27/03/2003

Although the financial heart of French cinema may be missing the odd beat or two, there is no doubt that the industry will get over its present difficulties.
The first positive sign of this is the increase in the number of international - and mainly European co-productions.

In 2002 foreign investment in the French film industry stood at Euros182.47m (up 34 per cent). The best news, however, was the 30 per cent increase – or Euros79.84m - in foreign investment in French-born-and-bred films. 94 co-productions with foreign partners were made in 2002, compared to 78 in 2001. This is a two-sided phenomenon in that French investment in international co-productions also rose: more than Euros265m were invested in 2002 compared with Euros197 in 2001, with Europe, and especially Belgium, contributing the lion’s share. Belgium is France’s production partner of choice and was behind 15 French-born films. Co-productions with the UK (10 features) and Germany (9 features) were also on the increase: and this trend validates the policy of strengthening joint ventures between Europe’s various state-owned film industry institutions and the support systems these countries have implemented. Italy and Switzerland continue to enjoy strong links to France with, respectively 9 and 6 co-productions, while Spanish joint ventures with France fell off between 1998 and 2002 from 16 to just 3.

Industry operators welcomed this international venture although the de-localisation of film sets is still giving French professionals some cause for concern. In 2002 French studios managed to hold their own even though films shot in foreign (non-French) locations rose by 18 per cent. Low labour costs and the high quality of Eastern and Central European studios (Hungary, the Czech Republic) are becoming more and more attractive, as are the fiscal sweeteners on offer in the German Landers, the UK’s sale and lease-back clauses, Irish tax breaks and Luxembourg’s tax shelters that Belgium is on the verge of adopting. A day’s work in France costs 20 per cent more that it would in the UK.
The second potential source of energy for the French film industry is based on an increase on taxes levied on the home video publishing sector which is on the rise following the advent of the DVD. The support fund managed by the CNC, who distribute the revenue from this sector to guarantee that French films are funded, would thus have an extra Euros30m to Euros40m at its disposal: a very welcome source of oxygen especially at a time when private investment in cinema via the Soficas (an important source of money for French cinema) is falling, banks are reluctant about issuing loans and regional contributions are marginal.

A third potential resource for the Industry’s future may come from funding from France’s 11 cable and satellite channels. They are come under the TPS Cinéma and Ciné Cinéma networks which are scheduled to spend around Euros40m annually in film pre-buys – and this amount is likely to increase in proportion to the number of their subscribers.
Jean-Jacques Aillagon is scheduled to announce the measures to be implemented to safeguard the balance of financing. The results of these measures will become visible further down the line in a few years’ time.