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French class

Implemented in 2021, France’s plan to fold international streaming platforms into its regulatory framework—and have them help fund French content—seemed ambitious. Set against the backdrop of Canada’s Bill C-11, which is now law, we look at how France’s efforts are playing out today, and what Canada can learn from our French counterparts

Just over a decade ago, France found itself in a sticky predicament. Known for prizing its national culture, the government planned to digitize and restore 1,000 French films, to preserve them for future distribution and prevent them from vanishing into the past.

The plan hit an unexpected roadblock. It turned out that the material assets of all of the French feature films coproduced with major American studios in the ’70s and ’80s—films starring screen legends like Jean-Paul Belmondo and Catherine Deneuve—were in the hands of those studios, languishing on crammed shelves in California storage lockers. The studios told the French stakeholders that digitizing the films wasn’t a priority, and that was that.

“It was a grotesque situation,” says Jérôme Dechesne of France’s producers’ union, the Union syndicale de la production audiovisuelle (USPA). “Assets for French films that we had hoped to preserve were now out of reach to us. It was a shocking realization for all French stakeholders.”

France had learned the hard way that only France could be counted on to protect its cultural heritage. Fast forward 10 years to 2021, when France put its stake in the ground with the introduction of the Services de medias audiovisuels à la demande (SMAD) decree—which compels all international SVOD platforms operating in France to invest a percentage of their French revenues into local production, just as French television channels have long had to do.

Sound familiar? The French experience has many parallels to Canada’s own efforts to regulate global streaming services, but since France is further along in its journey, it’s worth highlighting several areas where we might follow its example (or simply take heart that the battle is not in vain).

Investing in independent

In France, L’Autorité de régulation de la communication audiovisuelle et numérique (Arcom)—the French counterpart to our CRTC—oversees the implementation of the SMAD decree, which stipulates that on-demand streaming services must invest at least 20 per cent of their annual gross revenues earned in France to financing French or European TV or film content (split 80/20 between TV and film, respectively). And this is on top of a 5.15 per cent tax already charged to streamers and other international platforms, including YouTube, to contribute to the audiovisual support fund run by the Centre national du cinema et de l’image animée (CNC).

It gets more specific, with investment to be allocated across a variety of audiovisual works (drama, animation, documentaries) and feature films, depending on the platform’s focus. As well, at least two thirds of the investment in TV must be funnelled into independent production.

While France is not the only European country to have production obligations in place for foreign streamers, its investment targets are higher than most. The result? The streamers’ audiovisual expenditures in France in 2023 have reached the equivalent of C$432 million, with spinoff benefits reaching nearly $1.5 billion.

IP retention or bust

One of the SMAD decree’s fundamental principles is protecting the IP of French creators, and it accomplishes this in a clever way: first, as noted above, by insisting that a large percentage of investment goes toward independent production (where the streaming platform has no shareholding interest), and second, by refusing to allow streamers to hold rights in perpetuity.

What is notable is that the streamers can only hold the rights to an independent production for a maximum of six years, and exclusive rights for three years. If a streamer wants to maintain the rights, they must actively renew them under specific terms. This allows companies like Netflix—which places exclusivity at the centre of its business model and “lobbied the government hard” over the issue, according to Dechesne at the USPA—to have it their way, but only for so long.

Critically, this principle “allows French producers to be the decision makers. This can lead to spinoff opportunities, adaptations, format sales and new revenue,” says Dechesne. “Moreover, it allows all rightsholders—including co-producers, writers, actors, et cetera—an opportunity to also realize additional revenue from these renewals, in a virtuous circle.”

After the kicking and screaming, peace

Nobody involved would say negotiating with the streamers was a walk in the park, with foreign companies chafing especially at the obligation to invest in independent French-language works. But the French stakeholders respected their own right to be at the negotiating table, and fought the impulse to water down their ambitious goals.

That was then. The dust has settled, and the system now seems to be humming along quite nicely.

“Particularly at the time of the establishment of the SMAD decree, there were threats—or grave concerns— on the part of many players. Today, two or three years later, these concerns have been swept away and we are in the process of undertaking new interprofessional negotiations,” says Dechesne.

To see France on the other side of its own legislative upheaval, smiling and in good health, is a bracing reminder to our own lawmakers and stakeholders to stay the course. Aim high. And insist on independence.