2022 began with the implementation of French CNC’s reform of the aid system, announced during the previous year.

Indeed, during the summer of 2021, the French CNC adopted new support and measures representing a total of €90 million, including €16.7 million for producers, financed thanks to exceptional French state grants.

We propose below to detail the main new provisions pertaining to cinematographic and audiovisual production.

1. Advance on earnings – Cinema

Advance on earnings is an essential aid in the development and financing of certain auteur or niche films, in particular as it allows to accept low guaranteed minimums from distributors for films that are not very commercial.

Reform restructures the system on an experimental basis by different means:

• Creation of a fourth college dedicated to 2nd and 3rd films
• A total of 4 colleges (compared to 3 before the reform): 1st college for the first films, the 2nd reserved for the second and third films, the 3rd for the fourth films and more, 4th college for the advance after shooting of the film.
• Hearings become optional, at the request of applicants, for the 3rd commission dedicated to confirmed screenwriters and directors.
• Number of members per college will be reduced from 7 to 5
• Each college is chaired by a male figure and a male figure including a producer, who will also attend the committee in order to give the commission and the committee the benefit of his experience.

The objective announced by the new director of the CNC, Magali Valente, is to achieve a « more global balance » in order to better promote the second and third films, which were initially in competition with all the other films except the first work.

Finally, it was decided that the advance on earnings will be granted around €5 million more, with the aim of being able to grant about ten additional advance promises per year (knowing that on average the amount of the advance granted is €480,000). The advance on earnings would then represent a total of approximately €26 million in expenditures.

The composition of the 4 new colleges was announced in September and the CNC is supposed to study its application in the first quarter of 2022 to check that this reform is working properly.

2. Extension of the audiovisual tax credit

On December 28, 2021, a decree created a substantial improvement in the French audiovisual tax credit. The latter is now applicable to the recording of live performances and the conditions are improved for documentaries.

Thus, the following rates and ceilings are now applicable:

• Documentary: The new rate is set at 25% and the ceiling applicable to these works is increased to €1,450 per minute produced.
• Audiovisual works for adapting shows: the tax credit rate is set at 10% and applies to eligible expenses incurred until December 31, 2022.

The audiovisual tax credit is also available to works benefiting from the selective support fund for platform detailed below.

The CNC hopes that such extensions of the audiovisual tax credit will accompany the resumption of audiovisual production initiated in 2021. Indeed, in 2021, the volume of audiovisual production supported by the tax credit exceeded its pre-COVID 19 level with 1 €.4 billion in expenditure and 2,138 hours of programs produced in France.

3. SOFICA

Since January 1, 2022, SOFICAs can participate in the financing of independent distribution companies within the limit of 15% of investments, without reducing those intended for independent production.

In this context, the twelve SOFICAs approved in 2021 managed to raise an overall envelope of nearly €71 million, an increase of nearly €11 million compared to the 2020 collection, which suggests strong support for French production.

As a reminder, SOFICAs are signatories to a charter drawn up by the CNC, which defines a best practices and investment methods. The SOFICAs approved in 2021 will thus devote on average 92% of their non-backed investments to independent production or distribution; 73% of their investments in the form of association contracts to films with an budget under €8 million and 31% of their investments in the form of association contracts regarding first and second films.

4. Selective support fund for platforms

The CNC organized, on a temporary basis and until April 30, 2022, a selective aid system to support the production of audiovisual works intended exclusively for dissemination on VOD through a service whose publisher is subject to the obligations of investment provided for by the decree pertaining to VOD media services.

This fund has a budget of 5 million euros and allows works financed by the platforms and produced by French delegate producers to benefit from selective aid.

Indeed, the beneficiaries of the support are the French production companies acting as delegate producer, whether or not they hold an automatic support account, and which must be independent of the platform.

Eligible works are works defined as independent production defined in the SMAD decree and with a cultural heritage vocation whatever their genre (animation, documentary, fiction, etc.) with the sole exclusion of magazine of cultural interest and sketches. They must present cultural, social, scientific, technical or economic interest and be produced entirely or mainly in in French as original version.

The conditions for producing and financing these works must comply with the current principles of the audiovisual support fund. With regard to the amount of aid, it is recalled that the amount of financial aid allocated by the CNC may not exceed 40% of the final cost of the work and the total amount of public aid may not exceed 50% of the final cost of the work.

Finally, it should be noted that the annual budget for culture in 2022 announced in September 2021 also includes an increase of €250 million in favor of audiovisual and cinematographic creation and that accordingly further announcements should follow.