Key words

financing, CNC, terrestrial TV, distributors, pay TV, CANAL+, co-production, regional funding 

In France and in Europe there is certainly a strategic interest in enhancing the feature film economy: it is a growth vector for the field, and it is an opportunity for stimulating jobs and for furthering skills. Under the current situation, it is not possible to use these opportunities to the fullest.

The French movie-making industry has only very small percentage of its equity serving as a base, meaning that these films must necessarily be financed upstream. This difficulty is even more pervasive when it comes to animated films. Given the latter, how is it possible to finance a new project today?

Valérie Schermann, producer and founder of Prima Linea Productions, broached the topic with a market overview: "In 2010, 7 animated features sold 4.26 million admissions. Likewise, these films did quite well abroad, so that might seem like good news. But it's not, and for a very down-to-earth reason: animation is expensive (...)."

Animation, an expensive genre

"(...) Between 2001 and 2010 no French animation films were quoted at less than 3 M€. To the contrary: the median estimate came in at about 8 M€ (versus a 3 M€ median for live action films)." The producer gave two examples: Heartbreaker an ambitious live action movie with a big cast had a budget of 8.7 M€ whereas Ernest & Celestine, produced by the Armateurs, was budgeted at 9.2 M€. Furthermore, according to Valérie Schermann, the trouble begins in the development phase. She admitted – and the audience concurred – that "on average the CNC tends to help animation films more than other genres and the same holds for MEDIA funding, capped at 80,000 M€." However, "the measures could be improved": allocated amounts too scanty, near-impossibility for producers to get program funding due to discriminatory criteria (they must have produced at least three films in the four previous years), tax credit that imposes a 6-month deadline ("which, of course, is too short for animation").

For this producer of Zarafa and U, "excluding scenario, it's hard to properly develop an animation movie at less than 150,000 €."

A bird's eye view of essential financiers

Next, the producer enumerated a series of financial backers who, in her opinion, are essential to the feasibility of animation features. First of all, there's the producer, then the tax credit (capped at 1 M€), terrestrial TV, pay TV, selective funding (CNC, MEDIA, Eurimages), local subsidies (regional and/or departmental funds) and distributors' minimum guarantee (theatres, videos, international sales).

While the different financial backers are clearly defined, some are less visible than others when it comes to financial streams, beginning with terrestrial TV channels. "Today only France 3 Cinéma provides backing and then again it's only three to four films a year, although that's always better than nothing. Arte has announced that it intended to commit to one feature-length film a year, starting next year." What Valérie Schermann was pinpointing was the total absence of other channels, with the exception of M6 although it "only finances its own properties."
In contrast CANAL+ continues to show its unwaning support with 6 French-initiated animation films out of the 110 movies pre-bought every year. "Thank goodness they're there!" as she said.

For French regional funding, the ones most involved – often corresponding to an extensive local economic framework – are Poitou-Charentes (with the Charente departement), a leader in funding for the genre, Rhône-Alpes, and "to a lesser degree" Île-de-France.
Valérie Schermann therefore irrevocably concluded: "In nearly every instance, the French producers have a hard time financing a film alone, meaning that foreign co-productions are required." But contrary to what one might think, the internationalization is often a source of financial subtraction and not addition. "Partaking of a co-production does not just mean securing an additional budget line. It means scattered manufacturing and therefore a need to invest time and travel and often to purchase work flow management tools. It also means lesser tax credits, lower regional funding, and a negative impact on film-support funds and thus on financing the next project."

The counter-view of Label Anim

For us, on what you could call the fund-shopping list, our first stopover would be the movie theater distributors. It's after that stopover that a film object becomes a real movie theater object. This could be compared to a sort of dubbing ceremony." Valérie Schermann maintained that for her the distributor is not the top priority. Guillaume Galliot continued, affirming that he understood very well how setting up an international co-production could become necessary, but he felt that it would turn out to be "longer, more expensive and more complicated." With this, the producer of Prima Linea fully agreed. However, the Label Anim producer added: "A film can be set up without a terrestrial TV channel; it's harder but it's possible. It's the case for us at present. It's actually more interesting because it opens up a field of possibilities often impeded by the channels which intervene too emphatically at too-early a stage."

Hearing this, Valérie Schermann protested: "That's basically digging your own grave! That's what we did on our Fear(s) of the Dark feature, but it turned out to be a very high-risk operation which seriously challenged our financial health."

Film segmentation and its impact on financing

At present there are two types of feature animation film segments, tied to the target audiences. In essence, animation films are youth properties, intended for the whole family. But a line is drawn between auteur-type films and entertainment films. As stated by Sara Wikler, French film acquisitions manager for CANAL+: "We have to admit that the segmentation question influences our financing choices. In addition, we pre-editorialize our pre-buys. In other words, we're buying for no other reason than to fit the film into a well-defined slot." She continued with this candid statement: "We do know that youth auteur movies do not work for our programming."

However, Despicable Me by Pierre Coffin and Chris Renaud, although manufactured in France but produced by Universal, attained a 3.8 audience share score. "We are proud to invest in both these films but we do have to accept that one is doing better than the other. And if you add the fact that for this prime time slot the average – all genres combined – is 1.7 points, you begin to see the extent of the gap."

CANAL+, essential but demanding partner

Today CANAL+ put forward the figure of 16 pre-bought films in the works, among them "the first five are feature films; nine are the first features by their directors; and at least four do not have terrestrial channels on board." Of the latter there are Asterix and the Mansions of the Gods, in stereoscopic 3D, and Pourquoi j'ai (pas) mangé mon père, adapted from Roy Lewis' best-selling book. Besides these two movies that the CANAL+ manager positions in the entertainment category, de facto, "we only purchased pre-bought auteur films: Kirikou 3, Ernest & Celestine, Aya of Yop City also derived from a comic book, etc."

Sara Wikler also provided an explanation concerning the lower investment percentages (versus live action films): "CANAL+ FAMILY represents only one fourth of the viewers expected on Premium, which is why we're only looking at 10% of the animation estimate … compared to 18 to 20% for live action works."

She also suggested that, no matter what others might say, "five or six films a year, that's a very high rate of investment compared to the number of animation films presented: a 'mere' eight to nine!"

But then, asked someone from the audience, what are the funding criteria for a structure such as CANAL+? "There must undeniably be an entertainment vector, or else an established creative-support angle for auteur-type films, or it must be a property emanating from a TV series for reasons of brand imaging." Overall, CANAL+ invests between 600,000 € and 1 M€ per year. And Sara Wikler ended by stating that "The movie-theater success of a feature will not change its positioning in our specific scheduling slot." The choice is truly determined beforehand.

From Belgium to Germany, comparisons of co-producer profiles

After having joked about his place on the panel, due to his late arrival – "here you have a perfect example of co-producers: arriving last, limping a bit, and always far from the table" – said Studio 352 producer Stephan Roelants, giving his point of view on co-producing, a necessary passage that needs to be carefully navigated.

"Co-production has become inevitable. From the outside, it needs to be viewed in a certain state of mind. On Ernest & Celestine, we really began with what this film needed to be, and then we went back to determine what amount would be needed for us to make the film we hoped to make. Next, we began to search for financing. Going about this any other way would basically result in errors and the film would end up suffering." Stephan Roelants emphasized a key point: "A co-producer is not a stopgap. Include this person from the start of the project and he/she will turn out to be much more than a simple backer."

As for Gabriele Röthemeyer, CEO of Medien- und Filmgesellschaft Baden-Württemberg, Filmförderung, she voiced her alarm at the German situation. "The TV channels have all backed off from animation features. More generally, few films are now being made in our country, except for very precise subjects such as video gaming properties or products that are perfectly identified and driven by viewers/consumers. As such, this limits co-productions."

And when she reviewed German regional funding, known for large budgets and therefore large subsidies, the verdict was clear and spoken with regret: "It's our talents and producers who are chosen first. Naturally we remain very much open to co-productions but the market is a little skewed due to the policies of the distributors who much prefer to invest in North American movies rather than European... or even German ones."
This primacy of American films on European circuits (such as Italy) has often led to a stifling of national productions and thus to a near-dearth of international co-productions.

Stephan Roelants stated his position and added that it's important for "partners to expand their respective capacities. We need to communicate with co-producers as early as possible in a project. Notably, our relationship must not be viewed as an impingement, even if I did indeed note Prima Linea's point of view. It is, I believe, an opportunity rather than anything else." Stephan Roelants therefore invited European producers to consider that the American majors' commercial domination of the animated movies field represented an opportunity to promote a different type of film-making, which should come into its own with the viewers.

CNC, a shop with (overly?) specific stock

"For a film like The Day of the Crows, produced by Finalement and coming out next October, the amount reached 600,000 €."

To those who criticize the CNC for being a "difficult cash point for animation films," the Centre's representative replied with a few figures: 663 projects deposited of which only 15 in animation and, in the end, 57 grants. "For those of you such as Prima Linea or CANAL+ who find this percentage low, I'd like to point out that there are other contact points that can be addressed; from preparation to development and on to script, these cash points are open and have relatively good selection odds."

In her opinion, the tax credit is an important financial measure that 10 approved films received in 2011, five of those films being French-initiative projects.

However there are also specific measures known as "passerelle cinéma" (movie gateway). Under certain conditions producers who have access to an account in support of the audiovisual programmes industry (COSIP) can invest these amounts in feature animation development. This exception to the principle of separation between movie and audiovisual support accounts was allowed so that producers of audiovisual programs could finance development of animation features if they had not yet received the automatic movie support and if they held an audiovisual account generated by their previously-produced programs.

In 2011 this funding only applied to a single project, for 400,000 € in backing money. And, as a matter of fact, this project was Label Anim's My Mommy Is in America... The CNC representative then concluded: "Right now we're working on increasing this amount from 400,000 € to 500,000 € and we believe this should be implemented within the months to come."

Drafted by Stéphane Malagnac, Prop'Ose, France
Conferences organized by CITIA
under the editorial direction of René Broca and Christian Jacquemart

Translated by Sheila Adrian

Contact: christellerony@citia.org