Though rising finance in France has become increasingly complicated, the French film industry is still recognized as being the strongest in Europe, due to its relatively high domestic market share, even in off years, and a financing model including national, regional and local subsidies, obligatory TV investments and tax incentives.
The main change to this system in recent years has been the introduction of the country's two-tier tax rebate scheme - for domestic and international productions.
Film-related tax relief schemes have existed in Europe for decades. In the 1990s, Ireland and Luxembourg used such schemes to spawn their own production hubs; in 2004, the U.K. introduced the game-changing film tax-relief scheme, that has enabled Blighty to attract around 30 Hollywood runaway shoots per year.
Since 2013, the U.K. has extended rebates to vfx work, animation and TV production, mirroring the French model.
France decided to enact tax rebates because it was keen to attract more international productions and was equally concerned to curb its own runaway shoot phenomenon - in particular to stop French films relocating to cheaper locations in Eastern Europe and also to French-speaking neighbors, Belgium and Luxembourg.
The hike in the caps on the schemes, introduced in 2013, has ensured an increasing concentration of shoots in France.
In 2013, there was an average of nine shoots per day in Paris, of which one third were feature films.
The Paris-Ile de France region is increasingly positioning itself as Europe's premier film production hub, while simultaneously building synergies with its closest rival, London, and also with production hubs in Belgium and Luxembourg.
"One of the key things that France has for producers is the quality of services that we can offer, including first class technicians, internationally renowned locations, significant financing and now world class studios and special FX resources," explains film financier Leonard Glowinski, prexy of Paris-based film fund consultancy, 22h22.
"Our strength in France is that we're not just specialized in one area. We offer the full package," says Franck Priot, COO of Film France. "Our strength is that we can offer everything and we have developed many ways of working together."
In the European film world, many roads lead to Paris, given the high proportion of co-productions involving the French film industry.
The Paris-Ile de France region boasts the presence of pan-European media groups such as pay TV giant, Canal Plus Group, and houses the overwhelming majority of French production companies, VFX companies. It also benefits from the fact that France hosts the leading film and TV gatherings in Europe - the Cannes Festival and the MIP and Mipcom TV markets.
Of particular significance, the region is home to many of Europe's leading international sales agents, thus centralizing market knowledge and distribution links.
Finally, the region has significant economic muscle - it's Europe's second-biggest economic region and generates 5% of Europe's total GDP.
Paris is unlikely to overtake London in terms of attracting Hollywood shoots - due to differences of language and filmmaking culture - but the region nonetheless has strategic advantages that are likely to pay dividends over the medium term.
The multi-lingual mix of French film production means that it can court many more international partners, while at the same time its strong indigenous industry makes it less dependent on volatile foreign spend.
The U.K. situation is very different, given that 80% of U.K. production spend is generated by inward investment films, which can vary considerably from one year to the next.
Excluding studio pictures, the indigenous U.K. industry represents less than 15% of the total production spend on French films.
"Cinema has always had cycles," explains Thierry de Segonzac, prexy of technicians union FICAM. "You need a strong domestic industry to bide you through the lean years."
"The core of our ability relies on the skills and strengths of the French TV and production industry. In the case of the Paris production hub it's not just about films from Hollywood it's about cinema in general," says Priot. "For example in location shows in the U.S., each state talks about its depth of crews and support services. In France we have almost infinite depth, since we're shooting over 200 French movies a year - that gives us an extremely strong base."
"The Eastern European countries still attract foreign shoots, notwithstanding recent changes, but by far our biggest competitor for international productions is the U.K.," suggests line producer John Bernard.
"We now have a better set of facilities and we're more competitive, but there still needs to be further work to be done to adapt to the Anglo-Saxon way of making movies."
"London and Paris are the two key film productions hubs in Europe," concurs Olivier-Rene Veillon, exec director of the Ile de France Film Comission.
"Both are universal cities, but Paris has a much broader range of languages and is more open to other world cultures."
In the new map of Europe, with high-speed rail links between the main capitals, there may even be scope for forging a larger film production hub that encompasses both London and Paris.
The Ile de France Film Commission has a partnership with Film London that includes joint organization of two annual events - ParisFX and Film London Production Finance Market (PFM).
"London and Paris are a two-hour train ride from each other," Veillon explains. "It's quicker to get to central London than some parts of the suburbs. We have a strong partnership with Film London that we aim to strengthen further."
Other professionals interviewed by Variety focused more on the synergies that exist with Belgium and Luxembourg, that are not only competitors but also a source of co-production funding.
Indeed, the vast majority of French co-productions include either Belgium and/or Luxembourg as partners (83.1% in 2012) and both countries are now also key sources of co-productions that are majority-financed outside France.
"I'm not so sure about synergies between London and Paris," explains Leaonard Glowinski. "The U.K. is developing clearer production synergies with Ireland. In our case, there may be more intelligent manners of combining the French and Belgian systems. It's more obvious in terms of synergies."
Thierry de Segonzac, prexy of technicians union FICAM, agrees: "The Belgian tax shelter system isn't so bad for the French, due to the geographic and cultural proximity and our shared language. It's enabled us to organize an increased number of co-productions. The situation is very different in the case of French productions that are shot in Turkey or Eastern Europe, where there's no creation of mutual value."
French players are aware that with a concerted medium-term strategy they can leverage their assets and attract an increasing number of foreign productions to their shores - not only from the U.S. but also from the rest of the world, in particular Asia.
TRIP also incorporates tax rebates targeted at VFX work and animation. This has already provided a major boost to France's VFX/animation sector - the most visible example of which is Universal's Illumination MacGuff, whose Paris-animated "Despicable Me 2" grossed over $970.1 million worldwide.
The 2013 CNC technical industries report emphasized that while France lost out on the opportunity to become a major videogame production hub, it can't run the risk of the same happening in cinema.
Thierry de Segonzac believes that the main need at present is to increase the sector's efficiency and promote France as a key production hub: "There's still work to be done in France especially in terms of promotion and marketing of our locations, and thereby our films. For example, joint initiatives could be established between Unifrance and Film France. We should focus on our strengths and how to improve our own organization and promotional activities, rather than trying to devise ways of overcoming our competitors."Related storiesFrederique Bredin - France's Tax Rebate 'Contributed to Universal's Decision To Set Up a Base in France'Ile de France Location Expo: Record ParticipationForeign Helmers Remix France's Unique Heritage Sites 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLCCopyright © 2014, The Baltimore Sun