Copyright Cartoon, the European Association of Animation Film Cartoon Master Postdam, Germany, November 2005

Since April 2004, Franck Priot is Deputy Director of Film France, where one of his areas of responsibility is marketing to foreign producers. Before this he worked for five years for the French weekly trade paper Ecran Total, covering film production and the international markets. In July 2005 he published (with Editions Dixit, Paris) a book of case studies on the financing of French films.

Is the European market very different from the rest of the world?

Because everywhere in the world the experience in the theatre is the same, we tend to assume that the exhibition and distribution industries are quite close to the ones we know, for instance in Europe but, in fact, there are many parameters that can change how a market works and there may or may not be opportunities for your film to be bought, to be screened in that market.
I will take examples of four very different countries.
The figures I will use are from one source, a booklet of figures published every year by the market of the Cannes film festival. 5000 copies are printed every year so it quite easy to find and there are many figures about many markets. You will be able to understand how every market in the world operates.

How is the Japanese market structured?

Japan is a very special market. Firstly there are not so many theatres; it is a very under-screened market. 50,000 people per screen, compared to Europe, such as France and Germany where the average is 10,000 to 15,000; so a very under-screened market. But it is very good for exhibitors. 30,000 admissions per screen with an average ticket price of 10 euros is a lot of money.
And the price of the ticket for arthouse tickets is even higher than that; it can be up to 11 or even 12 euros. So exhibitors are in very strong position, both for commercial and arthouse titles. In fact Japan may be one of the last countries in the world that is doing ‘circuit-booking’. Usually when a film is distributed anywhere else, the blend chosen for each release will be different. In Japan, this is not the case. In fact when a film is released, it will use one of the circuits and everyone will know which screens will be in this circuit. The distributor just has to negotiate which circuit he wants to be in. He cannot choose this or that place, the balance of power is with the exhibitor chains, they are really powerful. This balance of power also applies to arthouse titles, in fact the common way to release any foreign independent movie in Japan is to release it in one screen in Tokyo and so theatres with three or four screens are very picky about the choice of film. In some cases, distributors who have bought a foreign title have to wait for months or years to have the available slot in the theatre because as long as a title is performing well, the theatre keeps the movies on the screen, and in some cases the movie can stay a very long time.
So that means that part of the marketing job we imagine being done by the distribution company in Japan is done by the arthouse theatre itself. And even for a release in one theatre, the work done on marketing can be very important. For instance in the case of Kirikou, the Michel Ocelot movie. Kirikou was released first on one screen but Japan was the only market where they had a toy made from a Kirikou character just for the release in Japan, but not for Europe. So the marketing factor is very important in Japan and even if you have just a one screen release there, you will be asked many questions, you will have to talk with the exhibitor as well as the distributor, and you will be surprised by the level of expertise of the people there.
Even for 1 screen, any release is supported by huge work in the marketing level. I should stress that there is a huge Japanese animation industry and, in fact, they dominate the market. In 2004 four animated features were in the top 50 of the box office and three of them were Japanese. The no 1 in 2004 was a Japanese movie, Howl’s moving castle, the Miyazake movie. So that means that Japan is definitely a market for a wide release of an animated feature but it’s very difficult to find a place if you are not some kind of branded Hollywood feature such as Disney, Dreamworks or Pixar or a Japanese brand because all the Japanese animation titles that are released are not only a movie but are also in most cases a TV movie, a Manga, a brand, it’s the release of a brand. So I never heard of any European animated feature being released as widely on the same number of screens as a big Hollywood or Japanese movie. But for the European animated features aiming at a more sophisticated audience, which can be sold on the name of the directors with a very strong personality in the design, the Japanese market can be very rewarding. In some cases the sale agents can get a good price for independent foreign movies. For example, something like 40,000 to 80,000 euros for all Japanese rights which is not bad.
A huge hit for a foreign movie is one million admissions, which is very unusual, only films like the Pianist. Above 50,000 is a hit for a foreign movie because this is the level where you can have the film bought by pay-TV in Japan, which also means a lot of money. And DVD is strong too. One screen release will keep it as long as it is doing good business. It can stay 10 weeks in arthouse theatres.
Best not to contact exhibitors directly. Even though the involvement of the exhibitor is important, it doesn’t mean that the distributor doesn't deal with the foreign producer and sales agents. Contact a Japanese distribution company first. In some case there are rights brokers. They buy the market rights and are reselling the DVD to one distributor, another for theatre etc.
There is no quota import system. Your film will be released through the Japanese company. Do not try to distribute it yourself. It is not easy to understand, so find the right partner. The deal with sales agent, there is a minimum guarantee, if the film has a success, you may get money back after the MG. But it’s not that easy to get some of the benefits from the local distributor. They tend to explain that they did some extra P&A, and there’s no profit. It’s the same in any market; it’s always difficult to get the profits when the film is a success.

2nd market: Russia.

Russia is another under-screened market, there are figures of 100,000 and 200,000 because it depends what you’re calling movie theatres since, according to Russians, there are only 700 modern permanent movie theatres with some kind of control over box office. Of course the reason there are so few movie theatres in Russia is not the same as Japan. It is a much bigger country. There are few multiplexes and this has a big impact on animated features. There are very few multiplexes because most of the theatres are 1 screen and still owned by the public bodies from the communist years, most of them are City Hall owned, or other public entity, even unions may have some theatres. And in most case they don’t have the money to turn these old one-screeners into new multiplexes. So the multiplexes appearing now in Russia, especially in Moscow, are not the old theatres converted but are brand-new, built as part of shopping centres. So having a market with mostly one-screen theatres it not good for animation because a distributor wants to put on that screen a movie able to attract any kind of moviegoer so he won’t put an animation title which is not designed to attract a wide audience. That’s why you see that in the box office top 50 of 2004, the biggest animation titles were only 10, 11 or 15th.
Another important factor is that piracy is very strong. Piracy on VHS and DVD is especially bad for animation since it does very well on video. The other consequence of the piracy is that so far Hollywood companies don’t have a distribution arm in Russia, because the fight between the distribution (copyright owner) and the pirates in some cases is a real fight. There are many cases where a local distribution has sent teams to destroy the location where the pirates kept their DVDs. Hollywood prefers to deal with some strong Russian independent distributor and let them clean up the mess. The domination of Hollywood in the Russian market does not have the same power as it does elsewhere, especially in Europe.
There is an interest in a European brand because the major is not so important. Also because during the Communist era, there was a lot of interest in all kinds of European movies, French, German, Italian films were shown. The French were surprised to discover such a knowledge of commercial French cinema. There is definitely a market for the Asterix brand, which has had live action and animation titles and Taxi which is a live-action franchise.
So Russia is a market where it is possible to grow a European brand and there are not many markets where you can have this kind of hope. Also, free TV stations are very fond of feature films, they are broadcasting many of them in prime time, so they need a lot. There are many foreign titles bought not for theatre but for TV and DVD.
When a sales agent or local distributor talks about Russia, he means all Russian-speaking markets because generally, in 95% of cases, they are all sold as one market.
A good success in Russia is over one million but there are very few. There is no real market for arthouse titles. There are probably only 5-6 movie theatres in Russia where you can screen subtitled foreign movies. As soon as you are over 20,000 admissions for an arthouse film, it is definitely a success in Russia.

India

For many years there was no market for animation in India. The first wide release for a local 3rd animation feature was a huge success. It’s called Anuman, from Indian mythology, he’s the monkey God. So right now it seems there is a market for animated features appearing, but still it is a very strange market to what we are used to. Firstly, there are only 5,000 movie theatres according to industry sources, the figures from different regions varying greatly. There are one billion people. 200,000 per screen, and they go often to the movies. 3.2 tickets per habitant, we have to remember that much of the country is countryside, so that people living in a big city are very fond of going to the theatre and it is still very important to go to the cinema. It’s amazing; it’s still the number one entertainment. It is as it was in Europe in the 50’s, before TV. The special point about the Indian market is that it is totally dominated by local movies and as there are 200 to 300 screens in multiplexes so most of the market is one screen theatres and they all want to have titles appealing to everyone. They are not used to animated titles. Also it’s hard to attract Indian people to animation. Some signs in the cinema say that from 1 year old, everyone pays but you can see a mother with a six-month-old baby in the theatre – even for an action movie. Young boys and girls are used to action films at 3 and 4 years old, they don’t need animation. So it’s quite a new idea in India.
The marketing hook of the Indian 3D feature, Anuman, the catch line was “your children have seen too many foreign movies let’s discover our own mythology”. It was 90 minutes long, quite long for an animated movie but very short for an Indian movie because they are 180 minutes long.
A market which is changing very fast because the multiplexes are booming. The government decided that taxes on the tickets, 100 rupees, 40 percent (depending on the state) would go to the state in entertainment tax. For the multiplexes they decided to slash the entertainment tax, it stands at only about 5% (depending on the state). Suddenly it is very attractive to open multiplexes, opening space for foreign movies generally and for niche movie audiences. One can hope that in the coming years there will be more space for animated movies in India. Not an easy market but it is still worth keeping an eye on it. Most of the Europe countries have signed bi-lateral co-production treaties with India, so one would hope that there would be a way of exploring collaboration. Lastly, there are at least five or six Indian film industries, not just one. Five to six languages in which more than 50 movies are produced every year. There are so long and dialogue based, they are not dubbed from one language to another, but a foreign film can be dubbed from one language to another. Dubbing is new; the first foreign film dubbed was Jurassic park, only in 1993.

China

Another experience, they have two big problems. One is the lack of movie theatres, for the same reason as Russia. Public bodies, city halls, unions, own all the theatres and of course they don’t have the money to renovate them. The figures change depending on who you ask, but according to the film bureau, there are 2,500 modern theatres, by modern they mean there is some kind of box office control. No one in China is able to tell you how many tickets are sold every year, the only thing they know is the global figure for theatres with computerized box office because the government takes 5% on every ticket and this is supposed to help them renovate all the theatres. In fact, the government still control the whole distribution industry, they have a monopoly, when a foreign is sold in China, it means the sales agent is selling to a distributor but that distributor will work with one of the two official Chinese distributors. The local distributor will only be in charge of marketing; he will not decide the number of prints or in which theatre. The modern cinema ticket is quite expensive and is as expensive as a DVD. Of course, there is strong piracy and there is no waiting system. So any film distributed is supposed to be ready for any kind of audience.
The other problem is there are not enough movies to keep people going to the theatres. There are quota systems in importing movies, so Chinese moviegoers would be happy to see more and more foreign movies but in fact the Chinese government decided that on a profit-sharing base, only 20 movies a year can be imported. Some are bought for a fixed price and the sales agents cannot get any money back from the success of the film. There is no strong domestic film industry and there is a censorship problem. Topics in our western success, most of them don’t work for a Chinese audience; they don’t like stories with ghosts or vampires. You can do a Triad gangster movie, you can mention any kind of social issue with the government in a movie, but it’s a difficult to make attractive movies with limited topics.
The film bureau is out to feed the theatres without losing the market to foreign movies. So they increase the number of so-called Chinese movies by increasing the number of co-productions. They have signed up with many countries, Italy, UK and are in talks with France. There are few, one or two every year, big Hollywood animated films released in China. And they did very well. Finding Nemo was number 2 at the box office in 2004. Number 1 was Hero, the Zhong Ghi movie, a Chinese movie.
So the parameters, the questions you should ask of a foreign country to discover is there a market for your movie.

• How many inhabitants per screen?
• How many tickets sold per inhabitant?
• Proportion of multiplexes, very important factor
• What is the average ticket price, linked to the MG
• Is there a waiting system?
• What are the available media for promotion?
• Is there local competition?
• Are there import quotas?
• Who are the key players?
• Is there local animated production?

All these figures you can find in the booklet Focus 2005.
From one country to another, things are different. That’s why foreign producers use sales agents, to navigate. In a conflict between local distribution and sales agents, there is some kind of arbitration body. The Independent Film and TV alliance, a body that organised the AFM, includes many sales agents and production companies around the world, has its own arbitration system. And most of the conflict goes there first then later to courts. It’s best to find an agreement. When you are doing a contract with a local distribution, always mention that the court will be the local court. That way it can be executed locally. We need the sales agents to handle these things, there are many difficult situations; they are key players.