Org revives Euro expansion strategy

Studio Canal, the French company that tried to become a Euro major and then changed its mind, is flexing its international muscle again.

Just three years after it dismantled the last piece of its fledgling Euro distribution network under the orders of new chiefs at parent Vivendi, the Canal Plus subsid last week announced that it was acquiring Optimum Releasing, one of the U.K.’s leading specialty distribs.

Having spent the past three years pursuing more modest ambitions at home in Gaul, Studio Canal is gearing up for a renewed expansive push, and admits that similar moves in other territories are being mulled.

“After the Hollywood majors, we are the biggest film company in the business here. We have a European role to play,” Studio Canal managing director Frederic Sichler tells Variety.

So is history repeating itself?

Sichler insists not.

Company’s erstwhile ambitions were to build a Hollywood-style studio, complete with a fully-fledged inhouse production activity.

Today, Studio Canal’s remit is more cautious — to maximize revenues from its 5,000 movie catalog, and to grow this library modestly by around 20 titles a year, which will be either co-financed or acquired by the company.

“We are in the business of distribution and rights exploitation, not production,” says Sichler.

“I’m firmly of the view that independence is the key to creativity. But independent films need a structure the size of ours to ensure they are distributed as widely as possible.”

Expansion is once more on the agenda because, after an across the board restructuring at the Canal Plus Group, the film subsid, which was previously heavily indebted, is in much better shape financially, Sichler says.

Studio Canal hasn’t yet decided where it will plant its next French flag.

“We are looking at it country by country,” he says. ” Perhaps we will acquire a distributor, perhaps it will be some other form of partnership. We’ll only make a move when we think it is the right thing to do.”

Optimum is a perfect fit with Studio Canal’s U.K. objectives, Sichler says. Company run by Will Clarke — the 35-year-old who created the company in 1999 — releases high quality art-house films — the kind Studio Canal likes to handle — and re-releases classic movies, of which Studio Canal has thousands.

Clarke has also been edging into more mainstream fare as his company has grown; with StudioCanal’s backing, he will have the resources to pursue bigger budget Hollywood movies for the first time.

Optimum’s first classic pic released theatrically was Studio Canal title “The Third Man.” Today Optimum also has a flourishing home entertainment arm, appreciated for the quality of its DVDs of films such as Mathieu Kassovitz “La Haine,” re-released on the film’s 10th anniversary.

But it is Studio Canal’s library of 1,400 Brit titles — ranging from the Carry On films to the Ealing comedies to “The Elephant Man” – that provide the greatest interest. These were previously released on DVD in Blighty via Warner, but Clarke’s team will bring greater energy and innovation to their presentation. Optimum will also start working with StudioCanal to position these titles in the new era of digital downloading.

“We’d been mulling how to best exploit the British films in our library for the past two years,” explains Sichler. “It was obvious that the best place to do it wasn’t in France.”

On the theatrical side, a number of remakes of Studio Canal classic Brit pics are in development, including “Kind Hearts and Coronets” and “The Lavender Hill Mob,” which the French major may want to release via Optimum, rather than letting the U.K. rights go to a third party.

Optimum will also give Studio Canal more acquisitions flexibility — allowing it to it to take both French and U.K. rights on films it is interested in.

Said Clarke: “Having two major territories, France and the UK, makes a pretty powerful alliance for acquisition. I’m sure sales companies will appreciate that we’re bringing a lot of firepower to the table.”

However Clarke will continue to also acquire product solely for the UK.

The deal comes hot on the heels of Lionsgate’s $35 million acquisition of Redbus ┬álast year — Studio Canal is said to have paid north of $30 million for Optimum — and reflects buzz surrounding the Brit distrib scene right now. Wild Bunch — whose toppers originally ran Studio Canal — is another Gallic company whose pan-European distribution plans include the U.K., and has conversations with Optimum, although no deal has been forthcoming thus far.

Why is everyone so hot on U.K. distribution all of a sudden?

“We’ve got a good five to 10 years of growth left in the DVD market; it’s one of the only theatrical markets that actually increased in 2005; and while TV has always been a weakness, at least the doors are springing slightly open at the BBC,” says Clarke.

And he’s bullish about the future for digital downloading.

“There’s a great home entertainment market in this country, and with the onset of downloading, there’s a great opportunity there. The weather’s awful here, an Englishman’s home is his castle, people like to stay at home, we watch a lot of TV, we gobble up new technology, so with the advent of HD TV and Blu-Ray/HD-DVD and the convergence of computers and TV, there’s a massive opportunity. For companies like Studio Canal and Lionsgate, it’s very wise to get involved here.”

The only problem is that the French and the Brits don’t have a great history of mutual co-operation in the film biz. “Of course I’ve thought about that,” admits Clarke, “but for me nationality has got nothing to do with it, it’s the people that matter. The people at Studio Canal are very good at their jobs, and they add something to our business. They can open doors we can’t open ourselves from a production and acquisitions point of view.”

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