Telco gets the film bug

France Telecom to co-produce 10-15 pics a year

PARIS — A new player is set to enter the European film biz in the hulking shape of telco giant France Telecom.

In a surprise announcement that provoked mixed emotions in the Gallic film industry last week, the company said it will co-produce 10-15 French and other European films a year via a new subsidiary for a budget in the “tens of millions of Euros” range.

The entity will also be in the market for film libraries.

Frederique Dumas, independent producer of Oscar-winning “No Man’s Land” and other notable arthouse titles, is heading the unit that for now remains headquarterless — and doesn’t even have a name — but will become operational at the beginning of 2007, with a dozen or so staff.

“We want to create a new brand, a company that will have its own identity, its own editorial profile,” Dumas says, promising: “We are going to be a breath of fresh air for the production industry.”

Entity will sign its first films in the months ahead. Dumas says she already has her eye on some potential projects. Company could be a minority producer or the main backer of a film, she says, and will be looking to invest in projects across the production spectrum, from big-budget fare to small arthouse pics.

“We aren’t as limited as traditional broadcasters who only want to co-produce films with mass appeal, because France Telecom has the platforms that make it possible to give exposure to a diverse array of content,” Dumas says, referring to the telco’s VOD and mobile phone services and IPTV.

There are no plans to distribute theatrically, but international sales are in the cards.

“We won’t do it straightaway. But in time, we will have a commercial team,” Dumas says.

The new subsidiary will initially form a small part of France Telecom’s burgeoning content division, which has set itself a target of earning E400 million ($510 million) from direct pay services by 2008, from content such as movies, sport and videogames.

“We have big ambitions in content distribution,” says Herve Payan, senior VP for partnerships and services at France Telecom’s consumer brand Orange, pointing out that across Europe, France Telecom has 145 million subscribers.

France Telecom’s gargantuan wealth is making the major players in the French film industry nervous. Since money will be no object, it is argued, the company will be able to blow rivals out of the water when bidding for a must-have project.

Dumas assured worriers the subsidiary would act “reasonably.”

Still, industryites in France are asking what, exactly, France Telecom’s film biz gameplan is, as well as the limits of its ambitions.

In Gaul, the telco has been under pressure for some time to pony up coin for French film production — as part of a distribution chain that requires all participants to do their bit.

Last year, it signed a deal with industry orgs promising to invest a percentage of its VOD revenues — small potatoes for now, but an amount destined to get bigger — to pre-finance French films.

“It’s only right that they should support the film industry,” says Michel Gomez, director of the powerful film-maker hyphenates’ org ARP.

But industryites are puzzling over the recent announcement, which goes beyond those commitments and yet, at the same time, is pretty modest given France Telecom’s means.

“Ten to 15 films a year is neither here nor there. Their strategy is not very clear,” comments one observer.

However, one thing is clear: Its production investments will undoubtedly win France Telecom friends in Gaul’s powerful independent producers’ lobby at a time when the telco is looking for leverage, for instance, in upcoming VOD negotiations. Among its concerns, France Telecom would like to see the VOD window in France reduced from seven and a half months to six months after theatrical — the same as video.

But for now, Dumas won’t go into further detail about France Telecom’s longer term film ambitions. “We aren’t going to reveal our business plan,” she says with an enigmatic smile. “First we have to put everything in place. There will be more to say in a few months time.”

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