Cinématographie, France.

When did the CNC begin to work in the video games sector?
The CNC is a public body under the Ministry of Culture. It has financial autonomy and supports key French audio-visual and cinematographic production. It is a large organisation, with quite a number of people working on various lines, in my own case particularly in the field of multimedia and technical industries.
Concerning its direction, there are three main divisions: the cinema which supports and regulates the cinema, the audiovisual which finances series and TV productions, and then a very small multimedia division dedicated to the exploration of new developments in the domains both of technology and content.

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What support do you offer in the technological field?
In the domain of technology, various aids are available to producers for support in tools development. I deal with the content, video games, and most specifically what is termed digital creation. Another service deals with VoD.

Why is the CNC interested in new media?
Because times change, everything is becoming digital (ADSL, DTT…). The public modes of consumption change. We have the introduction of catch-up TV, of interactive services.. Consumers want to watch anything, anywhere, via any distribution medium.
A further important matter is piracy. Our interest in the new media signifies the provision of a legal offer in the context of the fight against piracy. We hope that the more there are legal media offers in France, the less there will be piracy.
The other extremely important aim is to encourage creation. When we support a film, we aim to support the creators, new writing, encourage new formats, create bridges between different sectors and the new competences (we have seen bridges created between video games and animation for instance) and above all to seek out new talents.

What is the structure of aid to video games?
The CNC section for video games is relatively new, but the financial base for its support has been in place for 20 years. Previously, the basis of aid for multimedia edition was to encourage the creation of content for the new media supports, at that time the laser disk, the CD-ROM, the Internet… We oriented more and more towards the non-material media supports. The main activity of the aid base was targeted to play-learning content; this sector fell off and has been replaced by games.
In 2008 we decided to focus exclusively on video games. It is important to note that this aid structure, unlike other CNC support lines, is in partnership with the Ministry of Industry; which is to say it is a co-financing between the CNC and the Ministry of Industry, and has existed for 20 years.
Within this structure we have three aid systems:
• Firstly, support for the preliminary game modelling, to a maximum of 20,000 €. The aim is to support small games in the pre-production phase.
• We have a further support, in the form of a reimbursable advance for the pre-production of video games. On this basis we can finance up to 30% of the maximum budget figure. Our purpose is to help studios develop new concepts and to enable them to advance to a playable prototype, for presentation to an editor who will finance production of the complete game. The scope of this financial support corresponds to the creation of a pilot in animation, except that the budget in the video games industry is much higher, as the creation of a playable prototype requires more time and more money.

Is this financial support selective or automatic?
This is a selective aid. Though the major part of audiovisual and cinematographic production benefits from an automatic process, there exist a number of selective structures at the CNC. Our section always deals with selective aid for projects, as decided by commissions following a number of set criteria.
This selective support is for French companies, i.e. companies installed in France whatever the origin of the company. It is designed to accompany European expenditure.

A company developing a Spanish video game, but working with a French company, could have access to this funding?
This has never happened because we provide financial support for pre-production modelling, and are not involved in production. The games market does not much tend towards cooperation. Companies try to maintain secrecy about their projects under development. Co-production can be envisaged, but in fact this has never occurred. When a project receives financial aid, it is freed from the need to co-produce with a foreign company.

What annual budget is available to you?
The budget attributed to the video games sector is in the region of 3M€ per year. This involves reimbursable assistance, and is not uniquely subsidies.

What other financial aids are in place for the video games sector?
Another large stake for us in the video games market is the recent institution of tax credit. Tax credit began in 2005 when the European Commission was notified of the tax credit support mechanism, with our request for cultural exemption. For the video games, to an extent centred in the industrial sector, this was of considerable importance, as industrial tax credit was not possible under the rules of competition in the European Union. At the end of 2007 the Commission accepted the support mechanism. The tax credit texts were implemented in mid-2008.

How does tax credit function?
Here we are more concerned with production than pre-production, i.e. we accompany development for the whole production phase. The role of the CNC in this context is to approve which video games will benefit, or not, from tax credit. This system is based on European cooperation, as the main cultural criteria for decision are European rather than purely French. The manufacturing expenditures can be made inside the EU. One of the important points, and I believe this is the first time in the context of a tax credit, is that the credit is allotted on European expenditure, which is to say that French taxes contribute to expenditure outside France.
Therefore, sub-contracting within the EU is authorised. This provides a support basis which is quite open on the level of European cooperation. Beyond this, there is a whole set of limiting criteria on the cultural content of the games eligible for our aid by this method: we will not approve a game which is a sequence of races for instance; there are narrative criteria which are extremely important.
Games that do not fit into this framework are in general mini-games on Nintendo DS, which contain absolutely no narration, or racing-games where it is difficult to justify the narrative content under our criteria. I emphasise the point on narrative, but it is not the only element in our criteria.

How many projects have you received?
In 2008, the first year of implementation of tax credits, we received 120 applications and approved 37% of these demands.
This enabled us to gather statistical data on game types and the video game sector in France. Even though 120 games do not represent the totality of French production, nevertheless we were able to gain some idea of the costs of video games production in France.
Among the games we received, 20% were for the Wii; very few games were for the big games consoles. The majority of projects were for the little consoles, notably the Nintendo DS. On-line games also appear to be advancing. Big budget games represented 4% of the projects we received.
Concerning localisation of spending, we observed that expenditure within France represents 90% of the budget. Examination of games budgets shows us that the manufacture of a game takes place either entirely abroad or entirely in France.

How is the selection committee constituted?
The selection process is different for the two aid systems. In the case of tax credit, where we have access to very confidential information, the panel is composed purely of an administrative committee, i.e. personnel of the CNC and the Ministry of Industry.
With regard to confidentiality, our position is to make no communication on the projects supported or un-supported, so as to influence as little as possible the relation between the development studio and the publisher.

How does aid to the VoD sector function?
Our aid to VoD replies to the question of the legal offer. Our position is to support to the maximum a legal offer on the Internet. We have two aid systems, one system intended for catalogue holders, and the other system for the VoD providers. On the one hand, a support for the digitalisation of works, and on the other hand an encouragement for editorial strategies, the creation of VoD sites for the valorisation of European catalogues.
Support for catalogue holders provides aid both for the digitalisation of works and the editorial operations that may encompass these works. To benefit, these companies must be established in France, and the works concerned must already be in existence. The CNC also supports research into VoD rights, the creation of bonus, watermarking, and creation of trailers or posters for the projects.
An important consideration for the project selection committee is that, in the context of the fight against piracy, the CNC pays particular attention to catalogue holders who implement systems for protection of their works, particularly the electronic signature system.
The CNC support is for existing operators. We do not provide aid for the creation of new VoD platforms.

What is CNC policy in the new media sector?
We set up an experimental system in 2008. Already we have received 160 aid requests.. The idea is to encourage producers and creators to conceive projects for several media simultaneously. When we began this support structure, we questioned ourselves in depth on the rules that would govern this aid. We decided that our support would oblige producers to think in terms of at least three media. We categorised 5 media: Internet, TV, mobile telephone, cinema, video games, and asked producers to develop projects taking in 3 of these 5 media.
There is an aid available for the writing and development of works for 3 media of up to a maximum of 50,000 €, an aid targeting development for Internet and mobile of up to 20,000 €, or production aid up to 100,000 €.
This is a selective financial support open to authors or producers. Our aim is to encourage authors and producers to write differently, to explore media unfamiliar to them.
At the economic level it is a little more complex, we would wish to aid a new and still emerging economy to structure itself. We hope to encourage broadcasters, in the widest terms, to invest in these projects.

What are the first results of this support?
What comes to light is that the most common combination is cinema, TV, Internet and mobile. The projects put forward by the producers are in the majority because these are the projects which most badly require finance and also have most need for complementary competences which an author alone does not always possess. This support is not exclusively targeted on animation and we observe that there is a balance of division between the three forms, fiction, animation, documentary, each representing one third.

Can you give examples of supported projects?
One example of an animation project was a series of 13 x 3 minutes for Internet distribution, with various small games for mobile telephone relating to the episodes, plus ring-tones, pictures and minigames to download.
In the fiction category, we have supported two projects: Numerus Clausus which makes use of the new media, image capture and multiplication of points of view, to provide clues within a classic fiction framework. Faits Divers Paranormaux, FDP, is a TV series on the paranormal taking the form of discussions with Internet surfers as witnesses: they can testify to their own experiences simultaneously with the televised series, then several episodes on mobile telephone.
We have supported hybrid projects. Twenty Show is a programme first developed on Internet which then moved on to television. The producer wanted to make a documentary on the net-generation today I am 20, they posted short fictions on MySpace, surfers commented these fictions and posted their own video-blogs ( fr/2228868.html). All this material was employed by the producer to develop his documentary for broadcast on ARTE.
Equally we gave support to an ARTE project. This is a web documentary bringing together image and interactivity: Gaza Sderot, the Gaza line ( Sderot is a village on the far side of the frontier from Gaza. Developments on the other side can be followed on Internet; little reports on the daily life of the inhabitants are searchable either by location, by theme, by person, or by time-line.

Who are the partners of the projects put forward by producers?
Resources for co-financing are always the problem. The TV broadcasters (like ARTE TV), can act as partners between different European platforms for Internet distribution.

Are there other centres outside France that support the new media?
The CNC holds the lead in the exploration of projects in the new media. The MEDIA programme has implemented similar financial aids. There is no corresponding support in other individual European countries.

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