Author:   Philippe Carcassonne Producer, Cine B

The French System

There are a number of very distinctive features about the film production sector in France that distinguish it from Britain and many other countries. The first is that the film community tends to keep itself entirely separate from the other media or arts in France - unlike in the UK, it is rare for someone to move from producing television programmes or stage productions into film. French producers are also unlikely to be interested in working on any projects that look like mainstream Hollywood films. They do not want to see ideas that have been passed on by every studio and have now been slightly altered to try to appeal to the French market: their sensibilities and approach are very different to those of the studios and this is reflected in the material that they like to develop and produce. Also, the French market is culturally and linguistically specific. Neither producers nor the audience respond well to French stories told in English, and even tend to shun films made by their own stars in English.

The French Market

For British producers, France represents the gateway into the continental European market. France is the biggest single cinema market in Europe and more to the point, the place where non-American productions have the biggest share. The French film industry is closer to being entirely self-sufficient than any other country in Europe, recovering around 80 - 90% of their budget in revenues generated from the domestic market, leaving them with only a further 10 - 20% to make from all international sales in order to be in profit. As a result, French producers tend to be able to retain more of their rights than their British counterparts and take a greater share of revenues, enabling them to be more financially successful even if, internationally, their films are not as successful as the top British films. Because of this they are not as reliant on fees as British producers and have a better chance to develop the projects that they really want to make - and which have good commercial potential - rather than being rushed into making the next project that the can get financed.

Producers represent a significant political lobby in France and this has enabled them to win, and defend, various helpful policies, including broadcasting quotas which give them a strong bargaining position with television companies that need domestic films to strengthen their schedules. Television licence deals for films are, therefore, significantly more lucrative in France than in the UK. They also tend to be negotiated for one cycle at time, meaning that the rights can be re-sold roughly every three or four years, giving French producers a lucrative library which can be exploited much earlier than a UK producer would expect to have rights returned.

Co-Producing in France

Co-producing with a French partner potentially opens up the wide array of state support systems available in France to British producers. These support measures are a mixture of direct subsidies and levies.

There are two main subsidies available in France:

L'avance sur recettes: this is effectively an advance paid to the producer against box office receipts in the domestic market, up to a maximum of around £250,000 per film. This is restricted to French speaking films.

L'aide directe: which is a small subsidy paid to non-French speaking directors from small markets (excluding any English speaking markets) to help encourage a broader range of films to be shown in French cinemas. This support has tended to go to highly respected directors who would not be able to put their films together without unconditional state support which is generally not available in their own country.

Levies are charged on cinema ticket sales, video/home entertainment sales, and television licence deals in order to create a pool of funding, managed by the Government through the Centre Nationale de la Cinematographie (CNC), which is then made available to producers for their subsequent films. The box office levy (le fonds de soutien) is charged at a rate of around 50 pence per ticket on every ticket sold. This money is held in a designated account for the producer by the CNC and can be drawn down to help finance their next French speaking film (including a co-production). As well as reducing the need for other external funding, this levy is available to the producer during pre-production which means that they are not under pressure to sell off rights in order to cash flow this stage of the film. 10% of the first television sale up to £200,000 and 5% of the value thereafter also goes into this production account. For even a reasonably successful film with an average television deal, therefore, it can be seen that the amount of levy generated by this system, and available to be invested in the producer's next film, can be very significant.

It is clear that these levies have had a beneficial structural effect on the French industry, enabling producers to develop their portfolios and libraries and helping them to cash flow their productions at the most difficult times. It can make life slightly more difficult for new producers because they do not have any funds built up with the CNC but they can usually get round this by making their first film with an established producer and splitting the levy. This would also work for British producers looking to make their first French co-production, but the levy would only be available for any subsequent film made in France.

The French Government is now also introducing a tax credit scheme from the beginning of 2004 giving tax relief against expenditure that takes place in France. This would be tailored to meet the needs of the producer and, for example, could be applied to a co-production but the credits would only attach to that part of the spend that took place in France.

Top Tips

• The French cinema market is culturally and linguistically specific. Neither producers nor the audience respond well to French stories told in English, or mainstream stories that have been all round Hollywood before being taken to French producers.
• The French film industry is closer to being self-sufficient than any other country in Europe. Some 80 - 90% of budgets are covered by domestic revenues, with only 10 - 20% needed from all international sales to take the film into profit.
• Generous levies (linked to their past performance) are available in France to help producers build on their successes by cash flowing and supporting their subsequent films.