France’s Flagship: Production/distribution giant STUDIOCANAL earns a CineEurope salute
France’s STUDIOCANAL, one of the international film and TV industry’s most active global players, steps into the spotlight again when Rodolphe Buet, the company’s president of distribution and marketing, receives the “International Distributor of the Year” Award at CineEurope in Barcelona on June 23.
The company, traditionally anchored in theatrical features grown from TV roots, is the respected European leader in production, co-productions, distribution, rights acquisition, and international sales of feature films and TV series. Additionally, it owns and runs one of the biggest libraries of cinema classics, counting over 5,000 French, British, Italian, German and American program titles. How appropriate that STUDIOCANAL is based in France, arguably the world’s first filmmaking and most passionate film-loving country.
STUDIOCANAL is also blessed with impeccable pedigree in a very established entertainment family: Its parent company is the CANAL+ Group, the leading provider of premium channels and themed content in France. The Group is (attention, please) fully owned by Vivendi, a publicly traded global media and content production and distribution giant, not to be confused with longtime “Canal+" French TV entity, which is a pay-TV channel—one of several channels that belong to the CANAL+ Group—and a sister company of STUDIOCANAL.
In keeping with such prestige lineage, STUDIOCANAL maintains firm allegiance to overall quality—in its businesses across media and platforms, its relationships and management. The focus on quality and trends has fueled the company’s remarkable growth since its beginnings in the 1980s, but such preeminence can also be credited to the increasing global need for content that technology, new viewing options and audience hunger are fomenting.
From the start, the ballast for STUDIOCANAL has been the feature films it handles. Today, these might be product it fully finances, co-produces, markets and distributes (also via its strong international sales department) or acquires. It has recently been releasing to theatres an average of 50 features yearly—these in its three major European markets of France, the U.K. and Germany, where it operates directly, and in Australia and New Zealand, where it is also very active. These territories represent a market of about 240 million people, says chairman and CEO Didier Lupfer.
For its own productions, the studio oversees every aspect of the film’s cycle, from development and shooting through to marketing, screening, media campaigns and relations with exhibitors.
In particular, STUDIOCANAL has been building close relationships with exhibition, working with theatres to plan film releases and meeting with delegates at industry trade shows and conventions like CineEurope. STUDIOCANAL’s theatrical distribution teams in France follow the film’s life from in-the-can to on-the-screen.
Amidst all the tech- and trend-driven changes in the business, Buet explains the evolutionary arc STUDIOCANAL has traveled: “Our [film] industry was built on a distribution model relying on successive, exclusive windowing of rights to maximize revenue generation by media and guarantee the financing of our productions. Digital platforms are now making this system more difficult by challenging traditional windows and undermining traditional models. We have to find ways to maintain the attractiveness of films to all traditional partners and manage positively the transition into digital. This evolution alone is enough to cause us to rethink our financing and distribution models. To that you need to add the advent of a new golden age of TV series which is challenging the film industry on two sides of the value chain: competition for access to the best talent on one side, and for audience time on the other.”
Regarding which of the three major markets generates the most revenue, Romain Bessi, chief operating officer and chief financial officer, answers that “[they are] roughly the same size, so it depends on how strong is the content for the relevant country in a given year. For instance, last year with [STUDIOCANAL fully financed productions] Paddington, Shaun the Sheep and Legend, the U.K. was our biggest territory.”
With regard to revenue generation from its varying businesses, Bessi says, “Current feature films represent the biggest part, followed by revenues generated by our catalog and those generated by TV series.”
Its library business covers restoration of titles (whether digitization, 4K upgrading, etc.) for reissues in theatres and across media and is also active in what it calls “heritage policy,” which relates to the country’s well-known protective stance towards its culture.
Thriving in the content-hungry world, STUDIOCANAL has established offices beyond its headquarters in Paris to Berlin and Munich in Germany; Sydney, Australia; Auckland, New Zealand, and most recently in Los Angeles and Beijing, where it is actively looking for new opportunities and relationships (see below).
Asked how STUDIOCANAL might be analogous to an American counterpart, if indeed there is one, Lupfer offers that at the European level, differences in scale understood, “we mirror how the American majors function with our activities in production, acquisition, distribution and international sales for both films and TV series and reaching all outlets, whether theatrical, TV, home entertainment and the DVD, VOD, electronic sell-through platforms. But where we differ from the Americans, beyond size, is in how we produce. Directors and other talent that work with us know that at STUDIOCANAL they will have great creative control.”
STUDIOCANAL’s roots in Paris were sewn in 1986 when Canal + created Canal + Production. In 1988, this new production entity became Le Studio Canal + and partnered in 1990 with Carolco (Basic Instinct, The Terminator, etc.).
In 1992, with uncanny prescience, Le Studio Canal + created and began building its library. In 1999, the company entered into long-term, ongoing relationships with Universal Pictures and Working Title and by 2001 the company settled into its STUDIOCANAL name.
Soon after, the studio's films were winning important awards (Oscars, Palmes d’Or and the like). By the end of 2005, STUDIOCANAL became the first studio to make its catalogue widely available to VOD and EST (electronic sell-through) sites and operators as it also began expanding its growth strategy by acquiring companies in other territories, notably the U.K., and achieving French box-office success with its co-productions.
With its 2008 acquisition of Germany’s Kinowelt, STUDIOCANAL became the European leader in film distribution while increasing its co-production activity. At this time, the company was polishing its many valuable library titles (The Graduate, Breathless, Le Cercle Rouge, to name but a very, very few) by restoring and repurposing them for the Blu-ray format.
As TV was heating up, STUDIOCANAL was signing significant TV output deals with neighboring territories and co-produced the 2010 Angelina Jolie/Johnny Depp starrer The Tourist, which became a global box-office hit.
2012 was an important year for both STUDIOCANAL and cinephiles, as it signaled the ongoing flow of STUDIOCANAL-owned library classics into theatres, with titles like Grand Illusion, among many, becoming available on the big screen via a deal with New York-based Rialto Pictures.
And STUDIOCANAL expanded its collaboration with Lionsgate, securing involvement with the the action (and money)-packed Hunger Games franchise. That year also brought the studio and Harry Potter producer David Heyman together in a deal that led to the subsequent worldwide success of Paddington and the much-anticipated sequel soon going into production.
STUDIOCANAL also ramped up activities in Australia and New Zealand, its two other important markets, via an agreement with Hoyts Group to acquire its distribution arm in the two territories. And with branding ever important, it soon renamed its Hoyt distribution Australasia subsidiaries STUDIOCANAL.
While the dedicated library work continues as King Content reigns in the prospering digital realm, the studio’s energy and manpower are full-throttle in productions, co-productions, distribution and international sales.
Significantly in the theatrical sector, STUDIOCANAL now fully finances many of its features and plans about eight to ten of these a year. So far, the roster has included the worldwide hits Paddington, Shaun the Sheep, and Non-Stop. A little over a year ago, Paddington became STUDIOCANAL’s greatest success when it achieved over $236 million at the worldwide box office.
Other notable titles are the Gary Oldman-starrer Tinker Tailor Soldier Spy, the Coen Brothers’ Inside Llewyn Davis, the Michael Fassbender/Marion Cotillard-starrer Macbeth, the Tom Hardy double-whammy Legend, and the star-studded current art-house entry A Bigger Splash. Roadside Attractions will bring to the States this July the Ewan McGregor/Stellan Skarsgård contemporary spy drama Our Kind of Traitor, in which an unsuspecting Brit lands in the middle of a deadly Russian Mafia/MI6 face-off in a variety of eye-candy international locations.
STUDIOCANAL is currently working on such films as The Commuter, featuring Liam Neeson, and Aardman Studios’ Early Man, a stop-frame animation feature by four-time Oscar-winner Nick Park.
About its ability to fully fund, Ronald Halpern, STUDIOCANAL executive VP, international production and acquisitions, notes that “we can cash-flow our own films, as Vivendi [which owns CANAL + Holding] can come up with the financing.”
Also helping on the production side is the important slate transaction deal, ongoing today, that STUDIOCANAL did a few years ago with Luxembourg-based fund Anton Capital Entertainment, which at the time was a first for a European studio. Anton, for instance, was involved in financing Our Kind of Traitor.
In addition to their kind of Traitor, STUDIOCANAL co-finances and co-produces an additional hefty handful of features, often local productions, with its companies in the three European territories where it directly operates. An example of a recent local success is its German co-production of Heidi, a box-office hit which registered strong across its three major territories of Germany, the U.K. and France. Early this year in France, it achieved that country’s biggest opening ever for a German-language film. Only a few weeks ago, the film also picked up Germany’s prestigious Golden Lola Award for Best Children’s Film at the 2016 German Film Awards.
Also on the production end, STUDIOCANAL occasionally inputs on artistic aspects but always in close collaborations with parties on the project’s creative and logistic ends. In the early stages, STUDIOCANAL may also advise on technical matters relating to budgeting and a search for partners. Even prior to a co-production agreement, the company might get involved by financing preliminary writing and feasibility research. In these cases and when the project is complete, it has the option to become a co-producer.
Other important STUDIOCANAL collaborations, mostly on the acquisitions side, have included the multi-Oscar-nominated hit The Imitation Game, the star-laden Silver Linings Playbook (titled Happiness Therapy in France and in English), the Ryan Gosling/Bradley Cooper-starrer The Place Beyond the Pines, and the recent French two-hander Mon Roi, directed by Maïwenn. Further conveying its wide genre choices in distribution deals were such films as Ron Howard’s Rush and Oscar-winner Searching for Sugar Man.
Looking ahead, STUDIOCANAL just entered co-production on Petit Vampire, directed by Joann Sfar (the wonderful biopic Gainsbourg: A Heroic Life). The studio will handle international sales and all distribution rights on this animated adaptation of the best-selling comic-book series.
Great relationships are an expected component of the company’s strategy. Among those people and entities with whom STUDIOCANAL maintains noteworthy ties are, among others, Harry Potter and Paddington producer David Heyman, Neal Moritz, Graham King, Eric Newman, Aardman and Working Title. Only last month, in a move that will greatly enrich its library, the company forged a significant deal with renowned French filmmaker Claude Lelouch (the classicA Man and A Woman) for exclusive distribution, including TV rights.
As a distribution and international sales mainstay, the studio does a lot of business with U.S. companies both large (Universal/Focus Features, Fox/Fox Searchlight, Lionsgate/Roadside, Warner Bros., etc.) and smaller (IFC, Open Road, TWC, Cohen Media Group, etc.).
Asked about his relationship with STUDIOCANAL, Cohen Media Group founder, chairman and CEO Charles Cohen comments: “Studio Canal was the first foreign production company to do business with Cohen Media when we entered the U.S. distribution business in 2010. They placed a lot of faith in our new company by entrusting us with Rachid Bouchareb’s Outside the Law. We were able to open the film at Manhattan’s Paris Theatre…and the film went on to be nominated for Best Foreign Language Film at the Oscars. We subsequently licensed many other titles from STUDIOCANAL that went a long way to establish our business in America.”
Adds Cohen, whose company distributes and licenses quality European film product and who is currently completing a major renovation of Greenwich Village’s longtime art-house destination the Quad, “Our experiences with the executives at the company have always been the most professional and among the most rewarding we have experienced in film distribution and we greatly value the business we have transacted with [them].”
About its business with the States, Buet comments, “On the other side of the globe [from Europe], the robust U.S. market remains number one. As such, it is also one of our top priorities. Most of our catalog titles are currently distributed in the U.S. by Lionsgate, which is another aspect of our multi-faceted partnership with them.” In addition to the aforementioned Our Kind of Traitor and Commuter, STUDIOCANAL most recently secured U.S. distribution through Lionsgate for the upcoming animated 3D Robinson Crusoe.
In addition to being a major distributor outside France, STUDIOCANAL also distributes around 15 feature films every year in its home country. It continues active in home entertainment, with DVD still viable and SVOD on the upswing. Citing the former, Bessi, asked about the company’s financial challenges in this shifting marketplace, offers that STUDIOCANAL is “limiting its exposure to physical revenues like DVD.” As an example of switching gears at “home,” Buet praises Lionsgate for “having successfully navigated the changes in the home-video market and having been able to offset the decrease of physical video through prolific SVOD deals for our films.”
Long dominant in international sales, STUDIOCANAL’s sales department handles global sales for all rights to the new feature films it produces and each year takes international rights to anywhere from 15 to 20 films that, beyond its partner territories, it puts on the world market for sale to other regions.
The international sales department also handles marketing rights across all media formats (TV, video, digital) for items from the STUDIOCANAL catalog, both directly and through international distributors like Universal TV, the aforementioned Lionsgate, and Canada’s Mongrel.
Last year at the Cannes Film Festival, STUDIOCANAL sold 20 films from its 2015 lineup and made over 100 deals in 10 days. Again this year, as it has for so many years, it brought a lot to the beach. (Cannes could almost be considered the company’s sixth office, or at least an established “pop-up.”)
At Cannes’ 69th edition, the company had a main competition entry (Marion Cotillard-starrer From the Land of the Moon) and about half a dozen other films screened, including the Daniel Auteuil-starrer Kalinka and Down By Love, co-starring Adèle Exarchopoulos, a sensation in art-house hit Blue Is the Warmest Color).
The company also teased with about ten projects—in development or production—for sales or pre-sales to various territories. These included Cédric Klapisch’s Back to Burgundy, The Commuter (which Lionsgate had already picked up for the U.S.), the upcoming James Marsh project (a fact-based maritime adventure with Colin Firth and Rachel Weisz), the dramedy My Blind Date (hitting German screens in November), Ron Howard’s Beatles documentary, Bridget Jones's Baby (reuniting Renée Zellweger and Colin Firth), Bastille Day (starring Idris Elba and Richard Madden), Nick Park’s Early Man and, in a partnership with James Cameron, the 3D revival of Cameron’s Terminator 2: Judgment Day.
STUDIOCANAL also seized the Cannes opportunity to announce that Paddington 2, the sequel to the huge worldwide hit (TWC struck gold with the original in the States), will go into production in October in the U.K., again with David Heyman producing and Paul King directing. STUDIOCANAL fully financed the film and will distribute it directly in its territories and market internationally.
Networking, showcasing, buying, selling and promoting aside, Cannes is also for STUDIOCANAL fertile turf for unearthing new talent. “Cannes is the first place where we’ll discover and meet new directors,” says production and acquisitions head Halpern. Asked where he’d like to do more collaborations, he hints that “we haven’t done any Australian films yet. And in Scandinavia there are more interesting directors we’d like to work with. [At Cannes,] we look mostly at filmmaker-driven projects.”
Beyond STUDIOCANAL’s hegemony in theatrical, the sharp-eyed company has also seen the “blur” that better TV programming has brought to the worldwide entertainment ecosystem, most notably in the area of TV series, whether from seasoned players or new kids on platforms like Netflix or Amazon. Buet freeze-frames several key aspects of these new invaders in the evolving picture business: “These industry giants shaking up the market have different goals: Netflix needs to establish a worldwide subscriber base, and Amazon has entered the media space to support its core delivery business.”
But Amazon is also encroaching on the upmarket films critical to art houses and putting pressure on their traditional suppliers. Observes Buet, “With top talent attached, these movies are also finding a home on SVOD platforms, as players [like Amazon] structure part of their offer on more sophisticated proposals. [As examples,] Amazon grabbed Manchester by the Sea at Sundance and now in Cannes Lynne Ramsay’s You Were Never Here.”
With so many changes to the business and the appeal of safeguards, STUDIOCANAL’s further steps into TV were inevitable. The company’s involvement, through Red Production Co. several years ago in “Last Tango in Halifax” was an early indication of its deepening interest in quality TV series creeping exponentially onto small screens worldwide.
The company has gotten more involved in fiction TV as both producer and distributor of TV series, what Buet refers to as “another growing content type.” In this arena, STUDIOCANAL, creating new labels beginning several years ago, partnered in major arrangements with companies like the U.K.’s Red, Germany’s Tandem, Scandinavia’s SAM and Spain’s Bambu to fortify these TV efforts.
Only a few months ago, STUDIOCANAL and Red joined with best-selling author Harlan Coben in his new production company. (Coben is dear to the French, thanks to actor/filmmaker Guillaume Canet’s adaptation of his novel Tell No One becoming so big a success; Music Box Films released the art-house hit in the States). Another recent TV move was the STUDIOCANAL appointment of Tandem’s Rola Bauer as head of its TV activities in the U.S.
Yet, in the face of so much competition in the home, theatrical continues to rule at the company. Says Buet, “STUDIOCANAL is above all a film company. The question we need to answer is how, in the face of profound market transformations, do we continue finding economically viable ways to produce our films? For producers, distributors and exhibitors, part of the answer will be to adopt flexible organizations and strategies to actively participate in, and make the most of, the drastic industry changes.” For his company, “this means leveraging the many assets we can put in the service of the continued funding of quality films.”
As for exhibitors, Buet says, “This means finding ways to be the first to bring a film to audiences and to maximize revenues from this premium engagement.” But options hover beyond the traditional, “whether it’s in theatres or through innovative developments, such as new kinds of digital platforms, or perhaps even agreements with the established digital players.”
Going more granular in his focus on numbers and financial pressures, Bessi believes that “some movies are too dependent on A-list talent, and despite the difficulties of the film business, the access to this talent is still incredibly expensive. However, our creative choices and financial structuring tend to limit our exposure to this issue.”
Confronting these “drastic industry changes” and the importance of financial stability to grow their film businesses, Buet and Bessi envision leveraging STUDIOCANAL’s diversity by increased internal cross-pollination and synergies and maybe some beneficial nepotism on the part of its deep-pocketed elders, Vivendi or the CANAL+ Group.
As an example, Buet reminds that “as a part of the Vivendi ecosystem, we have access to world-class music(al) content and talent through sister company Universal Music Group, to creators of series-for-mobile through cutting-edge producer Studio +, as well as to valuable outlets for our productions including pay-TV channels Canal + or international digital leader Dailymotion. With these close relationships, we can ensure the financial stability to accelerate our production pipeline of films that belong in theatres.”
STUDIOCANAL continues a big believer in theatres as the primary movie venue that viewers want. As it tracks all viewing trends, Buet acknowledges that “it’s the younger audiences and their constantly evolving habits that are grabbing all the attention.” But, he adds, “the counterpart to this diminishing theatre attendance of the younger, digitally savvy audiences is older demographics becoming an increasingly structural, and regular, moviegoing group.”
As Buet and his fellow executives make clear, STUDIOCANAL assures its rich future by continuing to create, market and move quality content. “With the abundance of quality content available at home,” Buet observes, “moviegoers are forming ever more sophisticated and demanding tastes. It’s our responsibility as distributors to provide the content that will convince these mature audiences to spend 10 euros [about a $14 equivalent] on a movie ticket instead of a monthly Netflix subscription, and we do this by bringing to market the type of unique proposals that just can’t be missed. Investing in technologies such as 3D and IMAX screens is an option, but for today’s discerning public, innovation in technology must go hand-in-hand with innovation in content: Great technology supports strong, purpose-built stories.”
Buet gives credit to several U.S. studios, with titles like Guardians of the Galaxy and Deadpool, for cracking the code of product that is both innovative yet accessible. “[They] are already reinventing their recent superhero model to create never-before-seen stories, and they’ve had great success. By working with the best talent, we can bring other unique films that will always find their public in theatres—whether it’s a broad audience for four-quadrant offerings or a more narrow group for elevated genre programs… And once they’ve found their public in theatres, they will continue to do so on other media.”
Providing such innovation and quality, especially “in the face of these profound transformations,” will continue to be STUDIOCANAL’s ongoing strategy “to position ourselves on the top-class content that is above all capable of generating strong value in theatres and from there guaranteeing maximized revenues from ancillary rights.”
Comparing the U.S. studio approach to his company’s, Buet observes that while the studios “concentrate increasingly on tentpoles and tested franchises—‘event programming’ that generates large theatrical audiences and multiple licensing opportunities—part of our strategy is to invest this space with high-end family entertainment, capitalizing on brands that can bring the whole family to theatres. Because kids’ content is a driver of subscription and retention on pay services, we know these titles will also secure excellent returns on other media.”
Furthermore (and as a STUDIOCANAL film like Our Kind of Traitor will test), he adds that “we firmly believe in the kind of high-class, mid-range movies that demanding moviegoers are still looking for in theatres.”
Beyond its profound faith in the theatre experience and its strategy to confront technology-driven changes, STUDIOCANAL also subscribes to a kind of expansionist strategy that has it looking beyond the familiar territories where it is already entrenched; hence, ambitious plans for business in China, evidenced by STUDIOCANAL becoming the first European studio to open a bureau there.
From its new Beijing base, says Lupfer, STUDIOCANAL will be able to promote its catalog in the country, support distribution of its product there and, middle term, grow active in local productions. The proximity will, of course, afford maximum opportunities to forge agreements with local industry partners.
Commenting on the widely reported movie surge in China, Buet adds that “many factors make us uniquely situated to participate in this growth… Our position as European leader puts us in the top spot to obtain import quotas. And following a busy year we had in China with a total of five movies released theatrically in 2015—more film slots than Warner Bros. or Paramount filled—and 2016 gearing up to be another great year with seven of our films present at the Beijing International Film Festival this year, the next steps for STUDIOCANAL to explore are co-financing and production deals wherein we provide local partners with our international sales expertise.”
And Buet sees other opportunities there: “Many cult titles from our catalog have never been released in China, so this opens up opportunities for exclusive first-ever releases for local audiences as they develop more demanding tastes, like we’re doing with [the 3D and likely IMAX version of] Terminator 2” in a partnership with China’s DMG Entertainment. Notes Buet, not parenthetically, “This will mark T2’s first time on Chinese screens.”
As STUDIOCANAL expands with new strategies, territories, partners and content beyond its cherished traditional “canals” (“channels” in French, “waterways” in English), the company is smartly digging new canals as so much new floods the old ways of navigating in the entertainment business.
How ironic that STUDIOCANAL, the French juggernaut of filmed entertainment—in going nautical along new canals—should torpedo that “unsinkable” French expression that “the more things change, the more they stay the same.”