27/03/2003

“The upward trend in financing has run its course.” That statement was made by David Kessler, the managing director of the CNC during a press conference to present the Institution’s end-of-year report for 2002. In his speech, Kessler was eager to emphasise the anxiety felt by French operators and the absolute need to find alternative solutions.

Up until now, the film industry’s support system was driven by its engine: French pay-TV Canal+. Right from its inception in 1984, Canal+ was obliged to spend at least 20 per cent of its annual resources in the purchase of the broadcast rights to films (at least 12 per cent of this sum was earmarked for European titles and 9 per cent for domestic ones). The amount was calculated according to the number of subscribers. In 2002, Canal+ invested a total of Euros 302m, Euros123m of which went to 109 French films. All the same, and for the very first time ever, the drop off in subscribers resulted in a proportional decrease in the network’s financial obligations to the film industry. In the Spring of 2002, the temporary suspension of presales to Canal+ generated panic in the French film industry. Canal+ was swimming in troubled waters because of the problems caused by competition from cable and satellite channels and the uncertainty surrounding the future strategies of Canal+’s parent company, Vivendi Universal. As a result, Canal+ was forced to renegotiate its obligations to the French film industry until 2004. In addition since May 2000, the network has had to respect the diversity clause meaning the it had to give preferential treatment to medium-to-low budget films (45 per cent of those investments goes to productions with a budget of Euros5.34m or less) and the effects this clause had were bizarre, to say the least: an increase in films whose budget was very close to this amount (24 films in 2002 compared to 11 in 2001).
Lastly, the following theory was put forward: the network had failed to maintain its obligations. Canal+ dismissed these charges and pointed out the disparity that exists between the reality of its presales situation and the CNC’s involvement in these titles. The Superior Audiovisual Council is scheduled shortly to bring an end to this controversy which, however, was a clear indicator of the climate of distrust that exists between French cinema and its principle source of finance.

The situation regarding finance forthcoming from terrestrial TV channels is much better: Euros108m were invested in 2002, an 8 per cent increase. The breakdown of where this money went is as follows: 68 per cent was spent in presales and 32 per cent in co-production. However it must be pointed out that this increase is relative in that it is the result of an extension of legal obligations. Privately owned broadcaster TF1, who guarantee 31 per cent of these investments, reduced their level of contribution in 2002 by Euros12m in 2002 and invested Euros 33 compared to Euros45 in 2001. At the same time the contribution from France’s two state-owned broadcasters (France 2 and France 3) went up by Euros14m from Euros36m in 2001 to Euros50m in 2002. Another fundamental problem that will be dealt with shortly regards the pre-financing of unencrypted terrestrial channels since it no longer corresponds to the real impact of cinema: in 1993, 20 French films out of a total of 49 made it into the year’s Top 100 in terms of attendance. In 2002 that number had dropped to just 9 out of a total of 23.

TV networks have, for the longest time, been the driving engines of French cinema. That is the reason for the current symbiotic relationship, which has however generated a whole series of problems like the pressure that TV networks bring to bear on the casting of a given film that they have scheduled for a prime time slot; the limited space TVs dedicate to animated features and films for adolescents (who are cinema’s prime customers); vertical integration with video production and distribution companies that limit the independents’ activities considerably. French film industry operators hope that these problems can soon be solved by means of new sources of funding.