French TV Animation: Producers Open New Production Facilities in France
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1 French TV Animation: Producers Open New Production Facilities in France Martin Dale Contributor COURTESY OF KOKO MEDIA JUNE 14, :15PM PT Recent moves fuelled by French CNC state subsidies, tax rebates and new digital revenue streams A major overhaul of the French support system for TV animation including an upgrade to the CNC s automatic subsidy support system and a new 25% tax rebate for TV production has encouraged a clutch of Gallic animation producers to open new production studios in France. The dynamic cluster of French independent animation producers are also increasingly attracting partnerships and investors from Hollywood and Asia, a trend that began in film, with joint ventures such as Universal s Illumination Mac Guff, launched in 2011, and which is now extending to TV animation.
2 To date, such team-ups have been agreed on a project-by-project basis such as TeamTO s production of series Sofia The First, for Disney Television Animation, supported by France s Tax Rebate for International Production, a tax rebate scheme for foreign movies or TV series made in France. At the international level, producers now have to cater to a wide variety of different platforms and buyers, unlike the situation prior to 2010 when they were dependent on sales to a smaller number of distribution outlets, such as key buyers like U.S. cartoon channels like Nickelodeon and Cartoon Network. The growth of new revenue streams, whether AVOD (YouTube as so on) and SVOD (Netflix, Amazon, itunes, Hulu etc.), is increasingly important for the sector. The major expansion in the number of distribution channels, including VOD channels, who are acquiring animation projects, has meant that producers are increasingly focused on producing strong brands that can lock up multi-platform and merchandising deals. In the wake of these changes, which provide new revenue streams and greater incentives for domestic production spend, French animation companies have been setting up new offices abroad, especially in the U.S. and Asia, and relocating their production activities to France. This move includes the construction of new studio facilities in burgeoning production hubs, in the South of France. One example: Animation powerhouse Xilam decided to open two new studios in 2016 in Lyon and Angouleme and now operates four production studios in France, employing over 350 people. Here, new distribution channels have proved a key factor. Founded in 1999, Xilam has an extensive library that enables it to generate around 40% of total turnover from library sales. Company president Marc du Pontavice expects that figure to rise to around 50% in 2016, driven by the explosion of new digital channels and platforms. In terms of international sales, 70% come from library deals. Pontavice believes that factors driving his strong library sales include the creation of strong long-running brands, such as Oggy that has yielded 500 episodes, and short formats 7 or 11 minutes which are increasingly popular. Xilam operates a popular multi channel network on YouTube including channels Oggy and Zig & Sharko with a total of over 200 million views per month, sparking significant advertising revenues. Pontavice estimates that his revenues from AVOD platforms such as YouTube are comparable to revenues from SVOD platforms such as Netflix and Amazon. TRIP is another driver. Clement Calvet, prexy of Superprod ( Lassie ) explains that when he heard of plans to launch the new support schemes in mid-2015, he decided to create
3 a new production studio in Angouleme, that opened in September 2015 and currently employs 45 people, aiming to expand to 150 by the end of the year. Superprod is currently working on four TV animation shows Geronimo Stilton, Pat the Dog, Wubby School, and the second season of Lassie, co-produced with DreamWorks Classics. It is also prepping Octopus Garden and two animation features White Fang and Miles, both co-developed and co-produced with Luxembourg s Bidibul Productions. Superprod was founded five years ago. On the basis of its existing catalogue and brands, Calvet is planning to launch a YouTube channel, We have to learn how to become a bit of a broadcaster, he explains. Samuel Kaminka, prexy of Samka ( Eliot Kid ) has just created a sister company in Angouleme that will work on current productions, including The Sisters, for M6, Canal Plus and RTBF, The Wolf for TF1, and hybrid live-action/animation series Ray and Ruby for pubcaster France Televisions. The Angouleme studio will employing around 100 people by mid-2017, he estimates. CGI studio TeamTO ( Yellowbird ) recently opened an office in Beijing, to complement those in Paris and Los Angeles. One of the key goals is to adapt Chinese brands to the international market. It has experience: Oscar s Oasis, based on a 30-second short created by South Korea s Tuba was co-developed by TeamTO into a 78-part shortformat series sold to Cartoon Network Latin America, Disney Asia and Netflix. The company is developing two feature films based on Chinese IPs, but can t disclose the titles at present. To take advantage of the new French tax rebate and CNC subsidies in late 2015 TeamTO revamped its production studio facility in France, in Bourg-les-Valence, near Lyon, increasing staff from 140 to 220. TeamTO has actively courted foreign productions via Gaul s TRIP international rebate scheme, including Sofia The First, for Disney Animation and Activision Blizzard s Skylanders, both approved in late 2015 and currently in production. In addition to revenues from SVOD platforms, TeamTO is generating significant revenues from video games based on its brands including Angelo s Rules, which has sold 2.2 million units via the Google play store. TeamTO s principals Corinne Kouper and Guillaume Hellouin, explained to Variety that they are about to launch a new skateboarding game, also based on the Angelo s Rules franchise, for which they have high expectations. You need a few strong IPs, that s the key issue, suggests Hellouin. Even for operators with strong YouTube channels, they often make more than half their revenues from a single franchise. Kouper says that the new digital platforms, including games, are growing rapidly, but their core business continues to be to develop a hit for TV or in the cinema and then
4 expand citing the example of Angelo s Rules which has been sold to over 150 territories. We will not modify the way that we produce in order to accommodate digital platforms. We feel that digital platforms serve to strengthen the brand and the IP. We have a strong feeling that digital is very flexible. TeamTO aims to reinforce its feature film production and is currently developing The Artificials, and Snatches of Memories, which it plans to co-produce with Canada and/or Belgium. Founded 11 years ago, at present 80% of TeamTO s turnover is derived from new productions and 20% from library sales. but Kouper and Hellouin believe, however, that the company is now entering a second cycle, in which library sales will progressively increase. The company recently began placing its videos on YouTube but has not yet established an active set of channels. Hellouin emphasizes that competition between different digital platforms has put content center-stage: 10 years ago, the networks were the kings, but now content is the king. It s very exciting for us. There s a tremendous appetite for good content. Not all companies are rushing to launch studios or scale up their capacity. David Michel, president of Cottonwood Media ( The Ollie & Moon Show ), part of Paris-based production-sales powerhouse Federation Entertainment, is enthusiastic about the boost provided by the new rebate rates and CNC subsidy support but does not plan to develop an in-house production studio at present. When you have an in-house animation studio, you develop a company culture and a signature, but it limits your variety and your capacity to deliver the unexpected. The fastchanging market requires more agile companies that can work with different talents, Michel argues. Michel is focusing on a model in which over 50% of revenues are generated from outside France, and is also prepping his first CGI animated feature, which Michel hopes to finance solely within France. Current projects include The Ollie & Moon Show for Sprout, Netflix and France Television, Franco-Canadian co-production Squish, for Gulli and Teletoon, and teen live-action series Paris Opera Ballet with ZDF & ZDF Enterprises. And other challenges remain, such as the need for more regional support, Kamika argues. In conjunction with other producers based in Angouleme, Kaminka is lobbying for more streamlined regional support for animation in the wake of the fusion of three former French regions Poitou-Charentes, Aquitaine and Limousin into a single mega-region. Kaminka believes that equity investments by producers will be increasingly important in order to capitalize on new market trends and not just depend on pre-sales. He cites the example of feature film investment funds such as the one created by bank Natixis Coficine, of the Groupe BPCE, and believes that there is room for a specific investment fund targeting animation.
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