War of the membership cards
UGC President Guy Verrechia has declared war with his intention to reduce by 15% the sum paid by cinema theatres to distributors (who then divide the amount between producers and directors) on each admission with a UGC membership card.
Marin Karmitz, director of MK2 (partner with Gaumont and Pathé on the Le Pass), has followed suit, stating that the passes are no longer profitable. However, the real reason behind this is the legal obligation of state-run and arthouse cinemas to sign up for the passes.
The system was launched in March 2000 by UGC and there are now 230,000 cardholders according to CNC estimates, generating between 12-14m admissions, or 6-7% of annual admissions.
For example, the UGC Illimité pass for €18 per month allows its holders to see an unlimited number of films during a year – good value for money considering that a full-price ticket can cost between €9 and €10. UGC – who have been paying distributors €5.03 per pass to date – now plan to reduce the ticket price to €4.26.
This ultimatum has triggered rather lively reactions from ARP (Association of Authors, Directors and Producers) and the SACD (Association of Authors, Composers, Playwrights), who have denounced a "strong effort by large exhibitors" aimed at "increasing margins...while the price of unlimited passes has rocketed by about 20% to 30% in recent years ".
The SACD thinks it is scandalous to make state-run and arthouse cinema networks pay for this supposed fall in profitability of unlimited membership cards, as their position has been made vulnerable by the opening of multiplex networks.
Meanwhile, the Bureau de Liaison des Organisations du Cinéma, which unites approximately 15 members, including the CSP (Chamber of Film Producers Unions), D.I.R.E. (European Independent Distributors), the Syndicat des Producteurs Indépendants, the SRF (Society of Film Directors) and the UPF (Union of Film Producers) are asking MEPs to vote in favour of an amendment that would fix these fees.
Questioned by all parties, the Centre National de la Cinématographie (CNC) – who has the final say with the renewal in March of the agreement on the passes – has commissioned an expert committee to study the pass conditions, but some industry analysts believe that the large exhibitor networks (Gaumont and Pathé of the Europalaces group have yet to declare their standpoint) would agree to get rid of the passes once and for all in case of failure.
(Translated from French)
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