The fall season is typically a busy time for French animation. Companies get ready to show off their new projects, collaborations, and distribution agreements at events like the Unifrance Rendez-Vous , Cartoon Forum, Mipcom, and MipJunior.

However, this year, French animation faces a difficult situation. International distribution platforms have been reducing their investments in the region, after years of heavy spending, particularly during and after the pandemic.

Despite holding its spot as France’s No. 2 screen industry export medium, with a 25.2% market share, animation had a rough 2023. Foreign sales fell 11.2% to €51.2 million ($56.3 million), according to a CNC report unveiled at the Unifrance Rendez-Vous on Tuesday. The overwhelming bulk of that drop can be attributed to American investors, who cut back by 69.7% to €4.3 million ($4.7 million). The rest of the world saw a less steep drop of just 6.6% to €12.9 million ($14.2 million), still significant.

The studios that had strong partnerships with U.S. distributors, like Xilam , which produces Disney+’s “Chip ‘n’ Dale: Park Life” and “The Doomies,” were hit particularly hard.

“Xilam has been a leader in working with streaming services for many years, so we were prepared for some downturn, but it has been much more severe than expected,” says company founder CEO Marc du Pontavice.

“Both producers and distributors have been affected by these reductions, either directly or indirectly,” confirms Morgann Favennec, deputy managing director at Mediatoon and VP, international financing at Ellipse Animation. She explains that while many French producers didn’t previously rely on global players, even smaller companies are now feeling the impact of these cutbacks when pitching new projects. “Traditional broadcasters have never received so many proposals, which has led to delays in the decision-making process.”

Production companies of all sizes and ambitions have been forced to adapt their business practices to stay afloat. Some have opted to reduce costs or scale back operations, while others have diversified their offerings.

At Xilam, “We have developed alternative business avenues and diversified our strategy to mitigate the impact, such as pushing forward with adult animated series like Zack Snyder’s upcoming series’ Twilight of the Gods,'” said du Pontavice. “We’re also investing heavily in feature films, such as our upcoming project ‘Lucy Lost.'”

Mediatoon and Ellipse are currently working on “Dreamland,” the company’s first YA series, as an example of their initiative. “Our goal remains to offer the most diverse selection in demographics, genres, and storytelling to meet market demand,” says Favennec.

With Hollywood commissions slowing down, many French companies are also seeking support from other markets. According to Mélanie Erréa, distribution head of sales and acquisitions at Miam !, which recently joined the adult animation series “Mare the Mermaid,” “We have always enjoyed a strong partnership with local players at Miam!, but we’ve also worked with other national players across Europe, many of them public broadcasters, who come on board during production. This makes us fortunate to have them as part of the process. However, we also collaborate with local broadcast and platform partners outside of Europe, and we rely on all these factors to make it work. However, the doors are definitely more closed now with the big global platforms.”

Emmanuèle Pétry, Dandelooo producer and head of international, says that another concerning consequence of streamer cutbacks is the creation of a socio-economic divide. Lower-quality titles are flooding free digital services while more expensive and meticulously crafted content is being reserved for premium platforms, making it inaccessible to many.

“This disparity highlights a social and political injustice reflecting the unequal access to premium content,” Pétry says. “Our approach is to produce high-quality, visually appealing programs. Even though it means greater pressure on securing funding gaps and achieving international distribution, it aligns with our commitment to excellence. We also prefer to create smaller formats like ‘ Max and Rabbit ‘ to make this financially feasible while still delivering top-notch content.”

Dandelooo isn’t the only French company paying closer attention to how children watch animation. With fewer commissions being awarded, it’s more crucial than ever to understand what distributors are still interested in purchasing and which platforms can help each title find its audience.

Favennec says that while it’s always important to consider what the audience wants, “I would rather know what the broadcasters and commissioners are looking for! Preschool and girl-centric series are no longer a priority. Strong intellectual properties remain a safe bet.”

Pontavice agrees and says established IPs have become the standard for global players. “VOD platforms are seeking less volume and more serialized storytelling. It’s becoming more difficult to engage audiences with entirely new material, as children tend to gravitate towards what they already know.”

Although local French distributors, particularly public broadcasters and platforms, are being overwhelmed with proposals, they remain one of the most essential components of the country’s animation ecosystem. Recent changes to the French animation landscape perhaps represent a return to normalcy rather than any significant upheaval.

“The beauty of the French system (based on legal production obligations) provides a supportive framework,” says Pétry. “We have a fantastic FVOD platform called Okko, which is supported by public broadcaster France Televisions, along with the 24-hour Gulli and TFX kids’ blocks, which also play a supportive role in the French industry. These platforms ensure and offer children access to many globally successful programs.”

As they navigate the future, French animation creators will likely value the established, publicly funded systems that have fostered one of the world’s most exceptional animation landscapes.