08/10/2010

It has been a week of hopes and disappointments for the French film industry, which was pleased to see the HADOPI law (see news) come into force with the sending of the first email warnings to Internet users identified as having downloaded works illegally. But the industry was also unpleasantly surprised by the French Audiovisual Council’s negative opinion on the draft decree whose aim is to start making video-on-demand platforms make a compulsory financial contribution to film creation.

As regards the anti-piracy fight, Internet access providers Numéricable and Bouygues Telecom have set the ball rolling by sending email warnings to their subscribers who have been detected by rights-holders. SFR and Orange are about to do the same, but the operator Free is blocking the move, fuelling the anger of the Culture Ministry and reigniting a stormy debate between those for and against HADOPI, with some politicians seizing upon the issue for electoral ends.

As for compulsory financing of film (and audiovisual) creation, which is the foundation of the French model, the president of the French Audiovisual Council delivered a negative opinion on the draft decree whose plan is to oblige French video-on-demand (VOD) platforms to pay compulsory financial contributions to film creation (15% of income from operators with a turnover of above €10m should be earmarked from 2011 for investment in European works, including 12% for French works) and obey obligations for exhibition (60% European works, including 40% French).

The French Audiovisual Council considers that the French platforms are not yet economically viable (all are in deficit and only Canal Play, Orange and SFR make a turnover of above €10m) and mentions the risk of French VOD services being outsourced if they are unable to develop on an equal footing with competitors like iTunes (based in Luxembourg), Google and Hulu.

The French Audiovisual Council suggests including in the decree a clause for review in 18 months to analyse whether these obligations have not penalised the French platforms. In terms of financing, it also advises that the 15% threshold should be reached gradually over five years and that, to begin with, the exhibition level should be reduced to 50%, including 35% French works.

The Council’s advice and opinion has elicited a furious reaction from the SACD (Society of Dramatic Authors and Composers) who continue to fully support the draft decree drawn up by the Culture Ministry. Watch this space for further developments…

(Translated from French)