France has adopted a decree as part of the implementation of the Audiovisual Media Services (AVMS) Directive into French law, which extends financial help for audiovisual and cinema productions to foreign on-demand services and requires 15% to 20% of the turnover achieved in France to be dedicated to the production of European and French works.
The Decree No 2021-793 was adopted and officially published on 23 June, as part of the French implementation of the (EU) 2018/1808 AVMS Directive – and despite the negative opinion of the European Commission issued on 19 March 2021.
Foreign on-demand services
The Decree entered into force on 1 July and replaces the Decree No. 2010-1379 of 12 November 2010. It amends the existing financial contributions to the production of European and original French-language cinematographic and audiovisual works imposed on on-demand service providers under French jurisdiction.
By derogation to the "country of origin" principle, the Decree extends these financial contributions to service providers located outside France as long as they target French territory and that they (i) offer at least 10 feature-length cinematographic works and/or 10 audiovisual works and (ii) meet the following turnover and audience related thresholds:
- net annual turnover derived in France over €5 million (instead of €10 million as previously applicable);
- audience of more than 0.5% of the total audience in France for the category of on-demand services to which the service belongs (new criterion introduced as of 1st July).
On-demand service providers are subscription, pay-per-view or free video-on-demand services as well as catch-up TV services, and mainly target Netflix, Amazon Prime Video and Disney.
European and French works
Subscription services shall dedicate each year at least 20% of their turnover to contribute to the production of European or French-language cinematographic and audiovisual works. This participation is increased to 25% when they offer at least one feature-length cinematographic work per year within a period of less than 12 months from its theatrical release in France.
Pay-per-view or free of charge services shall dedicate to the production of works:
- 15% at least of their annual turnover derived from the exploitation of cinematographic works (of which at least 12% must be spent on original French-language works); and
- 15% at least of their annual turnover derived from the exploitation of audiovisual works (of which at least 12% must be spent on original French-language works).
Catch-up television services (except for those located in France) shall mirror the contribution dedicated each year to the production of European or French-language cinematographic and audiovisual works by the television service from which they derive (Decree No. 2010-416 of 27 April 2010).
Reductions in these rates will be provided if the turnover is less than €10 million or if the service has been marketed in France for less than three years.
Types of contribution
The contribution may take various forms listed in detail in the Decree, such as, for example: purchase of exploitation rights; investment in producers' shares under certain conditions; financing of writing and development work; financing of authors training; safeguarding, restoration or enhancement of original French-language cinematographic and audiovisual heritage works; adaptation for people with disabilities or financing for dubbing, subtitling and promotion.
A significant part of the contribution should support independent production: three quarters of the contribution for the development of independent film production and two thirds for audiovisual production. Diversity clauses are also anticipated to avoid the contribution concentrating on big budget works or on certain genres rather than others (for example, animation).
This Decree also contains provisions to ensure the effective supply and promotion of European and original French-language audiovisual and cinematographic works, as well as measures relating to advertising, teleshopping and sponsorship.
Osborne Clarke comment
The Decree is the first part of a critical reform of the financing regime for audiovisual and cinematographic creation. It will be completed by a reform of the financing obligations applicable to television services and a modernisation of the media chronology.