What is the "French cultural exception" in cinema and is it really in danger?

“The commodification of culture that the neoliberal government defends is breaking up the French cultural exception

What is the "French cultural exception" in cinema and is it really in danger?

“The commodification of culture that the neoliberal government defends is breaking up the French cultural exception. The thrust was carried by Justine Triet, who received the Palme d'Or at the 2023 Cannes Film Festival for her film Anatomy of a Fall. This attack provoked strong reactions, including that of the Minister of Culture, Rima Abdul Malak, "stunned by his speech so unjust".

France, on the grounds that culture is not a good like any other, has established many mechanisms to protect cinema from the commercial rules of free trade. Complex devices – and sometimes misunderstood – ensure a certain diversity of films in the face of big productions.

The "cultural exception" of French cinema is based on the National Center for Cinema and the Moving Image (CNC). This public establishment, created in 1946 and placed under the authority of the Ministry of Culture, manages a complex redistributive system, consisting of donating the revenue from various taxes in the form of aid to creators, producers, exhibitors and distributors.

The CNC at the heart of the mechanism

The historic tax applies to cinema tickets. The operator of a room must pay 10.72% of the price of an entry to the CNC (5% overseas). In 2022, it brought in 117.9 million euros, down sharply since the Covid-19 crisis (154.4 million euros in 2019). Revenues from major hits, such as American "blockbusters", thus finance French productions and co-productions.

Another, even more lucrative tax involves TV stations. It brought in 469.1 million euros in 2022, mostly from Canal. Finally, the last - the most recent - concerns "the physical and online video distribution of additional content" (such as Netflix or YouTube) and represented 127 million euros in the same year.

The majority of these receipts are donated according to a redistributive principle: a producer whose film has few admissions, an exhibitor whose box office is weak or a distributor whose receipts are not at the rendezvous benefit from more aid. To be eligible, only one condition: that the film be approved by the CNC, that is to say of French production or mainly French. In 2022, this envelope was 171.2 million euros for the cinema.

Another component of aid is distributed according to a selective model – 119.8 million euros in 2022. The best known is the advance on receipts (74 agreements granted for 23.9 million euros in 2022), repayable between 25% and 80% depending on the films. But this aid is only granted to a minority of works that request it: on average, over ten years and before production, it has financed 55 feature films per year for 600 projects presented, according to an information report by Senate Culture Committee, released May 24.

This does not prevent other organizations from subsidizing films. Local authorities, for example, appreciate the visibility offered by these cultural works, the support for film industries and, more broadly, for the local economy.

The other major players in the "French cultural exception" are television channels, which provide almost a third of film funding. Generalists, such as TF1 or M6, are required to invest 3.2% of their turnover in cinema, a percentage that can reach between 12% and 16% for channels specializing in the 7th art, such as Channel or OCS.

In return, the broadcasters secure a catalog to feed their program schedule and a favorable broadcast time when they have contributed to the financing of a film. Thus, Canal, which provides 70% of the financing of television channels, has a privileged place in the media chronology: it can broadcast films six months after their theatrical release.

Since the transposition of a European directive in 2021, these funding obligations also concern on-demand audiovisual media. Subscription streaming platforms such as Netflix, Amazon Prime or Disney must therefore invest between 20% and 25% of their turnover in France in the production of European works and original French expression. A level of obligation "extremely ambitious and without any comparison with other European countries", underlined the recent report of the Senate. In return, Netflix negotiated in early 2022 the right to broadcast the films fifteen months after their theatrical release (seventeen months for Amazon Prime and Disney), compared to thirty-six months previously.

However, the platforms devote the majority of these investments to audiovisual productions, in particular series, and only 4% to 5% of their turnover to the cinema, which the boss of Canal, Maxime Saada, recently deplored.

According to the CNC's 2022 report, digital platforms financed 17 French initiative films, for 21 million euros - far from the 117.29 million euros disbursed by Canal.

For the channels as for the streaming services, the regulations impose a majority of the investments in the form of pre-purchase, even before the launch of the production. This type of advance, which is more risky, provides greater security for the creators of cinematographic works and promotes diversity. Finally, three quarters of the pre-financing obligation in cinema must be devoted to independent production, the channels not having the rights to the works they finance. In return, they benefit from the primacy of the distribution of these films.

While French films benefit from CNC aid and channel investment, they are still largely financed by producers (up to 39.5% in 2022) – who can themselves benefit from tax credits.

To ensure the diversity of the offer, and avoid broadcasting only blockbusters, cinemas have been bound by programming commitments since 1982. According to the most recent agreement, signed in May 2016, exhibitors have undertaken to reserve a percentage of screenings for European films and works with little screening (in less than 80 cinemas), and to maintain them for at least two weeks with a minimum number of weekly sessions. They also had to broadcast a minimum number of films from distributors achieving less than two million admissions.

But this agreement could not be renewed in 2018, and the negotiations became more complex with the health crisis. In a report submitted in April 2023 to the ministers of economy and culture, the former vice-president of the Council of State Bruno Lasserre underlined the importance of these commitments as a "safety net" against a "cinematographic monoculture". . It recommended adopting a legislative framework allowing the CNC to impose programming commitments on exhibitors and to strengthen their binding nature, by making public aid conditional on compliance with these rules.

Since the early 1960s, another CNC grant has been paid to establishments screening a percentage of "art house" films. In 2021, 1,300 cinemas (i.e. 63.2% of them) benefited from it, for a total of 18.4 million euros.

There is "a slow shift towards the idea that we have to think about [the] profitability of films", exposed Justine Triet after her critical speech towards the government in Cannes.

In recent years, many industry officials and elected officials have looked into the financing of cinema. The report produced by Dominique Boutonnat in 2019 - then commissioned by the government and then became boss of the CNC - focused the concerns of defenders of "cultural exception". The producer then pleaded for a larger share of private financing in addition to public support.

The same year, the deputy La République en Marche Marie-Ange Magne had suggested "capping all the taxes allocated to the CNC", while questioning the relevance of the direct collection of these taxes by the CNC rather than by Bercy . These proposals had made the then president of the CNC, Frédérique Bredin, jump, for whom this loss of financial autonomy "would break the virtuous principle which is at the heart of our cultural exception".

More recently, an information report by Senator Roger Karoutchi (Les Républicains), published in May, reignited these concerns. He suggests moving from a "subsidy logic" to "an offer of repayable loans and loan guarantees" and criticizes the tax credit granted to producer companies, which benefited 216 films in 2021, for 160 million euros.

Another recurring argument: there would be too many films while the average number of admissions per film is falling. On average, between 2012 and 2019, thirteen new films were released in theaters each week. Despite a large offer, attendance remained highly concentrated, points out the Senate information report: “In 2019, 12% of films exceeded one million admissions and (…) 62% of releases achieved less than 50,000 admissions. The programming is therefore renewed more quickly, with, for small films, "a high probability of quickly disappearing from the screens".

To these concerns about growing commodification, the Minister of Culture replies that the government has "continued to defend the French cultural exception", by deploying during the health crisis "more than 400 million euros for the world of cinema". Rima Abdul Malak called Justine Triet's speech "ungrateful and unfair", when her ministry announced a plan of 350 million euros until 2030 to support production and training in cinema.