Methodology, Skills and Professional Benefits Participants Participants' Comments MEDICI Coordinator and Head of Studies «The 12 Labours of Hercules» Report of the Reports – Workshops 1 to 4

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Eighth Workshop – 26 to 28 September 2018, Royaumont Abbey, France

Module 1a - Panel: Co-operation between funds means mainly supporting co-production

Co-productions involve funding partners from different countries. The support of public bodies in those projects represents more than 50% of their financing. The funding bodies have different cultures, different funding processes and sometimes require for the projects they support to be co-produced under official co-production treaties. The panel participants took a closer look into how to work with those treaties and what it means to work without such treaties.

Panel participants:
Roberto Olla (RO), Executive Director of Eurimages
Lene Børglum (LB), Producer/CEO at Copenhagen-based company Space Rocket Nation
Jacques-Henri Bronckaert (JHB), Manager and Producer at Versus Film Productions (Belgium)
Michel Plazanet (MP), Deputy Director/International Affairs (CNC)
Anna Serner (AS), CEO of the Swedish Film Institute

Moderator: Inga von Staden (IVS)

Group
IVS: Eurimages is the European task force for international co-productions. Do we really need this?
RO: That is actually the question that we are asking ourselves right now while Eurimages is going through a large evaluation process. This evaluation is not only dealing with the performance of the fund, but also with its governance. Is our mission the one that was given to us by Member States nearly 30 years ago? The purpose of the evaluation is to provide possible answers. The feeling I have is that Eurimages started 30 years ago for the purpose of stimulating co-productions when there were very few of them. There were countries like France and Italy that were already champions in co-productions and many other countries that did not have at all. But, today, Europe makes nearly twice as many films as the US. Many of them are co-productions that circulate across many countries. Therefore, our role has changed and now we are trying to stimulate the kind of content that the market alone is not able to produce. When I was writing my PhD, I remember that Channel4 in the UK was given the mission to produce anything that BBC could not/would not deliver. I think that Eurimages has a similar approach. We should be helping producers and filmmakers to take risks as long as the quality is there and as long as the content they produce circulates.
LB: Throughout all the years that I have been in the film business, Denmark has been in need for co-production. When Zentropa started co-producing in the early 1990s, a typical Danish film was financed 90% by the Danish Film Institute and the TV sale. But then, the support went down and it became more and more necessary to co-produce. It is still like that. The contribution of all financiers is constantly going lower and projects have to be more and more commercial at the same time. Projects could not be anymore either commercial or a good quality, they have to be both.
IVS: On top of these criteria there are also co-production treaties that France is in particular strict about. CNC even made requirements for treaties to be stricter. Can you tell us something about that?
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MP: We already have 57 co-production treaties. It is maybe too much, because signing treaty is one thing, but implementing and assessing them is much more difficult, especially if you want to do it seriously. France is a particularly attractive co-production partner because there is a lot of both public and private money. Everybody wants a treaty with us. Hence, we took a political stance and added additional requirements regarding the future co-production treaties. We want first to ensure that the other country shares the same values with France. The first of those values is respecting cultural diversity expressed through ratification of the UNESCO Convention on Cultural Diversity from 2005. Second, we do not want treaties with countries that liberalized their audiovisual services and refused the cultural exception under the pressure of the USA. We refuse working with those countries because there cannot be any reciprocity with them. Another problem is the scope of these treaties. In many cases they cover only theatrical films. But should it include also TV and other formats?
IVS: Jacques-Henri, you are co-producing a lot with France. How is it for you to co-produce with a country that is very strict about the treaties? Does it make life of a Belgian producer more difficult?
JHB: Belgium is a small country that always needs money from abroad, and France is our natural partner because of the language and the size of the market. According to me, a good co-production is based on a good relationship and sharing different things, especially creative aspects. The problem with France is that they are overprotective of their national culture. Let’s take an example of the tax-incentives. If you spend money in Belgium, you receive some money back on the basis of the Belgian tax-incentive and you can combine that money with the additional support from regional funds, from the TV, etc. When Belgium is a minority co-producer, criteria are not too strict for the Belgian money. A bit of post-production or one key-technician is enough to justify the support. Sometimes even purely financial co-production can go. However, when I work on a majority Belgian co-production and wish to shoot in France, I have no access to the French tax-incentive money. Of course I can get money from TVs, distributors, CNC (if I earn enough point and have a certain cultural quality). But if I only want to shoot in a French region and spend a lot of money there, I still can only get some regional public funding and that’s it. There are no shooting incentives there unless you have a big American film or a Luc Besson’s film, in which case you can have access to the French tax-incentive.
IVS: It seems quite complicated. I heard you are running a back-office just to handle all that work.
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JHB: Workload today is huge. My job is complex; I need to produce, to develop, and to think about creative and artistic aspects. But there is also a lot of paper work. Bureaucracy is huge and even nightmarish sometimes. Film funds have different application systems. Eurimages is in fact an example of a really complicated system. Paperwork is much bigger now than ten years ago. I have to employ a lot of people to do the paper work, write all the reports, etc.
IVS: Does co-production become more expensive if you do an international co-production?
JHB: Of course. It happens due to the benchmarks. There are collective agreements regarding technicians, etc. All that increases the budgets.
IVS: The Nordic countries collaborate really well even without the treaties? Do we really need the treaties?
AS: The Nordic region has been co-producing for decades without any treaties. That is partly because we are very close geographically and we know each other very well. People are working across the boarders a lot. With Finland, for example, we do not have the same language, but almost 5% of the Swedish population is of Finnish origin. We want to have films that will target them. That is the reason why we co-produce with Finland. However, the treaties would not improve anything. In Sweden we want to co-produce only with countries where we feel that our film industry can benefit from getting more jobs for Swedes and attracting productions to Sweden. Producers need to work on long-lasting collaborations with international partners from which they can constantly learn new things. Creative exchange also matters to us. The Swedish Film Institute insists on films that feature creativity and quality. We measure quality primarily by looking into the relevance, urgency and originality of the story. The SFI also insists on gender equality. That explains why we see more and more foreign project by female directors, applying for Swedish money. In 2017, 50% of Swedish co-productions were by female directors. It proves that there is always a reason why people want to co-produce with certain countries, but I do not think a treaty is ever a reason. It is also important to say that we have recently decided not to sign the treaty with China even though there was a pressure on us to go for it and take advantage of the vast Chinese market. But we gave up eventually, because we do not share the same values with China. The Chinese money will always be subject to the conditions that are against the freedom of speech. For example, there is the ban on screening of Swedish films in China due to a Swedish-Chinese diplomatic war that started when a publisher from China emigrated to Sweden some years ago. At the same time, we saw Denmark spending many years working on the Danish-Chinese treaty, but they never seen any effect of it.
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IVS: It sounds to me like you are using a lot of soft criteria, which makes it very difficult to apply a point system. But, on the other hand, co-productions work with point systems. How does it work together?
AS: We could add a point system to measure the quality of the craft behind a film. But when it comes to evaluating the quality of a story, I think no country has a point system for that.
MP: In France, we do have a point system. To be approved by the CNC as an official co-production, you need to qualify as European. There is the point grid and you need to have 14 out of 18 points to qualify. And we do not co-produce without treaties, so, for example, we cannot co-produce with Japan because there is no treaty with Japan and Japanese films can never qualify for the CNC support. Additionally, you need to have 25 out of 100 points within the CNC point system that deals with the nationality of the crew and the cast, country of shooting, country of post-production, etc. to be recognized as a French project and have access to CNC money.
IVS: So how do you evaluate soft criteria at the CNC? Do you have Aide aux Cinemas du monde for exercising soft criteria?
MP: This fund aims at cultural diversity and helping especially young filmmakers from all over the world, so we are not demanding at all regarding the French spend. Only half of the grant needs to be spent in France. Within this scheme, we, for example, have films that are entirely made in Brazil and only post-produced in France. We support a lot of South American and low-budget US films. Aide aux Cinemas du Monde is open to all countries in the world, including the USA and Japan. As such, this scheme is complementary to CNC’s policy for official co-productions that insists on economic and industrial goals. However, there are several limitations within this scheme as well. First, there is the point system there as well. You need to score 20 points to qualify or 15 if you come from a developing country and the way we define developing countries is wide, so many countries are included. Second, if France does not have the co-production treaty with a country, the budgets must be within certain limits, because films with the budget above 2.5 million must be official co-production. Finally, the scheme is highly selective and aims at the crème de la crème of the world cinema.
RO: We need to go back to the basics and remember the reason why treaties were invented. Treaties exist to provide nationality to the films that are not 100% national. It is a “legal fiction”. So a film that is 60% French and 40% Italian is considered to be as 100% Italian in Italy and 100% French in France. That is the logic and it would be very simple if we kept it like that. However, many countries did not. In France, the biggest chunk of money that is given to co-production comes from the automatic support scheme. The selective support scheme is a way smaller. So the qualification under a bilateral treaty directly means qualifying for benefitting for that kind of money. Hence, France had to introduce very strict requirements to be considered as compliant with a Treaty, because they cannot “open the tap” too much. If they do it, then everybody would qualify for the French automatic support scheme. That also explains their complex point system. Treaties as such are not a rocket-science, but the way they are interpreted within different member states makes it rather complex. Scandinavians do not make such a big fuss with their treaties. They provide official co-production certificates only when Eurimages demands so, they do not need it between themselves. Also, Eurimages will support non-official co-productions as long as countries do not have a treaty. I think we should ask ourselves the following question: Many years ago we created co-pro treaties because without a treaty a co-produced film would not benefit from public funding in each country. It was a way to give the legal stand to projects that on the paper did not qualify as they were not 100% national. Now we have 30-40 years of experience, even more. It should have created enough knowledge, know-how and trust by now so that we can remove treaties where they are not necessary. But we also have different administrative cultures, different traditions, different amounts of money and different business practices across Europe. In Sweden, it is normal that one person (commissioning editor) decides of behalf of the public fund which projects to support, but that system would create the French Revolution in France or Italy. To conclude, the problem is not the text of the treaty as such, but the people who interpret the same treaty in different ways, on the basis of their cultural background.
AS: The purpose of treaties should be to facilitate the trade between two countries. All countries will always demand local spend, because it is our tax-payers money. Eurimages is a good example of the funds that give money without having too many requirements. Their only requirement is “quality”. Maybe more national countries in Europe can follow the same example. On the other hand, how do we make treaties simpler? They are too political?
RO: Eurimages supports some films that are very delicate and different. Without Eurimages’ money they fall apart and cannot exist especially if they are coming from fragile countries. Or they are done with fewer resources and you can see it on screen. However, at the same time, we have to support a number of projects that I personally qualify as less-pertinent. They are not bad films. If they were bad, they would not get funding from Eurimages. But they are done just because the European financing echo-system allows them to exist. I am talking about mechanisms such as tax shelters and alike. Treaties contribute to this situation because they provide a legal framework for these kind of projects: they qualify as national thus they become eligible for fiscal incentives/tax rebates. Through this logic, producers make films that are not necessarily bad as such, but are simply not original. They maybe attract a limited audience, at best…. Projects like this are easy to understand at financing stage because of their classical narrative and easy identification with the characters. But those projects are eating up resources for more daring concepts. Less-pertinent projects are funded by all public film funds in Europe. Once they have at least 50% of financing in place, then they come to Eurimages for a final top-up. How do we break the vicious circle? Maybe the way out would be to reduce the number of less-pertinent projects at both national and regional level. This seems to be the biggest problem because the system created a bubble where many films are made through public money, but only a part are good, creative, daring, original. Eurimages comes at the end of the financing process, it is hard for us to break a circle that is rooted and national/regional level.
IVS: What about the demands regarding the regional spend and effect?
LB: Those demands are fine when you need to shoot in a particular region. But sometimes it is not enough just to shoot and engage some local crewmembers. Locals have to be also heads of departments, etc. If you have to do it like that in several regions than it requires more logistics and increases the budget.
JHB: Some regional funds are very demanding. Screen Brussels for example has the regional requirement spend of 800%. It is not officially written in the rules, but the competition is tough and if you want to get the money the spend must be that high.
IVS: Let’s look into distribution now. There is a whole new playing field now – international platforms. They are mostly US-based and tend to avoid the requirements that national countries have. They are outside the treaty system and totally private. They are on the stock market and owned by investors. But They are playing an increasing role in distribution, but also more and more in production. They are also ensuring easy access to the content and thus eradicate piracy.
LB: We had one film that in the US was first released on the VoD for one or two weeks with special, high-price screenings. It was very popular. Then it was released day-and-date on all VoD platforms and theaters. It was extremely successful in he US considering that it was an independent production. There was almost no piracy in the US, whereas in the rest of the world it was among the top 10 most pirated films for three years (especially China, Russia and Eastern Europe).
IVS: But in the economy driven by accessibility, can you still work with making things inaccessible? From a digital, interactive media perspective, it is not a good idea because it promotes piracy.
AS: In Sweden we have a very strict timeline about how to release a film and the exhibitors refuse to change that. Some countries have opened up for working with Netflix. We all have problems because they do not report the numbers. But we need to change despite these challenges.
IVS: Should public money go into financing content for Netflix?
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LB: I chose another transactional VoD platform. But if you produce a film and sell it to Netflix, then you do not get revenues that you normally get by pre-selling a film to other countries.
JHB: We are preparing a film for Netflix right now. It is a film for teenagers, made by a first time director. We developed the project, and then received the financing from Netflix and now we just need to do it. But we have to follow Netflix’s rules. They will keep all the rights for 15 years.
RO: But the question is: would it be acceptable that a film that has been co-produced with public support from different countries and Eurimages and that attracted no distributor’s interest be sold to a digital platform that takes all the rights, including theatrical, for 15 years? Some digital platforms limit as well festival exposure. On the other hand, if you do not sell it to digital platforms maybe the film will not be distributed at all. Some digital platforms are however becoming more and more flexible by allowing festival exposure as well as day-and-date releases. Apparently even Netflix allows a limited theatrical release in selected cinemas through the day-and date approach. But should public money be invested in such films? Especially if we know that Netflix does not report data back to funders.
MP: In France, everything is based on the holdback system. Day-and-date is prohibited, and VoD platforms have to wait three years after the theatrical release, which should be reduced. So producers are afraid to make VoD deals because if they do not follow the holdback system, their films do not receive financing. But without the holdback system everything would collapse. If Netflix wants to be a part of the system, they have to follow the rules of our game. At the moment, they do not respect our rules. They address French companies, but they do not pay any taxes, etc. They are US-based and contribute nothing to the CNC unlike movie-theaters, distributors, TV channels, Internet providers, etc. Thus, as producers, they do not get any support in France. In addition, we have recently introduced the levy that they shall pay to the CNC (like it is in Germany) based on the turnover they have on the French audience. They challenged it on court, but we still hope they will in the end contribute around 2 million euro for this year because the number of subscribers is increasing fast like in all other countries. Unfortunately, Netflix has a lot of lawyers; it is complicated to fight with them.
LB: In Denmark, there are so many Netflix-financed productions going on at the moment and they take all crewmembers and film workers. It is difficult to find people when you have a regular film project. Crewmembers are also getting more and more expensive because Netflix pays very well and increases the fees. Therefore, people work mostly on series now, they are booked for months not just a couple of weeks. And nobody has time for regular feature films now.
IVS: Do these platforms in any way contribute to cultural diversity and gender equality?
AS: No. It is up to us, as countries, to make sure that our taxpayers’ money is used for production of high quality, cultural content created by the talent in a widest sense, not only by white, male talent.
RO: Eurimages supported few films that were acquired by Netflix after completion of the film (as an acquisition). Producers sold those films as they really had not alternative: if Netflix did not acquire them, they probably would have had a very limited theatrical distribution or no distribution at all…. Netflix conditions were very tough. But producers had no choice. That is why we tolerated it.

Cooperation between public funds in an increasingly complex and international environment: opportunities, actions, ideas

Illustrations by KAK

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