Since 1997, in the Cinema Department of the CNC, Caroline Cor has been in charge of examining the applications made by producers for access to automatic support for the production of long features.

Which CNC aids are available to French production?
The CNC’s support account for 2007 was €505.57 million. This is raised from tax on the price of the cinema ticket (€121.07 million), on TVs (€349.56 million), DVD sales (€32.24 million) and other funds (Ministry and professional contributions of €0.70 million).
The support account is shared out between aid for the cinema (€256.87 millions) and audiovisual aid (€224.44 millions). The two systems are completely separated. A producer who obtains support funding for the audiovisual cannot use this aid for the cinema.
In the cinema sector, there exists an automatic financial support (€156.50 million) and also a discretionary aid (€100.37 million). Automatic support is given to producers of feature-length works (€72.00 million), distribution (€19.40 million), exploitation (€57.6 million) and video edition (€7.5 million).
The selective assistance is shared between production (€47.69 million), distribution (€22.41 million) and broadcasting (€30.27 million).

Has there been an increase in the production of films in France in recent years?
Yes, 2001 saw 205 films produced in France, we reached a peak of 240 films in 2005, and we should produce 230 films in 2008. There are between 4 and 8 animation films produced in France each year.

The CNC holds a privileged position not only in financing the audiovisual industry, but also because of its role in regulation of the sector. From the vantage point of your experience in observation of the French animation industry, what evolution has taken place in the financing structures of French productions?
If we consider the evolution of the structure of financing plans for films over the last 5 years, we see a noticeable increase in the producer’s share in financing.
We observe a peak for foreign coproductions in 2003. Beginning in 2004 the share of foreign coproduction falls off, thanks in particular to the installation of the tax credits system in France.
The other large blocks of financing are represented by Canal+, TPS (the second French TV pay-channel), Cine Cinema, the French TV broadcasters, the Soficas and MG provided by the distributors.

How have you reacted in response to the reduction of involvement of the TV channels?
The main measure was the creation of tax credit and the increase in regional aids. What is apparent is that the financing a producer could find in France was declining from 2001 until 2005, and has now risen since 2005 because of the tax credit system.

How does French tax credit work?
The system of tax credit in France, put into place in 2004, follows a logic different to the CNC’s. This scheme concerns manufacture and localisation of expenditure. Tax credit is granted to a company on the basis of its artistic and technical expenditure in France. The credit is calculated at the close of each financial year. It is deducted from the company tax on benefits. If the company does not have benefits, the tax credit is paid by the State. The rate of tax credit is 20% of the eligible expenditure, to a limit of €1.200 per minute for animation.

What expenditures are eligible for tax credit?
The author’s rights, the salaries and expenses paid in France, services undertaken in France.

What are the criteria for eligibility for tax credit?
> Works must be integrally or principally in the French language;
> They must benefit from CNC aids;
> They must be created principally in France;
> They must contribute to the development of French or European creation.

The projects are selected by experts according to technical criteria (the balance of expenditure with regard to the whole project).

How does the automatic support account function?
The conditions are the same as for tax credit. A distinction is made between the conditions of eligibility for production companies and for films. Production companies must meet three conditions:
> They must be based in France;
> They must be administered by European managers;
> The capital must be mainly European.

For films, the conditions of eligibility are the following:
> They must be European (an 18-point system exists, the film requires 14 points at least);
> A minimum of expenditure in France must be reached, based on a scale of 100 points.

Automatic support is calculated on the success of the film. The CNC takes a percentage of the sum generated by the film and uses it to aid production. Each cinema ticket generates around € 60 centimes. The CNC also takes 10% of the sum paid by the distributor to buy the film, and 4.5% of the video edition.

The minimum for European elements is set at 14 from the 18.

The minimum for European elements is set at 14 points from the 21.

The minimum for European elements is set at 9 points from the 14.

Cartoon Master Donostia – San Sebastian, Spain, November 2008