Over the past six years, Olivier Courson and his team have turned Studiocanal into Europe’s nearest equivalent to a major Hollywood studio.
To do so, they had to transform the company. In early 2006, when Courson became chairman, Studiocanal was a France-based production-distribution-sales outfit; 90% of its lineup was French-language.
Today, 70% of films are in English and two-thirds of revenues come from outside France.
Studiocanal runs fully integrated, all-rights distribution operations in France, U.K. and Germany, the only European company to do so, Courson points out. It owns Belgium’s nWave, Europe’s foremost 3D content studio, and Germany’s Tandem Communications, the continent’s high-end TV fiction powerhouse.
Produced by Working Title and financed by Studiocanal, Tomas Alfredson’s “Tinker Tailor Soldier Spy” bowed at the Venice fest in fall to critical praise, an $87 million worldwide B.O. by mid-April and talk of a new kind of moviemaking: mainstream auteur films that have audience punch without sacrificing artistic ambition.
Also, in September, Studiocanal raised €150 million ($198 million) via a three-year slate financing deal with Anton Capital Entertainment.
Current productions include “Paddington Bear,” an adaptation of the books about the stuffed toy bear, with “Harry Potter” producer David Heyman; the Coen brothers’ “Inside Llewyn Davis”; “The Last Exorcism 2” and Michael Winterbottom’s “The King of Soho,” which are in post. Michel Gondry’s “Mood Indigo,” and Susanne Bier’s “Serena,” with Jennifer Lawrence and Bradley Cooper, are shooting.
It is a mark of the achievement of Courson and his team that Studiocanal has put all this through during a radical economic downturn, and in the face of DVD and TV market erosion — without piling on debt or losses.
On the contrary, in 2011 Studiocanal posted $78 million profits after amortization off $539.5 million in revenue — a 15% profit margin. Hollywood studio heads would die for such results.
Company’s “significantly” hiked 2011 margin reflects “our now different mix in movies, three-country distribution, and strong development of international production and foreign sales,” Courson says.
There’s strategic logic to Studiocanal’s growth.
In 2006, it was sitting on Europe’s largest film library, based on 1996 buys of the UGC DA Intl. and Carolco catalogs. In all, 1,400 titles were from the U.K., Europe’s most robust home entertainment market.
“We had an amazing library, needed to do more with it, and were convinced there were opportunities,” Courson recalls.
The time was ripe. By 2006, following past excesses under Pierre Lescure, Bertrand Meheut had turned around the fortunes of Studiocanal parent, pay TV giant Canal Plus Group. A CPG merger with rival satcaster TPS was brewing. Courson proposed to Vivendi to forge a European studio, leveraging distribution in France, U.K. and Germany.
Studiocanal has worked through this playbook ever since.
Setting momentum, in May 2006 Studiocanal purchased Optimum Releasing, a U.K. distrib with a vibrant DVD arm and passion for reissuing classics — of which Studiocanal had vault-loads.
Backed by Studiocanal, Optimum moved into bigger buys. Its first, “In the Valley of Elah,” preemed at the Venice Film Festival in 2007.
But Studiocanal wasn’t content to fuel multi-territory distribution slates by market buys alone.
“We wanted to avoid dependency on the market, and develop a common line-up for our three territories,” says Courson.
So it moved into international production, while Optimum fired up U.K. production, combing through Studiocanal’s library for British remake opportunities.
“U.K. productions have potential outside the U.K., mostly in our domestic market in Europe,” Courson says.
The 2008 purchase of German distrib Kinowelt gave Studiocanal even greater clout in distribution and production financing.
Courson situates Studiocanal as a European-style studio in-between Hollywood majors and single-country indies. Like L.A.’s titans, it rolls off a significant home market.
“France, the U.K. and Germany are Europe’s top three markets in media spend, DVD and theatrical grosses,” says IHS Screen Digest’s David Hancock, who puts their combined $5 billion 2011 B.O. at 54% of the U.S. box office.
Sagely, Courson always refused to contemplate direct distribution in Italy and Spain.
“If he had, Studiocanal wouldn’t be doing as well,” Hancock says.
In what Courson calls its “domestic territories,” Studiocanal has pulled down studio-style output deals — for instance, with German broadcast network RTL.
The Studiocanal-owned 5,000-title film library is sold by Universal abroad and Lionsgate Stateside. It was enhanced last year by European home entertainment/digital rights to Miramax titles.
Studiocanal’s ACE pact was Europe’s first studio-style slate financing deal. The purchase of nWave and Tandem was a way to diversify, Courson adds.
But for all its conglom-like moves, Studiocanal’s sustainable studio success owes as much to its differences from Hollywood’s majors.
“Studiocanal moves at a budget range whose sweet spot is around $15 million to $25 million,” says Working Title’s Tim Bevan. “It’s an area often a bit below (Hollywood) studios’ radar.”
Then there’s marketing. Distributing worldwide, “majors take on huge risk in movie investment and prints and advertising for the U.S. and multiple territories,” Courson argues.
Over the past decade, while international box office has grown, p&a costs have often grown faster.
So, outside its territory triptych, Studiocanal lets its foreign distributors handle p&a. The company also outsources production, working with high-profile partners.
This mixed model of corporate co-ordination and decentralization gives Studiocanal its singular studio standing — and may also be its biggest challenge.
“Studiocanal is Europe’s answer to what was a studio speciality division,” says Matthew Justice at U.K.’s Big Talk, which produced “Attack the Block” with Studiocanal.
Beyond direct distribution and an international sales operation, Studiocanal “has the expertise to bring the kind of minimum guarantees to enable independent films of a certain scale and heft to get made,” Justice adds, “but has the flexibility to work with other partners and always feels like a lean operation.”
For Courson, “The companies we’ve bought were independents built by entrepreneurs.” If Studiocanal has a challenge, it’s “to keep this entrepreneurial spirit alive,” he says.
In searching for words to describe Studiocanal and summarize its business, an accurate description might be independent studio.
“When you talk about studios, most people think about Hollywood,” says Philippe Kern at consultancy Kea. “But for Europeans, there are alternatives.”