The French film industry may be more resilient than its European neighbors, but it isn’t recession proof.

While the volume of production has remained stable at 230 films, investments last year fell to E1.1 billion ($1.4 billion), a 26.3% drop on 2008, according to a CNC report.

The drop isn’t alarming, says CNC prexy Veronique Cayla, pointing out that 2009 figures were boosted by three big-budget films — Luc Besson’s “Arthur and the Revenge of Maltazard” ($87.5 million), “Arthur and the Two Worlds War” ($91.8 million), and Jacques Perrin and Jacques Cluzaud’s “Oceans” ($70.1 million).

But otherwise, Cayla said, the obvious reason for the plunge is the recession.

Foreign sales revenues dropped to $201.48 million, while producers’ own financing decreased to $94.46 million.

Foreign co-production investments, which represented 18.8% of all French films’ investment, dropped by 22.5% to $282.72 million.

In addition, Gallic TV stations — TF1, France Televions and M6 — which are obliged to invest a percentage of their revenues in French movies, cut their investments by 23.1% to $152 million as their ad revenues dropped.

TV pre-buys plunged dramatically by 66.7% and co-production coin decreased by 33.3%.

In contrast, French pay TV giant Canal Plus, a powerful backer of local pics, only slighly reduced its investment by 5.3% to $225 million. The paybox’s coin still finances 66.5% of all French-majority films and 18.5% of foreign titles co-produced with Gaul.

A good reason to remain optimistic, said Cayla, is that Orange Cinema Series is stepping up its investments significantly. In its first full year, OCS invested $9.9 million in 13 films. Some 80% of that investment was accounted for by payments for Gallic first-run, premium pay TV rights.

“It’s impressive,” said Cayla. “We didn’t expect it.”

Another significant fact is the plunge in the number of higher-budget films (costing above Euros 7 million/$9.6 million) and lower-budget pics (below Euros 1 million/$1.4 million). Meanwhile, the report shows that midrange films (from Euros 4-7 million/$5.5 million-$9.6 million) have grown.

Olivier Wotling, director of the CNC film department, pointed out bigger-budget films that rely on international investment — notably toons — were more difficult to finance in time of recession.

Meanwhile, 96 films were co-produced with 34 countries. French minority co-pros were up to 48 films in 2009, four more than 2008.

i>John Hopewell contributed to this report. /i>


After breaking all-time records in 2009, the Gallic box office has climbed again this year with a 16% year-on-year increase through February, according to a report from the CNC.

James Cameron’s “Avatar,” which bowed Dec. 16 in France, has continued to fuel admissions, grossing $117.11 million through February.

Pic’s huge success in Gaul justified Gallic mini-major UGC’s inking a deal with Ymagis to convert its 605 screens throughout Europe to digital.

” ‘Avatar’s’ been a major driving force for French filmmgoers,” says Olivier Lebraud, marketing and promotion topper at SND, distributor of “Nine” in Gaul. “And other films have inevitably benefited from it.”

Other big earners this year include “The Princess and the Frog” ($27.1 million), “Oceans” ($20 million), Clint Eastwood’s “Invictus” ($23.6 million) and Guy Ritchie’s “Sherlock Holmes” ($15.8 million).

However, the market share for French films has dropped to 26.2 % compared to 38.2% at the same time last year.

That could change when Romain Duris-starrer “Heartbreaker,” Luc Besson’s “Adele Blanc Sec” and Richard Berri’s gangster pic “22 Bullets” open in the coming months.

Lebraud predicts that U.S. steroscopic 3D pics will continue to pull the highest numbers at the Gallic box office, notably Tim Burton’s “Alice in Wonderland,” which is set to bow on March 24.

Only a handful of Gallic producers has embarked on 3D projects.

Aton Soumache and partner Dimitri Rassam are working on a 3D feature toon version of “The Little Prince” as well as 3D eco-adventure fantasy “Mune,” which is going into production this month.

John Hopewell contributed to this report.