French will marry subsidies, tax on digital prints

An alternative way of helping French cinemas go digital has been put forward by the Centre National de la Cinematographie, Gaul’s government-backed film and TV funder.

The package includes a new law to protect cinema independence.

CNC’s plan to support up to 75% of the cost of digital conversion in theaters with a mutual fund, fed by coin levied from distributors, was rejected earlier this month.

CNC liked the idea because it spread resources across the sector and placed a buffer between exhibitors and distributors. It feared theaters would lose programming freedom if digital conversion was tied directly to distributor payments.

However, France’s national competition authority judged the proposal to be a potentially damaging intervention, competing with existing digital service companies.

Instead it suggested funding conversion with subsidies targeted at vulnerable cinemas, supported by a new tax on digital prints.

The CNC is now proposing that cinemas go digital with a mix of public subsidy and direct support from distributors. The tax, if found to be viable, would be added at a later date.

Cinema circuits and groups with more than 50 screens are considered robust enough to deal directly with distributors or digital service companies. Others are encouraged to explore options for collective bargaining.

For those remaining, CNC will put together options for direct subsidies to complement distributor contributions. Aim is also to touch regional aid funds, in particular for theaters in rural areas.

The principle that distributors should be the first line in financing digital conversion will be set down in law. Legislation will also ensure that neither exhibitors’ choice of films, nor distributors’ access to screens, should be distorted by financing arrangements.

“Even though this solution lacks the principle of solidarity expressed in the mutual fund, and will cost the public purse more, it will probably be quicker to implement and therefore more effective,” CNC said, announcing the plan Wednesday night.

It hopes to implement the plan in the second quarter of 2010.

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