Independent co-producers

They intervene during the production phase against rights on the negative and future revenues. Most of their investments are financed through the CNC ‘fonds de soutien’ to which they are entitled according to the results of their previous movies.

Distributors

They participate in the financing of a movie by granting the producer a guaranteed minimum sum (“MG” ), that they usually pay upon delivery of the movie. Once the movie is completed, they are responsible for its theatrical/video release. Most of the time they finance the Publishing and Advertising (P&A) expenses by themselves, in addition to their MG investment. They collect all the theatrical/video exploitation revenues, keep a given percentage of these amounts as their distribution fees (often 20 or 30 %), repay themselves from the money they invested (MG and all other expenses), and then repay what is left to the producer.

Sofica

They invest in film production in exchange for rights on the future revenues. They do not have rights on the negative of the film.
Created in 1985 to promote private investments in cinema domestic production through attractive tax-efficient products, these specific tax-deductible investment funds are regular funds providers to French productions. Since their creation, they have invested EUR 380 mln in more than 700 films, with an average investment of EUR 300 thd to EUR 750 thd per film. In 2002, eight SOFICA invested EUR 33 mln in 56 French films.
OBC, manages several SOFICA, notably Valor (investing in TF1 productions), Europa (for Luc Besson’s films), France Images (investing exclusively in France Telecom productions) as well as other “ independent” SOFICA (i.e. not set up for a group) through Cofiloisirs.

Subsidies

- Tax shelter : created in 2004, it amounts at around 8 % of the budget
- 19 Regions over 26 distribute subsidies for film production

A major financial contribution from TV channels

The French State has succeeded in protecting domestic production and lowering the detrimental impact of commercial TV on theatrical attendance by imposing on the French TV channels :

An obligation to invest a percentage of their turnover in French and European films

- Free-TV channels must spend at least 3.2 % of their turnover in the purchase and/or co-production of French and European films (including at least 2.5 % for French films)
- Pay-TV Canal+ must spend at least 20 % of its turnover in the purchase of French and European films (including at least 9 % for French films). Additional co-production investments can be made through Studio Canal, but there is no legal obligation on this point.
- Pay-TV TPS also has minimum purchase obligations, linked to the number of its subscribers.
- For all channels, 75 % of these investments must benefit to independent production companies (‘diversity clause’ ).

Restrictions regarding their broadcasting grids

- Quotas of French and European films have to be broadcasted, 40 % and 60 % respectively, in order to contain the position of US films.
- National hertzian channels (except Arte) cannot broadcast more than two films during prime time within a week, to protect the movie theatres business.
- TV channels have to wait a given period of time after the theatrical release of a film before broadcasting it : the delay is 12 months for pay-TV, and 24 or 36 months for free-TV (whether the channel has co-produced the movie or not) Canal+’ strong purchases obligations, which are the counterpart to the channel’ s right to program films much sooner than its competitors, have resulted in making it the leading financial partner of the French production industry over the past ten years.
- Aware of its unique position on the market, Canal+ was eager to establish stable and straight-forward relationships with producers. This was achieved through an agreement with industry representatives in 1992 (BLIC agreement) which established that the final payment of a film pre-sold to Canal+ could be increased according to box-office  success (these amended payments can amount up to 0.5 % of Canal+’s turnover).

TV channels may act either...

- as co-producers : they invest money during the production phase and therefore have rights on the negative and on future revenues of the film
- through a pre-sale contract : they purchase the right to broadcast the film once or several times. The payment is conditioned to the delivery of the movie, and is generally disbursed approximately three months after acceptance of the material.