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Culture

France weighs smartphone tax as culture subsidy

Who should pay for culture? France has long supported hefty state subsidies, like boosting filmmakers' budgets and paying artists unemployment benefits. Now in the digital age, France is adjusting its approach.

Ahead of next month's transatlantic trade talks, France has said it is as hostile as ever to free trade when it comes to books, films, music, and video games.

French Trade Minister Nicole Bricq said these must not be included in free trade negotiations and that France would scupper the talks if they were.

"We have, we French, laid down pre-conditions for negotiations," she told a press conference. "On June 14 and 15, the [European] Commission will request a mandate for opening negotiations. We have said, very early on, we the French, that we have a problem with what we call cultural exception."

It was, she said, a "red line." France is not alone.

French Culture Minister Aurelie Filipetti and her German, Austrian, Belgian, Bulgarian, Cypriot, Spanish, Hungarian, Italian, Polish, Portuguese, Romanian, Slovak and Slovenian counterparts have also published a letter saying that the audiovisual industry must be kept out of the remit of the talks.

The UK is taking a different line. Everything must be on the table, without exception, said British Prime Minister David Cameron in a speech made next to Barack Obama at the White House.

A picture taken from the roof of Paris' city hall shows bridges along the Seine River in front of the Eiffel Tower in Paris

In Paris, high value is placed on the arts

Proposed culture tax on smartphones

French intransigence on its exception culturelle was given substance by the publication of a report commissioned by French President Francois Hollande on the issue.

"Cultural Exception - Act II" is 486 pages long and weighs 2.3 kilograms. It contains 80 propositions on how to protect the value of France's "creative industries," which, according to Culture Minister Filipetti, make of three percent of French GDP.

The most head-line grabbing is a new tax on smartphones, tablets, e-book readers and other devices that can be connected to the Internet.

If adopted, the tax amount to about one percent of the purchase price. In 2012, smart devices amounting to 8.6 billion euros ($11.1 billion) were sold, so that would theoretically produce 86 million euros of tax.

What's France's cultural exception?

"Taxes! It's always taxes!" exclaimed the opposition UMP's Vice-Secretary General Camille Bedin. But France's cultural exception has always been a system based on taxes begun under the conservative General Charles De Gaulle, who served as French president from 1959 to 1969, and continued under more recent right-wing presidencies such as those of Jacques Chirac and Nicolas Sarkozy.

French actors Omar Sy (left) and Francois Cluzet in a scene from the film The Untouchables

"The Intouchables" was a French film that made waves all over the world

A couple of examples from the film industry. Every time you buy a ticket in a French cinema - whether it's to see a French film like "The Intouchables" or an American one like "Jurassic Park 4" - 11 percent of what you pay goes to subsidize the French film industry.

Also, television stations that broadcast movies are obliged to pay an extra fee in order to keep the French movie making show on the road.

Film industry subsidies cost about a billion euros a year. According to a recent investigation by the French News TV Channel BFMTV, 40 percent of the funding for the French film industry comes from the public purse, but only 15 percent of French films turn a profit.

BFMTV admitted that nearly all the films with Gérard Depardieu and other big French stars make a loss - not because Depardieu isn't great, but because he costs a lot.

In exchange, the French get a lot of movies - close to 250 a year. Compare that to about 135 for the UK. And some of those French films are international hits, like "The Intouchables" and "The Artist."

'Culture is not a business'

Compared to its European neighbors, France has an amazingly generous system by which it pays unemployment benefit to people in creative industries who are between jobs. These intermitents du spectacle (those who work intermittently in the entertainment sector) cover a huge swathe of personnel ranging from Juliette Binoche to the woman doing the research for a television documentary.

Gérard Depardieu in the film Asterix & Obelix

Gerard Depardieu can make a film expensive

Ultimately, the unemployment benefit functions as a subsidy which enables production companies to pay people less and make programs more cheaply. The TV stations, in turn, can also buy the programs more cheaply.

The government also obliges radio stations to play a certain amount of French music on pop radio stations and, in one striking example earlier this month, Industry Minister Arnaud de Montebourg stepped in to stop the sale to Yahoo of a majority stake in the Dailymotion video sharing website which the minister described as a "fledgling," though it is in fact a large company.

Pierre Lescure, the former head of Canal Plus television and author of "Cultural Exception - Act II," says that initially the cultural exception was all about preserving cultural diversity. But now, "the determined adaptation of the French cultural exception in the face of digital usage is […] a burning obligation," he said.

Speaking at the Cannes Film Festival, the director of Germany's Frankfurt Book Fair Jürgen Boos agreed with the French approach. "Like in cinema, we tell stories," he said. "We have to cooperate to protect our languages and our cultural identities," he said. "Cultural exception is about stimulating creativity: Culture is not a business."

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