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Overcoming the Incoherent ‘Grand Maneuver’
in the French Film and TV Markets: Lessons
from the Experiences in France and Korea
Jimmyn Parc
Sciences Po Paris and
Seoul National University
Patrick Messerlin
Sciences Po Paris
Abstract
In 1989, the Member States of the European Union integrated their TV markets together in order to create a larger and more
open ‘single TV market’through the Television without Frontiers Directive. The French film industry used this opportunity to
extract additional revenues by implementing TV quotas and strengthening the chronologie des m
edias. This paper examines
the impact of these two measures on the French film and TV industries and shows how they were incoherent. In contrast to
the expectations of the French film industry, these measures have induced it to produce less attractive films and burdened
the TV industry with increased regulatory costs. While the government poured massive subsidies into the filmmaking sector,
this endeavor has not been able to significantly improve the attractiveness of French films. In this regard, the Korean film
industry offers valuable lessons. Since the late 1990s, the Korean government has significantly reduced its level of protection-
ism and scaled back its intervention in the industry. Crucially, business has been the main engine to produce attractive films
that can compete with Hollywood films in the open market. For the French film industry, the findings in this paper suggest
which direction its Grandes Manœuvres should pursue.
In the 1980s, the television (TV) market emerged as an
important source of revenue for Hollywood often making up
for the losses brought on by films that had flopped at the
box office. Even successful films could earn additional rev-
enues which made home entertainment a win-win situation
for the Hollywood studios. By the late 1980s, this industry
had become well developed in the United States as the
price of videotapes had come down and cable TV subscrip-
tions were increasing among households. Soon, TV became
the dominant force in the US audiovisual landscape; in
1990, it represented 43 per cent of the global earnings for
Hollywood studios, compared to 29 per cent for movie the-
aters (Epstein, 2010). In fact, this ‘revolution’changed the
management structure among Hollywood studios as new
executives with backgrounds in the TV industry began to
replace the film moguls (Epstein, 2010).
In Europe, this transformation was seen as inescapable
and there were fears that this would also lead to the contin-
ued dominance of Hollywood in their markets. As a result,
the Member States of the European Union (EU) sought to
mirror this trend as quickly as possible in order to enhance
their competiveness. Although they recognized the TV
industry as a potentially lucrative source of revenue, their
efforts were restrained by the fact that in the late 1980s
many TV stations in Europe were state-owned and/or con-
trolled by outdated national regulations. Given the compli-
cated bureaucracy associated with these institutions, it
would take a full decade for this process of privatization
and modernization to be fully implemented. In the mean-
time, the idea of creating a ‘single European TV market’was
pursued as a way to speed up change in this sector and the
‘Television without Frontiers’(TVWF) Directive was imple-
mented in 1989. It is notable that this process was largely
led by the state and not by business as had happened in
the US.
Thirty years have passed since the launch of this initiative
in the European TV market which makes for a good time to
assess its results and understand its true impact. Did this
policy initiative help to improve the situation for Europe’s
film industries? And to what extent did it enhance the com-
petitiveness of these film companies in their home market
vis-
a-vis Hollywood? Such an appraisal though is difficult to
approach from a broad European level given that each
Member State has had a significantly different view on how
to interpret and implement key provisions of the TVWF
Directive.
Given this challenge, it would be more effective to
explore the case of France, a country which adopted an
Global Policy (2020) 11:Suppl.2 doi: 10.1111/1758-5899.12836 ©2020 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 11 . Supplement 2 . June 2020 31
Special Issue Article
extreme position during the negotiations on the TVWF
Directive by insisting on strict quotas for the broadcast of
EU and non-EU films on TV. It is noteworthy here to men-
tion that since 1989 successive French governments have
also reinforced three main domestic policies toward its film
and TV industries: increasing the level of subsidies, strength-
ening the existing chronologie des m
edias or the mandatory
film exhibition period which extends from movie theaters to
streaming platforms, and tightening regulations on broad-
casting slots for films on TV.
1
This paper seeks to analyze
the impact of these measures upon the French film industry
over the last thirty years.
Examining such a case by comparing France with a coun-
try that has a comparable size of film market –in terms of
film production and admission numbers –but without the
aforementioned measures would be more meaningful and
help provide important context to this assessment. In this
respect, the most suitable example would be Korea, a mar-
ket that meets all these conditions (Messerlin and Parc,
2014, 2017; Parc and Messerlin, 2018). It does not enforce
regulations on the broadcasting of films on TV, rather it has
followed a similar path with the US ‘home entertainment’
industry. Thus, we see that the Korean film industry is more
business-orientated and has faced little government inter-
vention since the late 1990s.
The comparison between France and Korea is all the
more interesting as the Korean film market has grown very
fast and has even outperformed the French film market
despite its smaller population: as of 2019, France has 67.0
million while Korea has 51.5 million. The numbers on these
two film industries speak for themselves. Over the last three
decades the Korean film market has caught up with its
French counterpart; it amounted to only 20 per cent in
1989, 50 per cent in 2000, 80 per cent in 2010, and 142 per
cent in 2018. Crucially though, until 2007, the Korean film
industry did not receive any significant amount of subsidies
which is in stark contrast to France. Even after this date, the
amount of subsidies has been significantly smaller than
what the French film industry enjoys (Messerlin and Parc,
2017). In this regard, the puzzling stagnancy of the French
film industry under the TVWF Directive, particularly with the
aforementioned regulations, deserves to be thoroughly ana-
lyzed.
In addressing the differences between these two
approaches, this paper is organized as follows. The first sec-
tion analyzes the main features of the TVWF Directive and,
more importantly, the way in which France has imple-
mented them. The second section examines the true effects
of the so-called ‘TV quotas’by comparing the long-term
evolution of the French and Korean film markets. The third
section scrutinizes the regulatory costs of these TV quotas.
The fourth section analyzes the subsidies on the French film
and TV industries and evaluates their financial costs. The
fifth section explores the core issue on how to enhance the
competitiveness of the French film industry through a com-
parison with the Korean film industry. Last, the conclusion
summarizes the key implications from the analyses.
The Television without Frontiers Directive of 1989
When launched in 1989, the ultimate objective of the TVWF
Directive was to create an integrated TV market across Eur-
ope and included the mandate to enable the ‘mutual recog-
nition’of broadcasting licenses among EU Member States.
2
In other words, a broadcaster would not require an addi-
tional license to broadcast in another Member State as they
would be operating under the national laws of their home
country which are subject to the minimum requirements set
out by the TVWF Directive. Later, these basic principles were
extended to video-on-demand (VoD) services in 2010.
The TVWF Directive was a huge success. Attracted by the
enlarged TV market in the EU, large amounts of investment
poured into the related industries from both Member States
and non-EU countries. Since the launch of the TVWF Direc-
tive, the number of TV channels operating in the EU grew
from around 550 in 1990 to roughly 1,200 in 1995 and even
7,000 in 2014 while the market has increased on average by
18.5 per cent annually (OlsbergSPI, 2016).
The TVWF Directive was also seen as an opportunity to
enlarge the market for the film industries. However, several
countries led by France were opposed to this approach
toward an open and integrated market which would entail
greater competition among an enlarged number of rivals.
France finally persuaded the other Member States that a
provision (Article 4) be included in the Directive to ensure
that channels in the EU are required to ‘reserve for Euro-
pean works a majority proportion of their transmission time,
excluding the time appointed to news, sports events,
games, advertising and telex services’–the so-called ‘TV
quotas’.Defining precisely the term ‘majority proportion’led
to more disputes among the Member States and even
within the countries themselves –including France. It was
finally agreed that the TV quotas grant 40 per cent of the
film transmission time to domestic works and 20 per cent to
the works from other EU countries, which leaves just 40 per
cent for works from the rest of the world (for further details,
see Grantham, 2003).
During these negotiations, many Member States, includ-
ing Germany and the United Kingdom, realized that their
domestic film industries would be unable to meet such a
demand for films on TV. Instead of seeking to artificially
boost the supply of films, they simply decided to ignore or
apply loosely the TV quotas. Eventually, these EU countries
negotiated an ‘escape’clause in Article 4 stating that the
quotas should only be applied ‘where practicable and by
appropriate means,’and that the proportion of which
should be achieved on the basis of ‘suitable criteria’.
At the time, the TV quotas seemed to be a diplomatic
success for the French film industry and were very much
celebrated. But thirty years on, the question needs to be
asked: how effective have they been? This paper shows that
they have actually led to three unexpected negative effects.
First, the French film companies who distribute and even
produce films from outside of either France or the EU began
to feel the strain as these quotas limited the additional
©2020 University of Durham and John Wiley & Sons, Ltd. Global Policy (2020) 11:Suppl.2
Jimmyn Parc and Patrick Messerlin
32
revenues that they would have expected from the unre-
stricted screening of their films.
Second, the TV channels themselves began to suffer as
the chronologie des m
edias have only served to accelerate
the shift among French audiences away from the nation’s
TV stations to other international outlets in order to watch
US films. This has been particularly noticeable with the
advent of the Internet and other digital platforms since the
late 1990s.
Third, French policy-makers hoped that by limiting the
access of US films to French TV, the nation’sfilms would fill
the gap left behind. However, the TV quotas have created
an ‘artificial’shortage of French films on TV screens as the
domestic film industry has been unable to produce a suffi-
cient amount of attractive films. Thus, only a handful of
attractive French films have been aired repeatedly over
years to the extent that French audiences are losing interest
in domestic films.
TV quotas: a pyrrhic victory
While the French film industry was pursuing the path of
‘protectionism,’the Korean film industry was embarking
upon liberalization. The Korea-US Film Agreements in 1985
and 1988 opened up the Korean film market to Hollywood
by abolishing import quotas and permitted Hollywood stu-
dios to distribute their films directly to Korean movie the-
aters.
3.
Given that the Korean film market was only 20 per
cent of its French counterpart in 1989, it is interesting to
compare the different paths undertaken by these two film
industries up to 2005, the year before the screen quota cut
came into force in Korea and created new dynamics. In this
analysis, the two film industries are compared by consider-
ing the number of domestic films released and then the
average revenues generated per film. The number of films
released and produced is a barometer that is often used to
measure the dynamism of the industry while the average
revenues per film signify the attractiveness of films among
audiences.
Figure 1 compares the number of films released by France
and Korea since 1976 in order to trace their evolution. The
two industries have faced the same slow but despairing
decline in this number up to the late 1980s. Interestingly, the
TVWF Directive of 1989 and the Film Agreements of 1985 and
1988 brought diametrically opposite paths for each side. The
artificial shortage created by the TV quotas was perceived by
the French film industry as an opportunity to increase the
number of films produced and released. Thus, there is an
immediate and unflagging increase in the number of French
films after 1989. By contrast, the Korean film market experi-
enced stagnancy after the short-lived surge during the years
1985–1990. It is important to emphasize here that the number
of films produced in Korea began to increase after 1999 and
that today Korea produces and releases more films than
France (UNESCO Institute for Statistics, 2020).
When it comes to average revenues per film, the compar-
ative outcome of French and Korean films is noteworthy as
shown in Figure 2. After 1991, the average revenues per
French film has stagnated at a historically low level. For
Korea, the average revenues for domestic films has grown
since the early 1990s at a rate which has become higher
than in France. The average revenues per film in Korea was
one-fourth of the figure in France for 1985, roughly half in
1995, but 1.4 times higher in 2000, and 3.4 times higher in
2005. In other words, facing mostly the same competitors –
Hollywood blockbusters –the Korean film industry has been
able to produce more attractive films than its French coun-
terpart.
For those who believe that the TV quotas have put the
French film industry in a favorable situation, it is rather sur-
prising to see such a reversed outcome; particularly given
the fact that Korea opened up its market to Hollywood as
France was closing its doors. In examining the Korean film
industry during this period, Parc (2017, 2019) argues that it
Figure 1. Number of films: France and Korea, 1975–2005
0
50
100
150
200
250
Number of French films Number of Korean films
Sources: Centre national du cin
ema et de l’image anim
ee (CNC, various issues), Korean Film Council (KOFIC, various issues).
Global Policy (2020) 11:Suppl.2 ©2020 University of Durham and John Wiley & Sons, Ltd.
The TVWF Directive and Its Quotas on the French Film and TV Markets 33
has experienced significant changes in its industrial structure
to produce attractive films that were able to be in competi-
tion with Hollywood films in the domestic market. To this
end, the large Korean conglomerates or chaebols have been
heavily involved in this process for their own interests. This
then raises the question, what happened to the French film
industry under these TV quotas? The next section addresses
this issue.
Regulatory costs: TV quotas
The introduction of TV quotas has had an unexpected out-
come: it has deepened the conflict between the French film
companies and the TV networks which has been ongoing
since the late 1970s. With French audiences preferring to
watch films at home instead of visiting movie theaters, there
was a massive decline in admissions. In fact, this trend was
not French-specific but can be found across the world,
including in Korea.
Under these circumstances, the TV quotas for films
brought about two largely unanticipated difficulties. First, as
mentioned before, French film production companies had to
produce more films than before in order to meet the new
demand. In fact, when the TVWF Directive was being dis-
cussed, a few figures from the TV industry were initially
opposed to the proposed quotas (Grantham, 2003); how-
ever, their views have been largely ignored by French pol-
icy-makers, thus the film industry embarked upon their
Grandes Manœuvres. In such a declining film market, produc-
ing more films only served to disperse investments in film
production far too much which led to a deterioration in the
quality of its films. Second, the French TV stations could not
exhibit all the non-EU films that had already been imported
for movie theaters. Given that the average share of the US
films alone shown by French movie theaters is 57.6 per cent,
it can be judged that a large number of foreign films were
already imported to France. It can also be easily assumed
that there were a large number of viewers who were wait-
ing for these US films to be shown on TV. However, the
quota of 40 per cent hindered the full utilization of these
films that had already been screened at movie theaters from
being broadcasted on TV.
Under strong pressure from the Bureau de liaison des
industries cin
ematographiques –the lobby group coordinat-
ing all the trade unions within the French film industry –
the nation’s policy-makers believed that they could only
solve this dilemma by frequently refining and tightening the
chronologie des medias. Introduced in 1982, this regulation
was an attempt to ‘balance’the relations between movie
theaters and TV stations by requiring a mandatory time
sequence for the release of new films through different out-
lets or ‘windows’–such as movie theaters, videos, DVDs,
and TV. It stipulated that films must be first released at
movie theaters for a few months before being progressively
released across other outlets according to the strict timeta-
ble produced.
4
With an increasing number of VoD services in the 2000s,
French policy-makers have sought to create new release
schedules in an attempt to ‘re-balance’the relations
between TV channels and VoD service providers. The timeta-
ble used between 2009 and 2018 listed eight different win-
dows while the version used today has ten. Some windows
are defined in coded terms: for instance, the sixth window
consists of ‘free-to-air TV who have invested at least 3.2 per
cent of their turnover for the funding of European works’
(Journal Officiel de la R
epublique Francßaise, 2019). As a
result, today, it takes 36 months for a film to be released via
subscribed VoD service providers (Amazon Prime, Disney+,
and Netflix) and 44 months for free VoD service providers,
which are the two most popular outlets today.
The chronologie des m
edias particularly hurts the produc-
ers of under-performing films who once at the box office
Figure 2. Average revenues per film: France and Korea, 1975–2005
0
2
4
6
8
Million constant 2018 US dollar
Average revenue per French film Average revenue per Korean film
Sources: CNC (various issues), KOFIC (various issues).
©2020 University of Durham and John Wiley & Sons, Ltd. Global Policy (2020) 11:Suppl.2
Jimmyn Parc and Patrick Messerlin
34
are stuck for four months without any chance to access
other outlets to recoup their losses. With such negative
effects from these regulations, this outcome raises the ques-
tion, how is the French film industry able to produce a large
number of films despite such low revenues? Messerlin and
Parc (2017), Messerlin and Vanderschelden (2018), and Parc
and Messerlin (2018) all argue that the answer is subsidies.
The next section addresses this issue.
Financial costs: subsidies
Increasing the number of French films produced despite
declining revenues per film has been possible with the help
of massive subsidies. Initially, there was little interest in TV
quotas among French TV stations as their core business is
not about making films (Grantham, 2003). Despite this, the
French government and the TV industry managed to strike
a deal: TV stations agreed to support the filmmaking busi-
ness by pre-purchasing films or coproducing films; in
exchange, they became eligible for massive government
subsidies. Between 1989 and 2005, subsidies to the French
filmmaking sector increased by 160 per cent. Furthermore,
the average share of film subsidies during the period of
1980–1989 in the box office revenues for French films
jumped from 35 per cent –hence before the adoption of
the TVWF Directive –to 69 per cent for the years 1989–
2005. At first glance, it is clear that the provision of massive
subsidies has been effective in boosting the French film
industry. However, such an evolution requires further scru-
tiny.
The most accurate measure of an industry’s performance
is its ‘value added’. This is defined as the value of the prod-
ucts or services sold in the market by an industry minus the
inputs that are needed in order to produce its goods or ser-
vices. For instance, the value of filmmaking includes inputs
such as travel expenses for shooting films at various loca-
tions, the rental of equipment, and other costs. The value
added of the film industry excludes these inputs of goods
and services because they have been produced by other
sectors, such as airlines and hotel services, not by the film
industry per se.
In 2013, Inspection g
en
erale des finances (Inspectorate
General of Finances, IGF) –one of the key auditing bodies
for the French government –released a joint report with
Inspection g
en
erale des affaires culturelles (Inspectorate Gen-
eral of Cultural Affairs, IGAC). This report has provided the
most detailed account on subsidies in the French film and
TV industries for the year 2012, which unfortunately has not
been updated since. Institut national de la statistique et des
etudes
economiques (National Institute of Statistics and Eco-
nomic Studies, INSEE) has also published information regard-
ing the value added in the film and TV industries for the
same year. This paper analyzes the true contribution of sub-
sidies to the French film and TV industries by calculating
the share of subsidies in the value added of these two
industries. This share is labeled as ‘subsidy rate’: it is consid-
ered as one of the key indicators that demonstrates the abil-
ity of an industry to develop its own capacities. If the rate is
higher, it is indicative that the TV industry is less capable to
function properly without state support.
The subsidy rate in the French film industry
INSEE (2013) divides the value added of the French film
industry into four main segments: production, post-produc-
tion, distribution, and exhibition (see column (1) of Table 1).
As the data only reports the value added for France, it does
not distinguish between the contributions made by domes-
tic or foreign entities. In other words, INSEE overestimates
the size of what constitutes as the ‘true’French film indus-
try. Therefore, in order to eliminate the contribution of for-
eign entities, two key steps are used. First, according to
Centre national du cin
ema et de l’image anim
ee (CNC)
(2012) the share of foreign entities in the production and
post-production segments is around 24 per cent.
5
Therefore,
the ‘truly’French value added of these two segments should
be at the level of 0.76 (1–0.24) of their corresponding values
presented in column (1), as shown in lines A and B in col-
umn (2).
Second, regarding the distribution and exhibition seg-
ments, the admission share of French films in 2012 was
roughly 40 per cent (CNC, 2014). Therefore, the ‘truly’
French value added of these two segments is shown in
lines C and D of column (2) which is 0.4 times of the
value added shown for these lines in column (2). Com-
bined, these adjustments for the four segments suggest
that the more accurate estimate of the total value added
generated by ‘truly’French films is only €1.7 billion, not
Table 1. Value added and subsidy rate in the French film
industry, 2012 (mil. €)
Activities in the film
industry
a
Value
added
‘made in
France’
‘Truly’
French
value
added
Subsidies
(1) (2) (3)
A. Production of films 1,273 967
B. Post-production 499 380
C. Distribution of films 526 210
D. Exhibition of films 444 178
E. Total value added 2,742 1,735
F. Government-related
subsidies
476
G. Labor subsidies
(intermittents)
b
200
H. Total subsidies 676
I. Subsidy rate (in % of
value added)
24.7 39.0
Notes: a. The codes of the segments (French industrial nomencla-
ture NAF rev.2 2008 with 732 basic activities) are 5911C, 5912Z,
5913A and 5914Z for the lines A, B, C and D, respectively. These
codes ensure that the data are not overlapping; b. Subsidy compo-
nent of the specific unemployment regime of the intermittents du
spectacle.
Sources: INSEE (2013); IGF and IGAC (2013).
Global Policy (2020) 11:Suppl.2 ©2020 University of Durham and John Wiley & Sons, Ltd.
The TVWF Directive and Its Quotas on the French Film and TV Markets 35
€2.7 billion which is significantly below the amount that is
generally believed.
IGF and IGAC (2013) provide the most exhaustive informa-
tion on all the subsidies or equivalents such as fiscal rebates
of all kinds, granted by the French government to the entire
film industry. Its overall amount is €0.5 billion as shown in
line F in column (3). However, this information cannot be
split for each of the four film industry segments. Besides
these subsidies, one should not overlook intermittents du
spectacle or labor subsidies granted to part-time workers
under a special unemployment regime (line G in column
(3)). These labor subsidies amount to €0.4 billion for the film
and TV industries together (Gille, 2013); half of this amount
has been arbitrarily allocated to the film industry and the
other is for the TV industry. Therefore, the total amount of
subsidies granted to the French film industry reaches almost
€0.7 billion (line H in column (3)).
To sum up, the subsidy rate in the French film industry
ranges between 24.7 and 39.0 per cent (line I). This per cen-
tage is massive when compared with other French cultural
industries, such as museums (13 per cent), live perfor-
mances (9 per cent), visual arts (2 per cent), and books (0.8
per cent) (IGF-IGAC, 2013). In fact, the subsidy rate in the
French film industry is likely to be higher than 39 per cent
if one takes into consideration that around (or even more)
40 per cent of French films are coproduced (UNESCO Insti-
tute for Statistics, 2020). This would suggest that there must
be a larger per centage of foreign investment; hence, it
may actually be higher than the estimate presented in this
paper.
The subsidy rate in the French TV industry
By using the data from the same sources, this section delves
into the contribution of subsidies to the value added of the
French TV industry related to activities in production, distri-
bution, and exhibition of films. The method used in the
previous section is used again; (1) calculate the value
added generated by the ‘truly’French TV industry; and (2)
calculate the contribution of subsidies in the value added to
the TV industry –the subsidy rate. The higher the rate, the
more the TV industry is unable to function without state
support.
INSEE (2013) divides the value added of the French TV
industry into three main segments (see Table 2); (1) the pro-
duction of films (for movie theaters and TV) and programs
(for TV only); (2) the distribution activities of the general TV
channels that broadcast films and TV series as well as news,
sports, entertainment, and children’s programs; and (3) the
distribution activities of the thematic TV channels that spe-
cialize in broadcasting either news, sport events, talk shows,
or other specific programs (see column (1)). For each of
these three segments, it is necessary to estimate the size of
the ‘truly’French TV industry by excluding the contribution
of foreign entities related to filmmaking.
It is important to note that assessing the value added and
subsidies in the TV industry is more complex than for the
film industry because of the presence of state-owned French
TV channels. Since 2009, French law stipulated that revenues
generated from the broadcasting of commercial advertise-
ments are restricted for state-owned TV channels. To make
up for these losses, they instead receive a lump-sum of
funds from the government. As these funds cannot be split
between the different types of TV activities, such as film-
making, news, sports, shows, and other programs, this paper
adopts two alternative approaches for this analysis. The first
one relies on all the TV activities without distinction of the
specific funds that support filmmaking; hence it is based on
the largest estimates of value added and subsidies. The sec-
ond approach is focused only on the filmmaking activities
Table 2. Value added and subsidy rate in the French TV industry, 2012 (mil. €)
Activities in the TV industry
a
Value added ‘made in
France’
‘Truly’
French
value
added
TV ‘aided’value
added’
Subsidies
Entire TV
industry
TV ‘aided’value
added
(1) (2) (3) (4) (5)
A. Production of films/programs
for TV
2,460 2,288
B. Distribution: general TV
channels
3,214 2,604
C. Distribution: thematic TV
channels
410 410
D. Total value added 6,085 5,224 1,144
E. Government-related subsidies
b
5,006 613
F. Labor subsidies (intermittents)
c
200 200
G. Total subsidies 5,206 813
H. Subsidy rate (% of total value
added)
85.6 99.7 71.1
Notes: The codes of these French activities (in nomenclature NAF rev.2 2008 with 732 basic activities) are 5911A, 6020A and 6020B, respec-
tively; these codes ensure that the data used are not overlapping; The dotations en fonds propres for state-owned TV channels are included in
column 4; Subsidy component of the specific unemployment regime of the intermittents du spectacle.
Sources: INSEE (2013); IGF and IGAC (2013).
©2020 University of Durham and John Wiley & Sons, Ltd. Global Policy (2020) 11:Suppl.2
Jimmyn Parc and Patrick Messerlin
36
of the TV sector, with the corresponding value added and
subsidies.
The first alternative approach leads to the following
results. The share of French investments in the production
of films and other programs is 93 per cent (CNC, 2012).
Based upon this figure, the truly French value added in this
segment should be adjusted at the 93 per cent level; thus,
€2.3 billion as presented in line A in column [2]. Regarding
film distribution through the general TV channels, adjust-
ments are based on the viewing time of the French audi-
ence: 31 per cent for watching films of all nationalities and
69 per cent for other TV programs (CNC, 2012). As roughly
40 per cent of the films are qualified as French, the viewing
time devoted specifically to French films is 12 per cent
(0.31 90.40). In terms of the other TV programs such as
news, sports, and entertainment of general TV channels,
they have been assumed to be entirely truly French in
Table 2. Based upon this, the final result is shown in line B
in column (2). With the distribution through thematic TV
channels, as there is no detailed information, this paper
(conservatively) assumes that all these activities are truly
French as shown in line C in column (2). Combined, these
adjustments suggest that the value added of the truly
French TV industry is only €5.3 billion, instead of €6.1 billion,
as shown in line D in column (2).
Turning to subsidies, this first approach includes the dota-
tions en fonds propres or the lump-sum of ‘annual funds for
investment’granted by the government to the state-owned
TV channels; €5.0 billion as shown in line E in column (4).
This is in addition to the rest of the labor subsidies which is
€0.2 billion (see line F in columns (4)). Therefore, the total
subsidies granted to the French TV industry is around €5.2
billion which equates to the subsidy rate ranging from 85.6
to 99.7 per cent of the value added as shown in line H.
The second alternative approach is to put aside the com-
plications due to state-ownership and rely instead on the
estimate of ‘aided’production of TV ‘fiction works’such as
films or the equivalents which are calculated every year on
the basis of the hours broadcasted that CNC supports. In
2012, this ‘aided’production accounted for about €1.3 bil-
lion (CNC, 2012). One can derive the ‘aided’value added
from the ‘aided’production as INSEE (2013) reports that the
value added for this case is about 90 per cent. Therefore,
the ‘aided’value added of TV works is roughly €1.1 billion
(€1.3 billion 90.9) as shown in line D in column (3).
In order to estimate the subsidies granted to the ‘aided’
value added, the most conservative way (as above) is to
subtract the dotations en fonds propres and the fiscal tax
reliefs for low-income people and senior citizens; they are
around €3.9 billion and €0.5 billion respectively (IGF and
IGAC, 2013). Therefore, the subsidies allocated to the ‘aided
value added of TV works’is roughly €0.6 billion (=€5 billion
–€3.9 billion –€0.5 billion) (line E in column (5)) to which
the labor subsidies (€0.2 billion) must be added. As a result,
the subsidies provided to the ‘aided’value added is €0.8 bil-
lion in total. The resulting alternative subsidy rate based on
this ‘aided production of TV works’approach is about 71.1
per cent (line H in column (3)).
Where’s Wally? Finding the key factor
As analyzed before, the TV quota provision of the TVWF
Directive has in fact put the French film industry in a bad
position. Furthermore, government subsidies –the remedy
used to overcome this situation –have not been effective
enough to address these difficulties. What therefore can be
done to turn this situation around? It may seem like looking
for ‘Wally’; however, the core factor that can help improve
Figure 3. Relative attractiveness of films: Korea vs. France (1975–2005)
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
France Korea
Sources: CNC (various issues), KOFIC (various issues).
Note: Standard deviations for number of admissions during the period of 1989-2005 are as follows: French films in France-12.45, foreign films in
France-17.28, Korean films in Korea-25.56, and foreign films in Korea-8.33.
Global Policy (2020) 11:Suppl.2 ©2020 University of Durham and John Wiley & Sons, Ltd.
The TVWF Directive and Its Quotas on the French Film and TV Markets 37
the French film industry can be easily found when compar-
ing the attractiveness of French and Korean films.
Figure 3 presents the indexes for the relative attractive-
ness of films from France and Korea. It is defined by the
number of admissions for domestic films with respect to the
number of admissions for foreign films. The stitched line in
Figure 3 represents the attractiveness index of French films
whereas the solid line is the same for those from Korea. If
the value of the index is below 1.0, it means that the general
audience finds foreign films more attractive than domestic
ones. If the value is over 1.0, however, then the opposite is
true, the general audience finds local films more attractive.
Despite the fact that the share of US titles among foreign
films in Korea is higher than it is in France, the implications
that we can draw from Figure 3 remain the same.
Since 1983, the attractiveness index for France has
remained below 1.0, which means that France has, in general,
never been able to produce attractive films that could draw in
a larger domestic audience. As this index is a relative one, it is
interesting to calculate the standard deviation –a measure of
the amount of variation or dispersion –of admissions for both
domestic and foreign films in France. During the period of
1989–2005, the standard deviation of admissions for French
films (12.4) was not much different from that of foreign films
(17.2). Given that French films are less attractive than foreign
films as shown in Figure 3, the close standard deviations of
the two groups of films signify that there has been no signifi-
cant change in terms of their relative attractiveness among
these two groups. In other words, the combination of TV quo-
tas and film subsidies has not been effective enough to
enhance the attractiveness of French films.
During the same period, the attractiveness index for Kor-
ean films has also remained below 1.0 for the period up to
2001, but this index has increased significantly thereafter.
This shows that Korea has been able to produce more
attractive films that can attract a larger share of the domes-
tic audience. This improvement becomes even more evident
when comparing the two standard deviations for admis-
sions; 25.56 for Korean films compared to 8.33 for foreign
films. The relatively low standard deviation for foreign films
mirrors the fact that the choice to exhibit attractive foreign
films has been well maintained. By contrast, the high stan-
dard deviation for Korean films illustrates the significant
improvement of their attractiveness during the period 1989–
2005. In other words, the increase in attractiveness of Kor-
ean films can be considered as encouraging, especially tak-
ing into account the fact that the subsidy level is
significantly lower when compared with France (Messerlin
and Parc, 2017; Parc and Messerlin, 2018).
Parc (2017, 2019) argues that instead of pursuing protec-
tionist measures, the Korean government opened up its
market during the period of 1985–1988. As a result, the Kor-
ean film industry underwent a process of restructuring by
embracing the US filmmaking system of business verticaliza-
tion which was helped by the participation of chaebols,an
influx of private investment, and market-based competition.
All of which is very different from the French Grandes Man-
œuvres which have failed to achieve their objectives.
Conclusion
The EU Member States integrated their TV markets together
in order to create a larger and more open ‘single TV market’
through the TVWF Directive of 1989. The French film indus-
try used this opportunity to extract additional revenues by
implementing TV quotas and strengthening the chronologie
des m
edias. This paper examines the impact of these two
measures on the French film and TV industries and shows
how they were largely ineffective.
This paper provides three main results. First, the TV quo-
tas limited the presence of Hollywood films on TV screens
while expanding the access for domestic ones. However,
contrary to such expectations, these quotas have induced
the already weak French film companies to produce a vast
number of less attractive films in order to meet the
demands of the TV market. For the TV industry, the quotas
have increased its financial burden as it has been unable to
optimize the utilization of US films that have already been
imported into France for the theaters.
Second, in order to ease this burden, the French govern-
ment has constantly expanded and diversified the chronolo-
gie des m
edias. As a result, this policy instrument has only
made it more difficult for the French film companies with
under-performing productions at the box office to recoup
their losses. Furthermore, the chronologie des m
edias has slo-
wed down or even hindered the responsiveness of the
French film industry to new technologies and global trends
in the media industry.
Third, the French government has poured massive subsi-
dies into its film and TV industries. More importantly, the
subsidy rates in the film and TV industries are at least four
to seven times higher, respectively, than in any other French
cultural industry. The overall costs of this situation on the
whole French economy are huge: more than one-third of
the value added for French films comes from public trans-
fers, whereas the market-based production process con-
tributes to less than two-thirds of this value added. These
proportions are even worse for the TV industry.
The main lesson from this paper is that protectionist mea-
sures bring about a number of unexpected negative effects
that harm not only the industry in question, but also other
related industries. Notably, the reaction of the French gov-
ernment and industry is limited and not responsive enough
to new challenges brought on by any technological
advancement such as digitization and globalization, or even
unexpected situations like COVID-19.
6
This was clearly
shown with the case of Okja (2017) which created contro-
versy at the Cannes Film Festival in 2017 regarding the for-
mat of its premier release through Netflix.
7
Therefore,
instead of intervention, the French government should focus
more on fostering a business-friendly environment.
In this regard, the experience of the Korean film industry
is meaningful. As the Korean government opened up its film
market to the world, the country’s companies have invested
and developed the film industry for their own interest and
profits. This has eventually worked out well and now con-
tributes to form a positive brand name for Korea. Parasite,
©2020 University of Durham and John Wiley & Sons, Ltd. Global Policy (2020) 11:Suppl.2
Jimmyn Parc and Patrick Messerlin
38
the Korean film that won the Palme d’Or at the 2019 Cannes
Film Festival and four awards (Best Picture, Best Director,
Best Original Screenplay, and Best International Feature
Film) at the 92nd Academy Awards, clearly illustrates the
importance of business in the film industry.
If the French film industry truly wishes to enhance its
competitiveness, it needs to broaden its view and look at
other parts of the world where competitive film industries
have emerged and enjoyed more success. It is clear what
the future direction of Grandes Manœuvers should be, pro-
gressive liberalization and globalization.
Funding
This work was supported by the Laboratory Program for
Korean Studies through the Ministry of Education of the
Republic of Korea and the Korean Studies Promotion Service
of the Academy of Korean Studies (AKS-2015-LAB-2250003).
Notes
1. For example, French TV is not permitted to show films on Wednes-
days in order to encourage young people to go to movie theaters.
2. An EU ‘Directive’lays down certain objectives that must be achieved
by each Member State; however, each Member State is free to
decide how to implement this directive into national law.
3. In Korea, screen quotas have existed since 1966 but only became
the key protectionist measure from 1986. Later, it was cut by half in
2006. Many believe that these quotas were beneficial as they pro-
tected the Korean film industry; however, Parc (2017, 2019) argues
that the screen quotas have not had any notable positive impact.
4. For further details, see CNC (2012).
5. The institution in charge of regulating the French film industry and
granting the vast majority of the subsidies.
6. Refer to Sweney (2020).
7. For further details, refer to Jamet (2017) and Guerrasio (2018).
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Author Information
Jimmyn Parc is a visiting lecturer at Sciences Po Paris, France and a
researcher at the Institute of Communication Research, Seoul National
University, Korea. His current research focuses on the film and music
industries which are faced with a changing business and trade environ-
ment as well as new challenges from digitization.
Patrick Messerlin is Professor Emeritus of economics at Sciences Po
Paris, and Chairman of the Steering Committee of the European Centre
for International Political Economy (ECIPE) in Brussels. His current
research deals with economic and trade relations between Europe and
East Asia, with a particular focus on cultural industries.
Global Policy (2020) 11:Suppl.2 ©2020 University of Durham and John Wiley & Sons, Ltd.
The TVWF Directive and Its Quotas on the French Film and TV Markets 39