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Cartoon 2021 – Cartoon Business

Dossier industrie: Animation

“Les investisseurs veulent voir l’argent, mais ils cherchent aussi la passion et des équipes solides”, disent les experts à Cartoon Business


Philippe Alessandri et Reginald de Guillebon ont discuté sur la manière de traiter avec des financeurs et créer des partenariats d’investissement pour stimuler la croissance des studios d’animation

“Les investisseurs veulent voir l’argent, mais ils cherchent aussi la passion et des équipes solides”, disent les experts à Cartoon Business
Philippe Alessandri et Reginald de Guillebon lors du débat (© Cartoon)

Cet article est disponible en anglais.

On day 2 of this year’s Cartoon Business (8-10 December), John Lomas-Bullivant chaired a panel entitled “Attracting Studio Investment. When? Why? Who? How?” The 45-minute discussion saw the participation of Philippe Alessandri, of Watch Next Media; and Reginald de Guillebon, of Hildegarde. The speakers broke down how studios can attract investments and provided top advice on how to deal with potential backers and bring their enterprises to the next level.

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After spending many years working for several groups in the industry, Alessandri founded his own company in 2015. Watch Next Media controls three outfits – Turin-based studio Animato’, France’s La Factorie (with studios in Lille and Paris) and Kids First Distribution – in addition to 51% of Je suis bien content. While Animato’, La Factorie and Je suis bien content focus on production, Kids First Distribution handles the distribution of the three studios’ catalogues. The choice to open a new division (Animato’) in Italy came after the realisation that the country is the second-biggest European market, wherein one can find a favourable mix of public and private investments, accounting for about €80 million a year. Moreover, he applauded Italy’s recent decision to implement a 20% levy in line with the French example and the recent legislative push provided by the European Union’s AVMSD (read our recent interview on the subject).

A former investment banker, de Guillebon created Hildegarde in 2002 and defined it as an “entrepreneurial and decentralised family holding company that is committed to working with talents, teachers and companies in the world of creation and education in order to produce ambitious content with universal appeal”. Presently, Hildegarde controls several animation ventures and educational institutions as well as some prestigious film magazines, such as Premiere, Le Film français and Cahiers du Cinéma.

To start with, Lomas-Bullivant asked what could entice investors to back children’s animation, or indeed what could discourage them from doing so. Alessandri said that investors still see the audiovisual business as risky, since it is a people-based sector: “If you lose key creatives, you might lose everything. This attitude is supported by bad track records, including stories with CEOs leaving their own company after two years and making them lose all of their value.” On a more positive note, he stated that the demand for content is growing and adult-orientated animation is on the rise, which is a market segment that’s still relatively untapped: “In France, they’re now investing €50 million in animation and €500 million in live action... If we can reach prime time thanks to animation, we can gain some [significant] market share. Besides, animation can be exploited with merchandising, and that’s a huge difference when compared to other genres. It’s a totally different economy.”

De Guillebon provided an honest, no-frills take on the investors’ average profile: “Investors don’t love animation. They don’t care about kids. They want [to see] the green. They get money from some funds and look for hefty returns, generally with a 15%-30% profit margin per year. [...] Unfortunately, the media and animation business doesn’t provide that type of profit for these people. Still, the film business remains attractive, since it’s considered a ‘trophy asset’. People want to go to Cannes, maybe less so to Annecy, but is that good or bad money?” If producers decide to form a partnership and get an investor on board, de Guillebon warned that they need to be ready to share their power: “Someone is going to bring money and will be asking you for a lot of feedback, monthly figures, and so on. If you’re somebody who doesn’t like that, you shouldn’t onboard an investor. It takes time to find money and to follow up with these types of people.” He also made a distinction between corporate investors and finance investors. The former are the best to approach, since they can be your partners and understand the dynamics of your business. Speaking about how to search for this type of investor, de Guillebon said: “It’s the same thing: instead of having a bible, you have an investor deck. You draft a business plan instead of a financing plan. [...] It’s easier to sell a show than it is to sell yourself, so it’s better to have an ‘agent’, such as an investment banker, a lawyer or an accountant who can approach these people on your behalf.” Alessandri agreed with de Guillebon and added: “You [need to] sell them the future. When you sell the show, you’re selling a project that will be a hit in two years’ time. You’re basically selling their future revenue.”

De Guillebon added how the presence of a financial officer is essential for these types of meetings, since investors don’t think like creative people, and someone going through the numbers would reassure them. This does not imply, however, that investors don’t want to see passion or meet a strong team with a positive track record. Thus, you need to establish a decent, friendly connection, and if you’re able to do that, you may gain trust, money will flow and things will go smoothly.

During the last part of the talk, Alessandri reminded those watching of how important it is to focus on content to create “hits”, and mentioned the examples of Film Roman, which at the time sold just “one IP” (The Simpsons) for $500 million, and “the tiny British studio behind Peppa Pig” (Astley Baker Davies). However, de Guillebon warned that investors may be inclined to pay so much because they know they don’t need the original creators any more: “If I buy Peppa Pig, I can work on it without anyone present in the room. If you want to make a fortune, and that’s your goal in animation, the key is to create an iconic brand.”

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