Territory overheats under release overload, as ancillary markets cool off

Paris — After a year in which French theatrical admissions dipped 7%, the first few months of 2004 have shown promise.

2003 STATS
Top film: “Finding Nemo” (7.9 million admissions)
Top indie: “Taxi 3″ (6.2 million admissions)
Total admissions: 174.2 million
French films: 35% (61 million admissions)
U.S. films: 53% (92 million admissions)
Total releases: around 500
RECENT PICKUPS
“Hostage” (Metropolitan)
“Back to Gaya” (Metropolitan)
“Mean Creek” (Metropolitan)
“Mr. and Mrs. Smith” (SND)
“Prime” (SND)
“Underworld 2″ (SND)

Ticket sales rose nearly 3% in the first quarter of the year, with a series of local hit pics pushing French films’ market share up to 42%.

But the persistently high number of releases each week — a total of around 500 new films bowed in French theaters in 2003 — is causing Gallic distribbers to break out in a cold sweat.

“There are so many releases that a film doesn’t have time to establish itself — apart from a few rare cases, it has to succeed straight away or it disappears,” says Metropolitan’s Samuel Hadida. “That means making more prints and spending bigger amounts on marketing to try to make an immediate impact.”

Meanwhile, the pay TV market remains much tougher than it was in Canal Plus’ big spending heyday, and the free-to-air broadcasters seem less and less interested in movies, despite their legal obligation to buy films.

Following a massive hike in 2002, French video sales rose in volume last year but not nearly as impressively.

That all being said, there are still plenty of Gallic distribbers willing to pay what it takes to get the pics with the biggest audience potential. Flush thanks to the box office success of “The Lord of the Rings,” Metropolitan has the means to buy the dozen or so films it distributes a year in addition to its New Line titles, while the Gallic webs’ distrib arms — TFM, TF1’s joint venture with Miramax, and M6’s SND also are buying.

“There are a few hot projects that we will be looking at in Cannes,” says SND’s Thierry Desmichelle. “But more often than not there will be a script but no cast, so we may not close any deals at Cannes.”

Luc Besson’s EuropaCorp certainly has the cash to buy big pics for the French market but so far its acquisitions have been few and far between — martial arts pic “Ong Bak,” currently doing well on French screens, being one of those exceptions.

“We produce eight or nine films a year so in order to distribute around 12 we need to make few acquisitions,” says EuropaCorp’s Pierre-Ange Le Pogam.

Someone who will be in an acquisitive mood on the Croisette is Jean Labadie, whose Bac Majestic, once France’s most powerful indie distrib, has recently resolved its financial difficulties with the arrival of new majority shareholder Millimages.

There’s also a new player on the French scene in the shape of Tunisian-born producer and media dealmaker Tarak Ben Ammar’s Quinta Distribution. The company’s creation made unheard-of headline news in France, thanks to its surprise first release — Mel Gibson’s “The Passion of the Christ.”

Follow @Variety on Twitter for breaking news, reviews and more