Small European Film Markets: Portraits and Comparisons

France

The market share of French films, including both majority and minority co-productions was 39.8% in 2023, as reported by the CNC. Within the top 5 domestic box office hits of 2023, Pathé's comedy adventure Asterix and Obelix: The Middle Kingdom (FR 2023), inspired by the beloved French comics, slightly outperformed Christopher Nolan’s Oppenheimer (US, UK 2023) in ticket sales (CNC, 2024). US films, consistently popular in France, held a 41.3% market share in 2023. Between 2012 and 2019, the disparity in viewership between French and American films widened, with French films experiencing decline in average viewership (Boulay-Esperonnier et al., 2023).

The international appeal of French cinema is largely driven by English-language productions, intended for international audiences. This trend is evident as six out of the 10 most successful French films internationally were English-language titles, with Luc Besson’s involvement in three, highlighting his significant international presence. The export revenue of French films is directly affected when there is an absence of major French production in English (CNC and Unifrance, 2023).

French policymakers have been active in examining the evolving film landscape and creating more favourable market dynamics to attract private financiers (Siritzky, 2019). The ‘La Grande Fabrique de I 'image projects as part of the ‘France 2030 recovery plan’ are set to facilitate a major scale-up to make France the top destination for filming and digital production in Europe. Overall, France is actively pursuing global recognition as a major player in film production.

In the last two decades, the increase in the number of French films produced has not been accompanied by an increase in domestic cinema admissions. More films are being produced with the same or even fewer resources, impacting the reinvestment capacity of production companies. Over 15 years, the number of cinema-released films has increased by 42%, from 487 films in 2002 to 693 in 2017, indicating intensified competition. Discussions about challenges facing the French film industry centre on the overproduction of films.

The proliferation of audiovisual services in the French market has not only created new opportunities for the production sector, particularly with the increased demand for fiction, but it has also led to tensions regarding the availability of film crews and studios, resulting in higher costs (Arcom, 2023). Also, CNC recognizes skill shortages, especially for animation (CNC, 2022).

In France’s film production landscape, dominated by SMEs, four key players stand out for both their high activity levels and high-budget productions (exceeding €10 million): Gaumont, Pathé, UGC, and Europacorp. Each of these companies, with Gaumont and Europacorp focusing on production and distribution, and Pathé and UGC integrating production, distribution, and exhibition, consistently produce 3-6 films annually. A group of 5-10 medium-sized companies produce at least three films annually. At the macroeconomic level, the current fragmentation in the sector lacks an industrial dynamic strong enough to build and sustain robust independent companies equipped to handle changes in the French and international markets.

France has increased its tax rebate for international production (TRIP) from 30% to 40% on all qualifying expenses. TRIP generated about €1.14 billion in the period 2017-2021 (EY Consulting, 2023). There are, however, questions surrounding the dynamics of tax credits, as they often finance big productions that, at first glance, do not appear to have difficulties in raising funds. From 2017 to 2023, streaming platform films primarily benefited from TRIP (66% of spending in 2023).

Created in 1985, the film and audiovisual industry financing companies (SOFICAs) are investment companies intended to collect private funds devoted exclusively to the financing of film and audiovisual production. Often backed by media company guarantors, SOFICAs primarily provide gap funding and are repaid after distributors in the recoupment. Each SOFICA can invest 20% of its money in foreign-speaking (qualified) co-productions, as long as the film’s language matches the foreign co-producer’s country’s language. The SOFICAs approved in 2023 managed to raise €73.07 million, the highest amount collected since their creation, according to CNC.

Between 2014 and 2023, the market share for US films in France averaged around 46%. The average number of weekly film releases in 2022 stood at 1.4 for US films and 7.8 for French films, marking a notable increase in the gap from the pre-crisis average of 2.4 US films to 7 French films (CNC, 2023). As the supply of films, including French and international productions, grows beyond the cinemas’ absorption capacity, it leads to a falling trend in the revenue per film, which declined from €1.7 million in 2012 to €1.2 million in 2019. These figures are in stark contrast to the ever-increasing subsidies from the CNC (Karoutchi, 2023).

The French film industry faces the challenge of decreasing investments from distributors in France in domestic films, a trend that has persisted over the last ten years (CNC, 2024). The concentration of collections of films on the top three distributors was stable in 2022 at 41.5%, at a particularly high level compared to the last 20 years (3rd highest level). The concentration of the top 10 distributors is also at 79.7%, the fourth highest level in the period 2002-2022. In 2022, more than half of collections of films (58%) were by the American majors (26% of establishments’ first week, 10% of films in first exclusivity). The analysis of concentration according to the operator shows that more than half of box office revenues were generated by the top three operators (52.4% of revenues). Overall, 64% of revenues were recorded by the top seven operators for 42% of screens in 2022 (61% on average in 2017-2019) (CNC, 2023).

In the past decade, France has witnessed a notable expansion in the number of cinema screens, surpassing growth in countries like Germany and countering the trend of decline seen in Italy. However, the average number of screenings per film and per establishment is at a lower level since the pandemic. There has been a significant drop in programming density for films released in fewer than 250 establishments. The lifespan seems shorter for arthouse films. However, the lifespan of US films seems to be increasing: 69.4% make 90% of their entries over the first five weeks (-11.2 points compared to pre-pandemic). The market share of arthouse films (according to exclusive first-time admissions) was at 18.2% in 2022, a low level compared to the pre-pandemic period (21.6% over the 2017-2019 period) (Boulay-Esperonnier et al., 2023).

The cinema market includes distributors and exhibitors with different sizes. No single segment consistently dominates negotiations: small exhibitors often rely on films from major distributors, whereas independent distributors face challenges negotiating with powerful operators. In 2022, a total of 1,264 establishments, comprising 2,802 screens, were classified as arthouse cinemas, which represents a decrease of 18 cinemas from the previous year.

Over the last decade, cinema attendance in France ranged from 65%-70% of the population. In 2022, 77% of those under 25 went to the cinema, compared to 66% of 25-49-year-olds or 50% of those over 50. They represent one third of all tickets sold. Younger audiences have preferences for American films (42% of audiences in 2022).

Continuing its upward trajectory for the second year, video revenue reached €2,3 million in 2022. A significant portion of this growth – 79.2% of the total turnover – stems from subscription video on demand (SVoD), which itself grew by 7.7% from the previous year. According to CNC, 2022 also saw VoD revenue (encompassing both transactional and subscription) totalling €2,079.8 million. The distribution of consumption according to nationality in viewing duration shows that around 18% of films on SVoD were French, around 12% were European and 64% were American. French films have a higher share of consumption on TVoD (29%) against 68% of US and 2% European films. Between the start of the year and September 2022, Netflix claimed the majority share of VoD viewership at 65.7%. In September 2023, the Netflix catalogue had 34 French original films (3.1% of the catalogue) compared to 13 for Prime Video. For the first time, in 2023, Disney+ offered two French originals, according to CNC.

France makes up 4% of the global box office. French cinema attracted 31.3 million admissions and generated €201.5 million in international box office revenue in 2022 (including turnover from minority co-productions) (+75.4% compared to 2021), as reported by Unifrance. The box office turned out to be 28% lower than the symbolic threshold of 40 million calculated over the last decade (excluding the exceptional success of films with more than 10 million admissions): this gap is part of the overall drop in global attendance compared to 2019. The average result per film is 25,500 spectators (19,000 in 2021, 52,000 in 2019). When analysing export performance, Unifrance tracks the number of French films that have crossed the threshold of 1 million admissions. In 2022, a total of seven French productions, four of which were minority productions, sold more than 1 million in theatres outside of France.

The analysis of export performance by the CNC and Unifrance also considers key export markets. According to the analysis, Europe is the leading geographical area for theatrical exhibition of French cinema (12.2 million admissions in 2022). Germany claims the spot as the number one export market for French films, drawing in 2.82 million viewers. The top five export markets also include Poland, Russia, Italy and Spain. In terms of admissions, Central and Eastern Europe led the growth for French productions, reaching an all-time high in market share. The Polish market shows preference for French animation. Latin America emerged as the third most dynamic region in 2022, with Mexico as a top market. Other regions, especially Asia, experienced a sharp decline in viewership, with the Chinese market significantly affected by the pandemic’s aftermath. This led to a fivefold decrease in the number of spectators for French films in a single year (CNC and Unifrance, 2023).

Unifrance also pays attention to the sales of French productions in broadcast schedules. Analysis has shown that French content comes just after English language content in markets such as Germany and Australia. Poland is showing considerable potential as an export destination of French film and audiovisual projects in broadcast schedules.

Export success is also measured by examining which genres perform best in other markets. Drama, which was the most popular genre in 2021, saw its poorest performance of the decade in 2022. Comedy regained its top position, with its admissions numbers doubling year-on-year. The animation genre saw an exceptional rise in 2022, registering the most substantial growth in admissions across all genres. Certain genres find success in specific export markets, as shown by the Italian audience’s fondness for French thrillers. The French cinema’s success in North America and Asia are closely tied to big-budget action movies.

French arthouse films’ success in export markets is another critical aspect of competitiveness. In 2022, arthouse films, a fundamental part of French cinema’s global perception, attracted over 10 million viewers. These films blend new releases with a catalogue of classic titles. Their recovery rate post-2017-2019 (-38.6%) is more favourable than the entire French cinema sector (-46.2%).

In 2022, 3 out of 4 films are the result of co-production between 2.1 countries on average, for a total of 76 foreign partner countries. According to the Study on cinema export conducted by CNC and Unifrance, the highest number of majority and minority co-productions in 2022 were with Western European countries. The number of co-productions with US has seen rise.

Among European non-English speaking production countries, France had the strongest representation on SVoD platforms in July 2023. France accounted for 4% of the content on SVoD platforms, making it the fourth most represented production territory globally. The domestic market is excluded from the analysis. The US leads with a 43% share, while the UK comes in the second place with 7.6%. The analysis covers more than 100 SVoD platforms in 53 territories (see Unifrance, 2022).

Post-World War II, the nation known for its ‘cultural exception’ implemented audiovisual legislation. This legislation defines a support-based economy with multiple forms of aid and a rigorous market classification, including a media chronology for films. Global streaming services are obliged to invest in local film production, just as domestic players are.

The share of public support in French initiative films (FIF) is 25% of funding: half in tax credit, 6% in automatic support from CNC, 4% in selective aid from the CNC, and 2.5% in regional support. The share of public support for film production has doubled in the past decade, primarily due to the increase in tax credits. Note: A work of ‘French initiative’ means majority French works for which the exploitation rights on the original work or the scenario have been acquired by production companies established in France.

In 2022, 287 films were approved, aligning with the 10-year average of 288 films. However, the number of FIF declined to 208 in 2022, a 10.7% drop from the 2017-2019 average of 233 films, which was a peak compared to the fewer than 200 films per year before 2010. Approved productions received close to €1.2 billion in investments. This included a record high of €283.7 million from foreign sources, up 22.3% against the 2017-2019 average, and €898.5 million from French sources, a slight decrease from the previous three-year average but a 4.5% rise from 2019.

Investments in FIFs totalled €915 million, showing a 7% decline from the 2017-2019 average, yet aligning closely with 2019’s pre-Covid figure of €903.4 million. Almost two-thirds of FIFs have budgets under €4 million, with those between €1 million and €4 million reaching a peak since 2014 at 39.9% in 2022. The year 2022 marked a historic peak in co-productions, accounting for about 50% of approved films, the highest ratio since 2003. According to CNC, there was a reduction in co-production partners, involving 33 countries, compared to an average of 39 over the last 10 years. The share of public support in FIF was stable in 2022 (7.9%) compared to the 2017-2019 period (8.8%) after a historically high level in 2021.

Automatic subsidies are awarded by CNC to qualifying producers and distributors in amounts that reflect each film’s commercial success, both at the box office and in ancillary markets such as DVD/Blu-ray sales and television rights.

In 2022, 17 FIFs received pre-financing from streamers (It is important to outline that global streamers are obliged to invest a portion of their revenue in local production). Netflix financed 8 titles, Prime Video 5, and Disney+ 4, totalling an investment of €21 million. Only two of these films were exclusively funded by the streamers. Netflix’s financing averages €2.2 million, whereas Disney+ offers €0.49 million and Prime Video €0.27 million per film. Canal+ remains the leading supporter of French film funding among broadcasters, contributing €117.3 million to 104 FIFs, and further investing €5.38 million in 12 minority French co-productions. Despite a decrease of 11% in broadcaster funded FIFs in 2022 relative to the 2017-2019 average, there was an unmistakable increase in the average investment per film.