France 3.5.1
Aug 03

France 3.5.1

  • August 3, 2019

In 1982 Jack Lang, in his speech in Mexico City during a world conference of Ministers of Culture, said the famous phrase “economy and culture, same fight” (« Économie et culture, même combat »). This phrase underlines the importance of cultural activities as factors of economic development and diversity – which prefigured the notion of a creative economy that is popular since the end of 1990s, and emphasises at the same time that creation and the arts cannot be submitted to only economic and financial terms. In this context, the State intends to support and regulate cultural industries for the sake of diversity and creativity.

The French phrase “cultural industries” commonly refers to the content industries that produce goods and provide services based on prototypes and which are reproducible, and to the transmission and distribution industries: publishing (books, press, records, computer games,…), broadcasting (cinema, video, television, radio) and information departments of news agencies.

This notion differs from the English notion of cultural industries, which encompasses a slightly broader range of activities that the ESSnet-Culture network defined, at European level, as follows (cf. “Concepts for the Statistical Framework on Culture”, Culture-Méthode n° 2011-3, DEPS-Ministry of Culture):

  • a “culture industry” (CI) defines an independent economic segment within the culture sector;
  • this economic segment groups together all businesses and independent traders that are involved in the creation and distribution of artistic products and services in the market;
  • cultural businesses and self-employed artists are either market-oriented or commercial in nature because they are predominantly financed by the market, by selling their works, products or services at market-driven prices;
  • the CI are represented by commercial or market-oriented sub-sectors of the culture sector in each of the 10 cultural domains: heritage, archives, libraries, books and press, visual arts, performing arts, audiovisual and multimedia, architecture, advertising, and crafts;
  • self-employed artists and those working in the CI occupy a special position because they often interchange between market and non-market-oriented activities and can therefore be stakeholders in both profit and non-profit markets; and
  • the CI do not include non-profit businesses, organisations or associations, which are predominantly funded by public authorities or private donors (civil society). The main purpose of these institutions is not fetching market-driven prices or generating income to ensure their existence.

Moreover, because several conceptions of the cultural industries exist in the world, and in order to avoid confusion over the similar terms and their different conceptions, the network also proposes that all the cultural economic activities in the framework of ESSnet must be called the “cultural sector”.

In 2013, different works measured the economic weight of cultural activities:

At a European scale, a report commissioned in 2005 by the European Commission had already underlined the economic weight of the cultural and creative sector:

  • the sector turned over more than 654 billion EUR in 2003, and contributed to 2.6% of EU GDP in 2003;
  • the overall growth of the sector’s added value was 19.7% in 1999-2003; and
  • in 2004, at least 5.8 million people worked in the sector, equivalent to 3.1% of the total employed population in Europe.

Even though these works adopt different approaches, perimeters and methodologies for their analyses, which can make the figures and outcomes presented all the more relative, they can help in comprehending a certain reality of the economic dimension of cultural activities in France.

In France, public policies must consider all the economic and social reality of cultural industries. Cultural industries are ruled within the general legal regime of firms, but some specific arrangements are planned in some sectors, in particular concerning direct support and the tax system:

  • tax incentives: reduced VAT on the press, books, cinema and broadcasting, phonograms; tax credits for film and video games for example;
  • establishment of a fixed book price (1981) including, since a specific law in 2011, digital books; and
  • regulatory measures such as broadcasting quotas for French language productions.

National bodies were created to support the economy of the cultural industries through a system of tax-redistribution, as for example the National Book Centre (Centre national du livre), the National Centre for Cinema (Centre national du cinéma et de l’image animée) or the National Centre of Song, Popular Music and Jazz (Centre national la chanson, des variétés et du jazz). These bodies manage special accounts fed by levies and fees on purchases, entrances, or others: National Book Fund, State Support Fund for the Cinematographic Industry and Broadcasting Industry, and the Support Fund for Song, Popular Music and Jazz. These funds support measures in these sectors (either selective or automatic such as, for example, “advance on takings” financing (avance sur recettes) to support films that are ambitious from an artistic standpoint, but facing difficulties in finding funding. In 1983 the Institut pour le financement du cinéma et des industries culturelles was created (IFCIC, http://www.ifcic.fr). This non-departmental public body, attached to the Ministry of Culture and the Ministry of Finances, facilitates access to bank credit for cultural industries. Also in 1983, the CNC and the Ministry impulsed the founding of the agency for the regional development of cinema (ADRC, http://www.adrc-asso.org), to help maintaining a dense and diversified network of cinema theatres all over the country. The CNC also backs the territorial authorities expenses for cinema and broadcasting, based on agreements signed between these authorities and the State (DRAC). Such agreements involve 40 territorial authorities and from 2004 to 2015 the financing reaches 684,24 million euros: 518,04 million euros from territorial authorities and 166,20 million euros from CNC.

There are also specific aids (DRAC, territorial authorities) for small local or national cultural industries that have little commercial activity. This is the case for small labels, of contemporary or “current music” (musique actuelle). It is also the case for small booksellers, small publishers, for the cinema of art and the local theatres in medium and small cities, or rural areas. Local authorities often complement the national instruments and set up their proper support schemes and structures: around twenty Regional Centres of Literature (Centres régionaux des lettres, CRL) that coordinate their actions within the Interregional Federation of Book and Reading (FILL: http://fill-livrelecture.org/); around forty regional and local film and cinema agencies (commissions régionales et locales du film), which are set up for the purpose of attracting, co-producing and circulating films shot in the regions, and are federated in the network Film France (http://www.filmfrance.net).

In 2013, the Ministry published a guide about the different schemes that can support the creation and development of enterprises in the cultural industries (http://www.culturecommunication.gouv.fr/content/download/67306/515895/file/130516web-2.pdf ), and set up a database on the different public measures in favour of media and cultural industries at local, national and EU level (http://deps2.customproject.fr ).

The culture industries have undergone a series of major changes over the last twenty-five years. The range of products is continually expanding (books, records, films, then video, compact discs, CD-ROMs, DVD, online or e-products…). Their production and distribution has become more centralised and internationalised, and trading policies have become much more sophisticated. In the face of highly competitive markets, government initiatives aim to guarantee diversity with a broad range of cultural productions and to distribute them as widely as possible.

But the French system of support to the cultural industries is regularly criticised and controversial. The European Commission regularly points out the non-compliance of this system with the principle of free competition within the single market, even though the Commission generally validates the French public support system to cinema. Even at the national level, certain devices are sometimes questioned: an increase in VAT on books in 2012, cancelled again in 2013; and debates on the suppression of the book fixed price since 2008. Some comments regularly denounce the high production costs of French cinema, which is largely financed by the system of redistribution. The aids to the press are also regularly criticised for being obsolete and not adapted. Nonetheless, the Ministry of Culture regularly launches new aids to the press, in particular to foster the modernisation of the sector in the context of digital transition.

Moreover, these debates are not cut short. Concerning public support to cinema, many observers underline that, on the one hand, the European Union advocates the principle of cultural diversity and on the other hand, the support to French cinema partially conditions the vitality of the cinematographic industry, including the European industry. Indeed French producers, who benefit from the support system, finance many European productions and contribute to the development of European cinema.

The National Centre of Cinema also proposes, in partnership with the French Institute, a fund “Cinema of the World” (Fonds Sud Cinéma) to favour international coproductions that contribute to advocating cultural diversity. This fund allowed for instance the financing of seven films that were presented at Cannes Festival in 2012, with co-productions with Mexico, Colombia, Morocco, Bosnia Herzegovina, Algeria, and Iran.

The negotiation on the free trade agreement between the EU and the USA (Transatlantic Trade and Investment Partnership) rekindled the debate on the specificity of cultural industries. In 2013, 17 Ministers of Culture, and 15 European Film Agencies, including France, officially asked that cultural and audio-visual sectors be excluded from the trade agreements, with the leitmotiv “culture is not an ordinary commodity”.

Besides, after six years of legal battle, Google and the National Union of Publishers (Syndicat national des éditeurs) signed in 2012 an outline agreement on the digitalisation of the works free of rights, and on the referencing of the works. The conflict had begun when Google had started to digitise thousands of French works, without the permission of the authors or the publishers. From now on, each publisher can decide whether to sign a bilateral framework agreement with Google, as Hachette Livre did in 2011. The Ministry of Culture encouraged the legal action of the SNE. Another conflict with Google had to do with the remuneration for referencing press articles, after Google had threatened to stop indexing the French press articles if the referencing would be taxed. In February 2013, President Holland and Éric Schmidt, the executive chairman of Google, came to an agreement, unprecedented in the world, which plans a 60 million EUR fund to facilitate the digital transition of the press sector. At the beginning of 2013, the Minister of Culture confirmed the objective to revise and consolidate the aids to the press, in order to protect this sector as an essential asset of democracy. Another agreement was signed in 2013 between Google and Sacem (which collects and redistributes the income from authors’, composers’ and music publishers’ rights, see chapter 7.2.4) on the platform YouTube. This new commercial framework, which is valid for three years, was difficult to achieve as it comprehends major issues. According to a study by HADOPI (see chapter 4.1.6), music videos represent 13% of all the content of the YouTube platform, but generate more than 50% of its advertising income. In 2016, French justice launched a judicial inquiry on Google France to investigate about tax fraud and money laundering.