Jacques Audiard, Audrey Diwan Among French Filmmakers Calling Out U.S. Directors’ Attack on European Regulations: ‘Our Policies Should Not Serve as Scapegoats’ (EXCLUSIVE)

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Under the Trump administration, there’s been a significant escalation of controversy within the European Union due to the president’s tougher trade policies. Simultaneously, this has ignited friction between the American and European film industries.

Filmmakers such as Jacques Audiard (“Emilia Perez”), Costa-Gavras (“Z”), Audrey Diwan (“Happening”) and Claude Lelouch (“A Man and a Woman”) have voiced their concerns against the offensive stance taken by the American film industry towards EU regulations, particularly the Audiovisual Media Services Directive (AVMS). This directive requires foreign streaming platforms to allocate a portion of their earnings towards local film production in Europe.

In a public letter endorsed by France’s leading film associations, ARP (Authors, Directors, Producers) and SRF (Society of French Directors), French movie creators expressed their shock upon reading the agreement signed by the Director’s Guild of America (DGA) and the International Union of Theater, Television and Radio Employees (IATSE).

In March, a message was forwarded to the United States Trade Representative (USTR) that emphasized an imbalance in investment commitments across European nations like France, Germany, and Italy. The Motion Picture Association (MPA), in this communication, attributed these local content requirements and investment obligations for erecting barriers, lowering residuals for their guild members, resulting in job losses, and prompting relocation of productions.

Filmmakers like Cedric Klapisch, Stephane Demoustier, and others who signed the open letter (who happen to have their recent works showcased at Cannes) believe that France’s active cultural policies and regulations are a significant factor behind the country’s thriving cinema market. It boasts the most cinemas in Europe. They further emphasize that France’s distinctive system of a levy on every movie ticket sold is advantageous for American films, which typically earn around 45% of France’s box-office revenue. In fact, in 2024, blockbusters such as “Inside Out 2,” “Moana 2,” and sequels like “Despicable Me 4” and “Dune 2,” produced by Disney, were major contributors to the French box office, selling over 8.4 million and 6.7 million tickets respectively.

The assertion in the letter suggests that American independent films likewise gain advantages through French laws, as it is often observed that these U.S. indie productions generate substantial income at the French box office.

As a passionate film enthusiast, I can’t help but marvel at the impact of the film industry levy system, set up way back in 1948. This ingenious policy was designed to nurture cultural diversity and it has indeed done so remarkably well. The result? A thriving market where box office returns frequently outshine those from countries with lower tax rates!

In response to the claim made by the MPA, the French filmmakers offered a different perspective, arguing that the decrease in U.S. film production might not be due solely to foreign taxes or legislative policies.

As a film enthusiast, I’ve noticed a shift in Hollywood’s landscape lately. Studios are choosing to relocate productions overseas, major investors are scaling back their commitments, and we’re grappling with an inflationary climate and a contracting global market post-COVID. These factors could be contributing to the decline we’re seeing. It’s important to remember that our policies shouldn’t bear the blame for these strategic and industrial decisions, nor should they be held responsible for the waning production in the U.S.

The French filmmakers pledged that France would continue to be a haven and breeding ground for a wide array of narratives, they concluded their message by proposing that their delegates convene during the Cannes Film Festival to carry on this conversation and strengthen their collective stance.

In addition to the DGA and IATSE, the Motion Picture Association (MPA), which advocates for companies like Disney, Netflix, Paramount, Amazon Prime/MGM, Sony Pictures, Universal, and Warner Bros., voiced criticism of European regulations in a letter to the United States Trade Representative. This move prompted an open letter from a group of members of the European Parliament, led by France’s Emma Rafowicz, addressed to the President of the European Commission, Ursula von der Leyen, as well as commissioners Henna Virkkunen and Glenn Micallef. The letter appeals to them to safeguard the AVMS directive, stating that it is currently under threat from American streaming platforms seeking unrestricted access to the European market.

Amidst these ongoing tensions, Netflix has taken a step by filing an appeal with France’s Council of State against France’s windowing regulations. These rules require streaming platforms like Netflix to wait for 15 months before accessing newly released movies, despite the fact that they invest about 20% of their local earnings in French productions.

Here’s the letter from the ARP and SRF in full:

Honorable Members of the DGA,

Dear Colleagues,

With much curiosity and a hint of surprise, we’ve thoroughly read your correspondence to the U.S. Trade Representative. It seemed crucial for us to respond to your worries and restart a productive conversation about our related industries.

Your letter to the U.S. Trade Representative was intriguing and slightly mind-boggling, which prompted us to give it careful consideration. We believe it’s essential to discuss your concerns and reinitiate a positive dialogue concerning our respective sectors.

In many regions globally, including France within the European Union, there’s an established policy for films and audiovisual content. This policy has been instrumental in making France’s film market vibrant, as our unique approach and regulations have fostered such dynamism. Our forward-thinking cultural strategy has positioned France as the European country with the most movie theaters, and we attract a substantial number of cinema enthusiasts. However, it’s not just our local productions that benefit; this regulation is particularly advantageous to American films, which make up an average of 45% of our box-office sales. France remains one of the top markets for these movies. Moreover, our regulations also support independent American cinema, which frequently finds its audience in France, and we are always eager to provide a welcoming platform for such productions.

(Alternatively)

Globally, there’s a well-established film and audiovisual policy in various countries, including France within the European Union. Our unique approach and regulations have played a significant role in making our film market dynamic, attracting a large number of moviegoers. While our strategy has been beneficial for local productions, it’s particularly advantageous to American films, accounting for about 45% of our box-office sales. France remains one of the leading markets for these movies. Additionally, this regulation supports independent American cinema, which often finds its audience in France, and we are always eager to provide a welcoming platform for such productions.

In simpler terms, having strong national markets is essential for maintaining a thriving industry, not just in terms of attracting audiences but also in terms of building necessary infrastructure, and ultimately generating revenue from box office sales, TV broadcasts, and streaming services. This benefits works from all over the world, including American ones. We firmly believe that our policies protect not only French creations, but also creations from around the globe. To illustrate this, consider France’s cultural policy and taxes collected from all film broadcasters. These funds support a youth education program about films, helping to cultivate today’s and tomorrow’s moviegoers, and they finance various initiatives aimed at promoting film creation and distribution.

As a cinephile, I’m all about supporting the art of filmmaking, and that includes understanding the intricacies of our movie admission tax system. Established post-World War II in 1948, this tax collected on each ticket sold in French cinemas was conceived as part of our cultural and economic recovery efforts. Its primary purpose is to bolster our national film industry through redistribution, a mission that has earned it recognition across Europe for fostering diversity in cinema.

While the majority of benefits go to French films, international productions like those by Woody Allen or Quentin Tarantino can also tap into this support under certain circumstances, such as co-producing with a French company, employing French technicians or artists, and adhering to language, shooting, or local expense quotas. Films like Midnight in Paris and Inglourious Basterds have taken advantage of these incentives, demonstrating the system’s broad scope.

By fostering a more vibrant market, we generate higher overall earnings due to our large audience base, which significantly boosts the profitability of our tax. This often results in France’s total gross being greater than in countries with lower taxes and fewer ticket sales. Interestingly, such practices are sometimes labeled as “unfair trade practices,” despite the fact that similar protectionist policies have long been employed by the United States. For instance, the Webb-Pomerene Act of 1918 allowed exceptions to antitrust laws for exports, effectively enabling entertainment conglomerates to form cartels and collaborate on overseas film broadcasts until 2004. Furthermore, in 1946, the U.S. government agreed to cancel European debts in return for lifting quotas on French films in French cinemas. Even as recently as 2006, South Korea agreed to reduce its screen quota under a trade deal with the United States.

You voice worries over moving film productions, perhaps because of tax incentives or commitments towards creative investment.

Initially, it’s worth mentioning that our regulations are impartial because investment and broadcasting responsibilities have traditionally affected local broadcasters but now extend to all entities operating in France and Europe, regardless of nationality. Furthermore, studios and platforms’ strategies to move film production predated the implementation of these obligations. This can be attributed to tax incentives, a practice used universally in filmmaking industries: numerous states within the U.S. serve as examples. Production costs are lower abroad for reasons such as those seen in Canada, where American films have been filmed for the past two decades. Additionally, some streaming platforms aim to cater to local audiences with locally produced content, in their native languages, to increase market share in each country. Over half of MPA member companies’ earnings come from outside the U.S., demonstrating their strong capacity to tap into international consumers.

Indeed, we are saddened by the drop in US film production since 2022. It’s not fair to pin this solely on foreign taxes or legislative policies. Factors such as Hollywood strikes, studios deciding to produce overseas, major companies reducing their investments, rising inflation, and a global post-COVID market contraction could also contribute to this decrease. Our policies should not be used as scapegoats for strategic and industrial decisions, nor for the decline in US production. Given the widening gap between the US and other countries, it’s crucial that we, European and American filmmakers, stay united and supportive, promoting beneficial collaborations in our industries for economic, political, and cultural reasons.

From the inception of cinema, filmmakers from both sides of the Atlantic have consistently admired, inspired, and collaborated one another, fueled by an unwavering passion. We also face similar challenges, such as seeking greater recognition and appreciation for our professions, striving to ensure that AI, which is increasingly impacting our industry, respects copyright, and preserving the territoriality of rights in Europe, which leads to improved distribution and circulation of works, ultimately resulting in better earnings for both our members.

In your letter, you bring up the concept of a “worldwide exchange of free speech.” We strongly prioritize preserving creative autonomy and encouraging open expression, values that are central to our mission. To maintain ourselves as a sanctuary for diverse stories, we suggest arranging a meeting between our organizations to further this conversation and form a united force. The Cannes Film Festival might serve as an excellent platform for us to share perspectives on these topics collectively.

You talked about global free speech in your letter. We value creativity and free expression, which are important to us. Let’s meet up to discuss this more and work together. The Cannes Film Festival could be a good place for us to share ideas about this.)

Please accept, dear colleagues, our warmest regards,

Among our filmmakers, we have Costa-Gavras, Claude Lelouch, Jacques Audiard, Cédric Klapisch, Euzhan Palcy, Radu Mihaileanu, Audrey Diwan, Stéphane Demoustier, Zoé Wittock, and others who are part of our team.

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2025-04-18 16:19