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France

Olivier Henrard • Deputy chief executive officer, CNC

"The platforms have come to understand that it wasn’t in their interest to walk away from the elements that make French creation so powerful and historically unique"

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- The CNC’s second-in-command breaks down France’s lofty ambitions for the platforms’ imminent integration into the film and audiovisual funding system

Olivier Henrard • Deputy chief executive officer, CNC

Netflix, Amazon and Disney+, to name but a few – the burgeoning global SVoD leaders will very soon be legally integrated into the funding system for cinematographic and audiovisual content. In the context of the transposition of the European AVMS (Audiovisual Media Services) directive, the French draft decree (which can be read in detail here), currently awaiting a green light from Europe, has, amongst other measures, set out an obligation for platforms to invest in the production of French and European works, to the tune of 25% or 20% of their turnover in France (according to their desired place in the media timeline, for an SVoD release that should be possible less than 12 months after the release in French theatres or later). Olivier Henrard, the deputy chief executive officer of the CNC, enlightens us on the ambitions, philosophy, objectives, technical details and schedule for this major shake-up in the way works will be funded in the future.

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Cineuropa: What are the main strengths of the French draft decree relating to on-demand audiovisual media services?
Olivier Henrard: The aim of the AVMS draft decree, which has just been submitted to the European Commission (pursuant to European Directive 2015/1535), is to transpose into national legislation the regulations that relate to circulation quotas and the obligations imposed on on-demand audiovisual media services to invest in creation. It’s a consequence of the vote on the AVMS directive in 2018, which represented a great political victory for the cultural exception: it finally allows services located in other member states but which target French audiences to be covered by these obligations. In this current context of booming platforms, the decree strikes a fair and ambitious funding balance in favour of renewing French and European creation. For France, thanks to the initiative of the Minister of Culture, it thus constitutes an initial key milestone for integrating the platforms into an industrial model that has proven its worth, and all signs seem to indicate that this model is destined to perform well.

Going into it in more detail, it’s an ambitious project in terms of financing, it’s demanding, favouring independence and diversity in creation, and it strikes a fine balance between all of the interested parties. The decree is built around five main pillars: a high level of contributions to the funding of creation for those broadcasters that benefit from it – it reasserts the cardinal principle from the law of 1986 – and, most notably, a significant level of production of original French-language works; reasserting the criterion of independence as a guarantee of diversity, channelling a substantial proportion of the contributions towards independent production and strictly defining this term; distinguishing between audiovisual and film, a distinction that’s defined by the commercial exhibition of the work in theatres; defending auteurs and their rights; reasserting the value of back catalogues, channelling the audiovisual contributions towards heritage works; and active involvement in the funding system, with strict pre-financing obligations.

What guarantees are provided in favour of independent production?
The definition of “independent production” contained in the draft decree is very specific: there must not be any influence of any kind from the broadcaster either on the company or on the work itself. It’s therefore a two-pronged definition: independence linked to the production company, in which the AVMS directive must not hold any share nor any voting power, and independence linked to the work itself, which the broadcaster can only have limited rights over.

Does the split between funding for cinematographic production and audiovisual production (a minimum of 20%-80%, depending on the type of platform) strike a good balance between the needs of some – French professionals – and those of others – the platforms?
Film production is a major asset in French creation. If we disregard the COVID-19 crisis, the results are impressive: €1.1 billion in investment in 2019; 301 certified films; and 213 million admissions in the theatres, 74.66 million of which are for French movies.

This success is borne out overseas as well, with cash flows well above €500 million on average over the last ten years, 869 French films exhibited abroad in 2019 and an admissions base that has stood at more than 40 million for the last ten years. Today, the platforms have come to understand that it wasn’t in their interest to walk away from the elements that make French creation so powerful and historically unique – namely, a strong, well-structured film sector, capable of producing high-quality works and unearthing new talents at all stages of creation, and showcasing them within the densest network of theatres in Europe. Cinema, which is, more than ever, being defined by theatrical exhibition, is thus recognised as a qualitative, unique asset of France.

On the other hand, ever since the beginning, it’s been clear that the platforms’ involvement in film production must go hand in hand with an adjustment of their place in the media timeline, which is proportionate to the amount of funding they provide. This development will enable an economic model that is today – at least for some of them – quite a far cry from exhibiting films in theatres, to be reconciled with the French cultural exception.

What are the estimated amounts of financing expected in the short term?
On the basis of a full year, one can expect the integration of foreign platforms in the financing of creation to generate approximately €200 million to €250 million per year in the short term, at least 20% of which would go into film, or even more if their turnover continues to grow, which is indeed the trend being observed at the moment.

What is the provisional schedule for its implementation? Will the negotiations that are already under way on the revision of the media timeline have a bearing on this?
The objective for its implementation has already been announced by Minister Roselyne Bachelot – that is, 1 July 2021. This concerns the entry into force of the AVMS decree, the modification of the TNT and Cable-Satellite decrees, as well as the media timeline. The ruling on the transposition of the AVMS directive did indeed foresee that a new media timeline would have to be negotiated and that, in the absence of an agreement within a time limit determined by decree, the government would have to temporarily – that is, until the signature and widespread adoption of an agreement – establish the applicable new windows. This deadline for negotiations has just been set as 31 March. However, this date doesn’t represent the end of the negotiations: it constitutes a meeting point, and from there, the government will be able to start working on drafting a Council of State decree so that it will be ready on 1 July if no agreement has been reached by then.

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(Translated from French)

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