After long discussions between TV channels, VOD platforms and film organizations a new agreement was signed on January 24 to establish the new French media chronology, which provides for timeline to broadcast cinematographic films after their release in theaters.
This agreement is concluded for a period of 3 years and an initial assessment of its application will be established after one year. In addition, no later than 12 months before its expiry, the signatories will meet to agree on its renewal or its adaptation in view of the evolution in the field. In this respect, the SACD (French collective management organization) refused to sign the agreement stating that its duration was too long given the rapid developments in the sector.
We provide below a summary of the provisions of the signed agreement, which completes the SMAD decree that established an obligation of the VOD platforms to contribute the financing of the production of films and audiovisual works.
At first, the new media chronology extends over a shorter period, than the previous chronology, and lasts 36 months compared to 44 months in the 2018 agreement. This shortening accounts of the new market practices and the rise of video-on-demand broadcasting by pay-per-view or through subscription. Accordingly, this new chronology allows better availability of films for the public.
The signed chronology is very close to the joint proposal of Blic, Bloc and Arp (French film organizations) established in July 2021, and the latter expressed their enthusiasm following the signing of the new agreement. Canal+ has also been very enthusiastic about a modernized timeline that it says recognizes Canal+’s unique position in the film funding system.
The exclusivity of cinematographic exploitation remains of 4 months from the theatrical release (M+4).
The derogatory lower deadline of 3 months (M+3) established in the 2018 decree is also maintained under the same conditions: less than 100,000 admissions in the first four weeks of the theatrical release.
In order to ease this derogation, CNC commits to « automate the authorization delivery process », as underlined by Olivier Henrard, Deputy CEO of the CNC, during the press conference preceding the signing of the agreement.
Video (DVD, Blu ray) and video on demand exploitation still come immediately after the theater window, therefore M+4 (or M+3 with derogation). An effective exclusivity of 2 months is guaranteed for works not transferred in the first Pay TV window with agreement, and up to 5 months for the others.
We can highlight that the exploitation of a film by a television service or by another category of on-demand audiovisual media service cannot prevent its exploitation by an on-demand audiovisual media service with payment per view.
The windows for Pay TV specializing in the cinema depend on whether or not an agreement is concluded between the TV channel and the professional organizations of the cinema.
As part of an agreement, operation can begin from the 6th month (M+6), for an exclusivity period detailed in the agreement. For example, exclusivityis set at 9 months in the Canal+ agreement signed in December 2021.
Without an agreement, first Pay TV window begins in the 9th month (M+9) and cannot continue beyond the 17th month or the 15th month if the film is pre-financed or acquired.
Second Pay TV window begins in the 15th month (M+15) for services that concluded an agreement with professional film organizations, with an exclusivity period not exceeding 7 months or at the end of a period of 17 months for services without an agreement.
In both cases, exploitation is interrupted beyond the 22nd month if the film is pre-financed or acquired by free-to-air or pay TV services.
The exploitation of a cinematographic film by an SVOD platform can fall under 3 situations.
If there is an agreement and if the film is not under exclusivity in other windows, the release can begin from the 6th month according to the term of the agreement and under the same conditions as for the first Pay TV window with agreement. If no deadline is specified in the agreement, the window for the signatory services then begins at the end of a period of 15 months, with an exclusivity of 7 months.
If no agreement is signed, release is possible after a period of 17 months, with an exclusivity period set at 5 months
For example, the delay before the Netflix window is more than halved and thus goes from +36M to +15M. However, it remains necessary to see the use that will be made of it and how Netflix will actually distribute its investments.
Co-exploitation agreements may take place under specific criteria and conditions :for films not pre-financed or acquired by a free-to-air channel, SVOD use can be extended beyond 22 months. This automatically applies for films with a production cost under €5 million. For films with a budget equal to or greater than €5 million, this extension is possible with an agreement between the parties regarding a particular film or on a catalog – an exclusivity for a minimum of one month is guaranteed for the first broadcast on the TV channel
Such extension may also apply to films produced by SVOD platform,s provided that their individual production cost is not higher than €25 million, and not taken into account as part of the platform’s contribution to the development of the production of the decree SMAD.
Unencrypted TV channels benefit from the following windows : if they contribute to film production for at least 3.2% of their turnover : in the 19th month (M+19) for films not acquired on second-window pay TV or via an SVOD platform or at the 22nd month (M+22) for films passed through these windows. Exclusivity cannot exceed 14 months. This delay is reduced by 8 months compared to the 2018 chronology. On the contrary, if their contribution to film production is under 3.2% of their turnover: their window is fixed at the 30th month (M+30)
Finally, free video-on-demand services benefit from a window starting 36 months from the date of theatrical release (M+36).
As an exception, some films can be exploited within 12 months of the theatrical release under strict conditions. Are eligible documentaries, with a certified cost under €1.5 million if the exploitation rights have been submitted to all the publishers of services falling within a window of less than 22 months, which did not give rise to any purchase or pre-purchase and fiction with a certified cost under €1.5 million
It should be noted that among the major VOD platforms, only Netflix is signatory of this new agreement. Neither Amazon nor The Walt Disney Co. wanted to sign the deal.
With regard to the non-signatory parties, an extension agreement was taken on February 9, 2022 in order to make the agreement applicable to all, for a period of three years. In order to take into consideration the meeting clause, the decree provides that the extension itself will be the subject of an evaluation by the public authorities, in consultation with the sector and the broadcasters, at the end of each twelve-month period of application.
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