France's CNCreleased its 2004 survey of the local sector production on Wednesday, withheadline figures showing that the number of films produced in 2004 droppedslightly to 203 from 212 the previous year.

Overall, totalproduction spend was Euros 1.049bn, down from Euros 1.153bn in 2003.

The mainreason for the fall is a decline in foreign investment, down from Euros 364m toEuros 229m. France has suffered as other European territories offer morecompetitive incentives and tax regimes.

However,French backers increased their investment in the production sector, spendingEuros 820m, up from Euros 789m in 2003.

The CNC notedthat factors such as the recently launched tax credit scheme for localproducers - the credit d'impot - had helped boost local investment infilm and stem runaway production.

The most expensive film of 2004 was Luc Besson Arthur,a yet to be completed 3-D animated film with a Euros 65m budget. Both Madonnaand Snoop Dogg have roles in the film.

The gap between that film and the next most expensive issome Euros 38m. Comedy Les Daltons was made for Euros 27m while EmpireOf The Wolves, Chris Nahon's highly anticipated Gaumont-produced film costEuros 24m. Wolves is set for an April release.

At the lowbudget end of the spectrum, the number of films that cost less than Euros 1mfell from 41 in 2003 to just 20 in 2004. The CNC explained that this was downto films being better financed and making less use of deferrals.

Overall, ninefilms were made for more than Euros 15m and 15 for between Euros 10m and Euros15m. The majority, 33 films, were budgeted at between Euros 5m and Euros 7m.

The UK remainsFrance's most prolific co-producing partner with 13 films in 2004, down from 23in 2003. Belgium co-produced 10 films, down from 24 the year before. Germanypartnered on nine films, up from seven in 2003.

In total, 133French production companies were responsible for the 167 films produced andinitiated by the French in 2004. As in 2003, Gemini Films remained the mostfrequent producer with seven films at an average budget of Euros 2.41m.

Both LucBesson's EuropaCorp and his former studio of choice, Gaumont, produced sixfilms each. The former had an average budget of Euros 16.64m while the latterspent an average Euros 9.48m. Other prolific production outfits includeddirector Robert Guediguian's Agat Films, Why Not Productions and MandarinFilms.

Contrary tothe perception that is scaling back its investments in film, Canal Plusactually increased its spend. Pre-buys amounted to a total of Euros 137m versusEuros 129m in 2003.

Competitor TPSalso upped its investments in local films by spending Euros 32m in 2004 compared to Euros 22m in 2003. Thetotal number of films the company invested in was 44 in 2004 versus 16 in 2003.