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French TV Animation: Major Hike in French Public Support Mechanisms in 2016

Tax rebates and automatic subsidies now contribute 35-40% of average budgets for Gallic TV animation

French public authorities have long targeted TV animation as a strategic sector, partly due to the fact that it’s an eminently international sector, given the ease of dubbing, and because it’s also highly dependent on technology.

France’s tax rebate schemes have been increased since the beginning of the year and now stand at 30% of eligible expenses for feature films with a cap of €30 million ($33 million) and at 25% for TV projects.

The previous rate for TV animation was 20%. Since January 1, 2016, the rebate is 25%, based on a production cost equal to or above €3,000 / minute – delivering a significant increase to the effective rate.

In late 2015, the CNC also upgraded its automatic subsidy scheme for French nationality TV animation, whose rate is calculated in function of domestic production spend. Under the revised scheme, the support per project depends on the hourly spend in France, based on eligible expenses incurred in France. In the previous system, virtually all projects received the maximum amount possible. The new system is more selective, and encourages spending in France, ambitious projects and original projects vs. book adaptations.

Two types of bonus amounts, based on a point system (on top of the basic support) have been introduced, which are more demanding than the previous scheme, precisely in order to be more selective.

The underlying goals of the new scheme are to encourage ambitious projects and original series, relocation of production to France and favor international sales.

In the wake of these changes, French animation producers have been relocating their production activities from Asia to France, and building new studio facilities in Gaul.

Examples include Xilam, which opened two new studios in 2016, in La Cartoucherie and Angouleme; Superprod which launched a new production studio in Angouleme in September 2015; Kaminka which recently created a new studio in Angouleme; and TeamTO which has revamped its production studio facility in La Cartoucherie.

Gaul’s regions are keen to attract animation production, especially in emerging production hubs, such as the Pôle Image Magelis in Angouleme or La Cartoucherie in Bourg-lès-Valence, near Lyon.

Here, regional support cuts several ways. It’s provided in the form of project-by-project subsidies for programming, and special terms for adapting industrial units to house production studios, such as TeamTO’s recent studio refurbishment.

Gallic domestic financing continues to play a key role in getting French TV animation productions off the ground – according to data from the CNC, 75% of production financing comes from France.

The Annecy Festival’s Mifa market will see a slew of new TV animation projects being introduced to buyers, such as the Cyber Group Studios-sold “Menino and the Children of the World,” produced by Folivari (pictured).

But the sector is not without challenges, especially given that French broadcasters have cut their investments in TV animation by 25% over the last two years – from  $66 million in 2013 to $49.3 million in 2015.

In particular, pubcaster France Televisions slashed its investment in TV animation by one third between 2014 and 2015 – from $31.6 million to $21.8 million.

However Mathieu Bejot, executive director at TV France International explains that this data is actually misleading, because the amounts invested in TV animation are part of a multi-year agreement between France Television and the producers’ association and is fixed at €29m/year (including €26m for TV animation, and €3 m for feature films).

CNC figures are based on the date declared by producers for the beginning of production and given the expected changes in the support mechanisms, some projects were postponed till after January 1 for technical reasons, in order to benefit from the new system. Bejot predicts that the final figures for 2015 and 2016, will show that the amount invested by France Television has remained stable.

Notwithstanding this rationale, other broadcasters have trimmed their investments in TV animation, per CNC data, and this may have been an additional factor that motivated the authorities to increase the tax rebate rates and automatic subsidy support, to compensate for any potential drop.

CNC automatic subsidies now represent 20% of total TV animation budgets. The combined impact of the CNC support and the tax rebate is estimated to be around 35-40% of the total budget.

There will be a case study at a panel discussion on Wednesday in Annecy Animation Festival, organised by Film France in partnership with Ficam, that will include reference to an ambitious foreign animation series, produced by TeamTO that is receiving support under TRIP, and that will be disclosed at Annecy.

During the panel, Pipangaï will also talk about French production “Zombillenium” and SolidAnim will share some of its innovative solutions for animation.

The increased public funding for the sector, which has been a key factor in inciting companies to expand their production facilities in France, nonetheless also poses some dangers, including the risk of cuts to the scheme as a result of curbs on public spending.

One producer interviewed by Variety cited the example of Canada, which has an extensive support system for TV and film animation, and said that he believes that there is a risk that the reinforced French system may increase prices and competition for talent, while running the risk of nurturing more insular productions, less focused on the international market.

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