In the nearly eight months since France’s Centre National du Cinéma et de l’Image Animée (CNC) overhauled its grant regulations in an effort to boost domestic production, the country has been busy. French prodcos like Paris-based GO-N Productions and Xilam Animation have expanded their existing operations or opened new studios in the country, while broadcasters have upped their investment in original, local programming spurred on by the changes.

Key alterations to the funding structure, which had not been reformed in 10 years, include: CNC support for up to half of a company’s development costs for an original IP; increased funding from the CNC when local production costs exceed US$394,000 per hour; and a local tax credit hike from 20% to 25% on total French spend.

Regarding international co-productions, a French broadcaster’s share of a more expensive global collaboration has been dropped from 25% to 20% to qualify for the CNC grant. Additionally, the French investment must be balanced by international presales. The Tax Rebate for International Productions (TRIP) also rose from 20% to 30% of French spend.

According to David Michel, CEO of Paris-based Cottonwood Media (Squish, Ollie and Moon), the changes have had some immediate positive effects on new studios and animation schools, but for companies focused more on international business, like his, there are some limitations.

“On the positive side, young production companies that might not have the cash flow to develop more projects can benefit. The changes are also great for the market as a whole, as you need this kind of money to help support an ecosystem of schools, talent and original domestic production,” Michel says.

“But as more studios open, it could result in higher labor costs, especially for the most talented animators. The system is also designed for producers to satisfy the domestic market first, so it really doesn’t lend itself to international co-productions. Seeing as Cottonwood is mostly focused on the international market with our existing IP, we won’t benefit as much from the new scheme, although our latest kids project, Flea Unleashed, will.”

He adds that because France is one of the few markets outside of the US where there is still a high demand for local programming, the changes will put French broadcasters in a position to direct more resources to local commissions.

“It’s not that there shouldn’t be any more local shows; it’s just that the balance is going to be weighed heavily towards more local shows,” Michel says.

For France Télévisions, which currently invests US$33 million a year in local animation, plans are in the works to further increase its spend on local productions by the end of the year.

Tiphaine de Raguenel, head of children’s and head of programming for its dedicated kids channel France 4, says France Télévisions is close to renewing its budget with the French government for the next five years. And it will then look to secure an agreement to invest in local animation with French producers union SPFA.

“We don’t know what the exact impact of the CNC changes will be, but we are already seeing that some of the new series we’re investing in will be produced in France,” says Raguenel. “We do, however, suspect that there might be a little bit of pressure on the market in terms of hiring talent,” she notes. “There are great animation schools in France, but when the students graduate they are quite junior—which is fine, but studios will need senior animators, too.”

Corinne Kouper, co-founder of Parisian prodco TeamTO, says she agrees the market for talent will tighten up, but it won’t affect her company as much because of its established international reputation. In terms of service work, TeamTO has recently animated eOne’s PJ Masks, Disney’s Sofia the First and Ubisoft’s Rabbids Invasion, and has produced several original properties, including Angelo Rules, feature film Yellowbird and new series Take It Easy Mike.

“We are a known studio now with a very cost-effective pipeline, so we won’t suffer too much from potential talent shortages,” Kouper says.

The company, which recently upgraded its Bourg-les-Valence location to an 11,000-square-foot facility housing 60% of the company’s 380 employees, made the decision to only produce animation in-house in France eight years ago. “We did not wait until the new funding system finally became more efficient for local production,” says Kouper.

Fellow Paris-based company Cyber Group Studios also made a commitment to animate the majority (about 85%) of its productions in France.

“Of the seven shows we are currently producing, we have only one where the animation is done abroad,” says CEO Pierre Sissman.”We made a decision three years ago to produce our big series such as Zorro, Zou and Mini Ninjas in France with a little bit of help from Canada because of the treaty.”
And while Michel is uncertain about how the changes will benefit international co-pros, Kouper says the new TRIP tax credit increase, while not huge, will help make a difference together with the CNC changes.

“If we didn’t have the knowledge of the new system coming, we wouldn’t have secured our recent deal with Activision Blizzard for Skylanders Academy,” says Kouper, adding that TeamTO’s 52 x 13-minute animated comedy My Knight and Me, a co-pro with Belgium’s Thuristar for Canal+ Family and Super RTL (Germany), also benefits from the new international scheme.

Sissman agrees that the country’s tax scheme, coupled with France’s worldwide reputation for producing quality animation, will only help the industry.

“The additional tax credits and subsidies in France attract a lot of foreign producers that want to do co-pros with France,” he says. “So the changes are bringing additional opportunities to the existing producers not only to produce for French networks, but for international platforms, too, like Hulu, Disney, Nick or Turner, to name a few.”

Looking at co-pro and local options for Canal+, the French pay-TV network is still expecting to launch 10 original productions next year across Canal+ Famille, Teletoon+ and Piwi+.

“We need to be different to compete with the US broadcasters,” says Canal+ head of children’s programs Laurence Blaevoet. “And we have an obligation to produce about US$3.4 million in local animation per year.”

As for international co-productions, Blaevoet says the CNC changes won’t affect her channels’ guidelines that much. “If we find a nice co-pro, we’ll do it,” she says. “It’s better to have a big project than have a show that doesn’t get completed because the money runs out.” What might be a problem, she adds, is selling local shows internationally because the editorial line at Canal+ is very specific. “Our humor might not translate overseas, and even in France it’s difficult to find a second channel,” she says.

Sissman also recognizes the challenges that come with producing and selling local shows abroad. “French producers, even if they produce mostly for French networks, have to ask themelves if their shows are international enough to live outside the borders of France,” he says.

As for the sales side of the equation, the revamped rules will also impact French distributors as local indies and networks navigate the new landscape over the next few years.

According to Lionel Marty, head of sales for indie shop About Premium Content (APC), the fact that work is staying in France is good news for the Parisian boutique financier and distributor managed by Emmanuelle Guilbart and Laurent Boissel, and backed by Nevision.

“The producer will be able to control more of the production, and work with more French studios, making the work easier and raising the quality factor,” Marty says. “The way these productions will be financed will allow more spending in France, which is very positive for the market globally.”

He says the financing gap will probably be lower than it was a couple of years ago, now that producers are working with broadcasters under new CMC guidelines.

“The gap being lowered is positive for us. Some pre-sales will still be required because productions need to be at an international level, but APC Kids’ role is to not only be a distributor, but also help producers search for financing with pre-sales,” he says.