Special Edition #15 - Film financing 🎥
Henri de Roquemaurel, Head of the Image & Media Division at BNP Paribas
This week was the Cannes Film Festival, as I am sure you know. In a nod to this essential media event, what better than an episode that covers the subject of film financing?
To be honest with you, finding a theme and guest for this episode was not easy. But, when I finally found THE right person, I was welcomed with open arms.
Planning an episode with BNP Paribas was a piece of cake! A huge thank you to its highly motivated communications team.
My guest, Henri de Roquemaurel, has been doing this job for many years and explains everything in detail: the process, the role of the producer, the influence of the distributor, intellectual property, and the nature of financing.
We dissect the financing of two films – Eiffel and The Three Musketeers – to understand how the teams work and co-construct these films. We look back at the film industry in the midst of COVID and the role BNP Paribas has played in helping to keep some productions afloat. You will learn that BNP also has a production company that allows it to finance certain films from its own funds. Henri shares funny anecdotes about some films, revealing the bank’s expertise in this particular field.
The basics
Sources of film financing
The financing of a film is based on a combination of contributors, such as the producer himself, distributors, television channels, state aid, regional aid, Sofica and banks. This diversity of funding sources makes it possible to raise the necessary funds for the realization of a film project.
When it comes to financing a particular film, the producer plays a central role in setting up the financing plan by seeking funds and support. The overall budget of a film is composed of various sources of funding:
First, the producer him/herself, who is usually one of the main financial contributors, usually contributing between a quarter and a third of the budget.
The distributors, who will be responsible for marketing the film in cinemas, also contribute to the financing by advancing part of the funds, which will be reimbursed to them later on in ticket sales.
TV channels, on the other hand, have a legal obligation to dedicate part of their turnover to film production.
State aid plays a major role in the financing of cinema. It is awarded by the CNC (Centre National du Cinéma et de l'Image Animée) and serves both cultural and economic objectives.
Regional aid is another important source of funding. Sofica (Companies for the Financing of the Film and Audiovisual Industry) collect funds from individuals and invest in projects.
Finally, and this is the subject of our conversation, banks play an essential role in granting loans to complete the financing of a film.
Innovative ways to finance
In the film industry, new types of financing have emerged in recent years, offering alternatives to the traditional methods mentioned above, including:
Crowdfunding: Crowdfunding platforms allow film directors and producers to present their project to the general public and solicit financial contributions from people interested in the film. This can take the form of donations, ticket pre-sales, derivatives, or profit sharing. Take a look at the platforms of the Bpi and that of BNP Paribas.
Investments via streaming platforms: With the rise of streaming services, some platforms are now investing directly in the production of original content. This offers directors and producers a new source of funding, while ensuring distribution on the platform itself. The SMAD decree in France (known as “on-demand audiovisual media services”) came into effect in 2021 and sets out the obligations of foreign video-on-demand platforms to financially support French and European cinema. I’m thinking of Netflix’s investment in the latest episode of the Asterix saga (more here).
The use of NFTs: Filmmakers can issue NFTs representing ownership or distribution rights in a film, thus offering investors the opportunity to participate financially and share potential profits.
Film funds: In France and the rest of Europe, there are different types of film funds or programs that play a key role in financing and supporting film production. Without going into too much detail, you will find, for example, the public support funds (FSIC, FSAIC, etc.). There are also specialized investment funds, but these are not yet widespread.
BNP Paribas
Image & Media Division
This financial group needs no introduction. But you will learn that, for more than 20 years, the bank has been supporting the financing of films through this Division, made up of experts dedicated to cinema & film activities, and audiovisual.
The group also holds a stake in Cofiloisirs, a financing institution specializing in cinema and audiovisual.
On average, BNP Paribas works on 1,000 cinema and TV projects per year and participates in the financing of more than 100 films of French origin, i.e. half of France’s annual production.
💡Shares
📗 What Henri recommends:
Arènes sanglantes [Bloody arenas] by Vicente Blasco Ibáñez
🧐 If you want to dive deeper:
List of the biggest box-office hits worldwide 👉 Read
Box office: How do you know when a film is (really) profitable? (in 🇫🇷) 👉 Read
😁 As for me, I recommend:
Global Fintech 2023: Reimagining the Future of Finance (BCG) 👉 Read
Fintech and SME Finance: Expanding Responsible Access 👉 Read
🎧 The episode (in 🇫🇷)
Podcastics / Spotify / Google podcast / Deezer
👋 Contacts
BNP Paribas (Media)
Source: BNP Paribas.