Gaumont SA History

Address:

30, avenue Charles de Gaulle
92522 Neuilly-Sur-Seine CEDEX
France

Telephone: (33) 1.46.43.20.00
Fax: (33) 1.47.38.12.18

Public Company
Incorporated: 1895 as Société Léon Gaumont et Cie
Employees: 900
Sales: FFr 1.908 billion (US $329 million) (1997)
Stock Exchanges: Paris
SICs: 7812 Motion Picture & Video Production; 7832 Motion Picture Theaters Except Drive-In

Company History:

With one of the most illustrious names in motion picture history, Gaumont SA has developed into one of Europe's leading motion picture production and distribution houses. Gaumont's activities are grouped under three principal divisions: the production of films (Film and Television) and their distribution (Circuit) both worldwide and through the exploitation of the company's France-based network of multiplex cinemas.

Through its Circuit division, Gaumont owns and operates more than 300 cinemas--almost all multiplex--throughout France, as well as, to a more limited extent, in Belgium (Antwerp), Switzerland (Geneva), and the United States (New York). Many Gaumont theaters feature at least one so-called "Grand Ecran," that is, a screen measuring at least 14 meters (45.5 feet) tall and reaching proportions of 24 by 10 meters (78 by 32.5 feet). All new Gaumont theaters and all recently renovated Gaumont theaters feature a Grand Ecran. In addition, Gaumont has an exclusive agreement to operate Imax theaters in France. Legislation adopted by the French government in 1996 limiting the development of multiplex theaters has encouraged Gaumont to look beyond France for future growth. In 1997 the company opened or acquired theaters in Geneva and Antwerp; the company also has developed a partnership with the Czech Republic's Bonton to extend its distribution activities to that country and neighboring Slovakia. In addition to operating cinemas, Gaumont acts as a worldwide distributor for its own and other films, including, through subsidiary Gaumont Buena Vista, certain Walt Disney Company productions. The company also distributes its catalog (both archives and new productions) to television.

Typically, the company's Circuit activities represent the largest part of its revenues--in 1997 that division generated FFr 797 million of the company's total FFr 1.9 billion in sales. Yet, in 1997, revenues from the company's Film division topped its distribution revenues for the first time, more than doubling over the previous year to reach FFr 914 million. The motor for this growth was the international success of Luc Besson's The Fifth Element (Le Cinqième Elément), the most expensive production ever made by a European production house. That film marked a turning point of sorts for Gaumont: while the company continues to produce French-language films and television programs, it has adopted a strategy of increasing the number of its English-language productions, with the view of competing with the Hollywood giants on the international scene. In its production catalog the company also includes such internationally seen television programs as "The Highlander." Gaumont also has entered the multimedia arena, producing computer and video games based on its film titles.

Pioneers of Film at the Turn of the Century

A brilliant engineering student, Léon Gaumont was forced nonetheless to leave school at the age of 16 when his father was unable to continue to pay his tuition. Gaumont apprenticed to a maker of binoculars, while continuing to study in the evenings. At the age of 28, Gaumont became the director of the Comptoir Général de la Photographie, a maker of optical and photographic equipment. A dispute among the owners of the company gave Gaumont the opportunity to buy the company and its equipment in 1895. Gaumont renamed the company Léon Gaumont et Cie.

At first producing equipment for still photography, Gaumont was quick to recognize the potential of the Cinématographe, introduced by the Lumière brothers in 1895 and inaugurating the era of motion pictures. Gaumont began working on his own motion picture camera; the following year the company brought out the Chrono. To sell the camera, Gaumont needed a means to demonstrate its usefulness. Film production was added quickly to the Gaumont enterprise and would establish the company worldwide as a leading manufacturer and production house. Yet Gaumont's primary interest lay in his company's technical--not artistic--development. Much of the company's film production activity was placed in the hands of Gaumont's secretary, Alice Guy, with the agreement that her film work would not interrupt her other duties. Guy became the first female director and one of the originators of the scenario-based film.

Between Gaumont's cameras and Guy's films, the Gaumont name became one of the most important in the turn-of-the-century film industry. The decision by the Lumière brothers to stop production of films in 1900 provided a new boost to Gaumont. With the American film industry still in its infancy, primarily based in New York, Gaumont became a principal supplier of moving pictures. Its chief competitor was another French firm, Pathé. Although much of the company's film work took place in natural settings, the company soon opened its first studio, the Théâtre Cinématographique in Buttes-Chaumont, in 1905. Gaumont also became among the first studios to offer multifilm contracts to its directors and actors. By 1912 the company began adding the names of actors to its publicity, as the cinema began to produce its first stars.

By 1904 the company's revenues had grown to 900,000 francs. The expansion of Gaumont's activities called for increased capital. Already associated with La Banque Suisse et Fran&ccedilse (later, the Crédit Commercial de France) and with industrialist investors including Gustave Eiffel, Gaumont reorganized the company in 1906. Now known as Société des Etablissements Gaumont, the company's capital was raised to 2.5 million francs. A year later the company raised its capital base to three million francs.

For the first decade of the new century, Gaumont remained a manufacturer of cinema equipment and a producer of films. Distribution was added in 1910, following the move made two years earlier by Charles Pathé. Whereas films had previously been sold outright to the rising numbers of cinema operators, Pathé had introduced the concept of distributorships, renting films instead of selling them. Gaumont founded its own distributor group, called the Comptoir Ciné-location, which soon began exploiting cinemas as well. Owning the cinemas provided Gaumont not only with a means to distribute its films, but also the profits from the vast audiences flocking to the new entertainment form. At the time, most cinema houses in France had been converted from former theaters and vaudeville houses. Gaumont took the cinema concept a step further, converting the Hippodrome, a structure built for the 1900 Paris Expo, into the Gaumont-Palace. Opened in 1911, the Palace was the world's largest cinema, with 3,400 seats, setting a new standard for cinema comfort and opulence.

In the years leading to the First World War, the company constructed a second studio in Nice, taking advantage of that region's natural light and mild climate. In Paris, meanwhile, the company had continued to expand its operations, building a complex of workshops, studios, and processing laboratories that became known as the Cité Elge (the pronunciation of Gaumont's initials) and eventually would cover some 25,000 square meters. Gaumont recorded a film first, with the presentation of the world's first animated film, Fantasmagorie, in 1908. The company soon launched its own string of serial films, including the famous Fantomas series directed by Louis Feuillade, who had succeeded Alice Guy in 1907. In 1910 Gaumont also began producing a cinema magazine, Gaumont Actualités, the forerunner to the newsreel. By 1914, with revenues of some three million francs per year, Gaumont neared full vertical integration, not only producing film cameras and projectors, but developing and processing film, operating studios, and building its own decors and storehouses for its sets, props, and costumes. The company also had established a worldwide presence, with offices, agencies, and studios in cities including New York, London, Moscow, Vienna, Budapest, Calcutta, Saigon, Barcelona, Casablanca, Buenos Aires, Montreal, and elsewhere. Gaumont had become one of the world's foremost providers of motion pictures and equipment, with production reaching as high as 145 films per year.

World War Setbacks

The consequences of the First World War were dramatic for the French and European film industry and for Gaumont. Not only did Gaumont lose as much as 15 percent of its work force to wartime casualties, but the war had disrupted its international distribution. Emerging from the war, the film industry had undergone a drastic change: Hollywood had begun to conquer the worldwide motion picture scene. Meanwhile, the loss of Gaumont's Axis audiences extended beyond the war years; even among allied countries, the rise of national film industries throughout Europe during the war years resulted in the end of their dependence on the French filmmakers for product. Although the company had continued to produce films during the war, the loss of the company's international market forced Gaumont to cut back severely on production. In 1919 its total production was a mere 11 films.

Gaumont began losing money, forcing it to turn to its investors. By 1921 its capital investment had reached ten million francs. The company soon passed under the control of the Crédit Commercial. Although Léon Gaumont remained at the head of the company until 1932, the bank imposed its own members on the company's direction, eventually taking over Gaumont's operations entirely. The company attempted to shore up its position by forming strategic distribution partnerships with international film producers, including Italy's UCI, Sweden's Svenska, and the United States' Metro Goldwyn. The company also reopened many of its foreign agencies and offices. But there was little the company could do against the enormous success of Hollywood. By 1925 Gaumont's production had fallen to just three films, competing against as many as 400 Hollywood imports, which combined to account for more than 80 percent of the French box office. In that year Gaumont took the drastic step of abandoning nearly all of its film production efforts.

Gaumont fared little better on the technical side. The film industry was turning to so-called talking pictures, which required a new generation of film recording and projection equipment. Gaumont developed its own version of sound equipment, succeeding in outfitting a strong percentage of France's cinemas with its designs. To impose the Gaumont equipment on the cinema circuit, the company began forming alliances, merging with other cinema network operators to form Gaumont-Franco-Film-Aubert in 1930. The company also began looking to acquire other French cinema equipment manufacturers, including Constinsouza. But the technical progress made by the company's American and German competitors proved to be too much competition for Gaumont.

In 1932, Gaumont, under a new director, Paul Keim, ended its film and projection equipment manufacturing activities. The company again closed down its foreign branches; also shut down were its costly Paris and Nice film studios. At the same time, Gaumont took steps to bring its distribution network under centralized control, taking over programming for its theater network. Although the company had stepped up film production in that year, to nine films, its debt was growing even faster. Exacerbated by the Depression, Gaumont's debt would reach some 320 million francs by mid-decade. Finally, in 1935, the company declared bankruptcy. Its only consolation was that its chief French rival, Pathé, had declared bankruptcy several months before.

By 1937 Gaumont suspended all operations but its distribution and theater circuit. In 1938, however, the company found a new owner, the French media giant Havas. Renamed the Société Nouvelle des Etablissements Gaumont, the company was placed under charge of Alain Poiré, grandson of Havas President Léon Rénier. Under Poiré, Gaumont would regain much of its international renown.

Gaumont was aided, paradoxically, by the German occupation of France during World War II. With British and, soon, American film imports banned, French filmmakers once again took a central place at the box office. Yet the uplift was short-lived. By the end of the war, with the French and European economies in ruins, with large numbers of the French theater circuit destroyed by bombs, and with a shortage of both film stock and personnel, Gaumont was forced to suspend production again. Meanwhile, the Hollywood invasion had returned in force.

Postwar Allure

Production resumed in 1947, inaugurating a period of renewed success for the French cinema. In the early 1950s Gaumont discovered a novel method of competing against the American film juggernaut. The 1953 film, Caroline Chérie, had proved a great success for Gaumont, paying back its production costs within months. The reason for the film's success was its willingness to portray nudity, a feature the American film industry, under tight and puritanical censor, was forbidden to exploit. The success of the film sparked a series of sequels and made its lead actress, Martine Carol, a star.

At the same time, Gaumont was pursuing another strategy, that of buying up many of France's cinemas and renovating all of its theaters to provide a new level of comfort to the audience. These audiences also were treated to a new era of filmmakers and their films that would place France once again at the pinnacle of international film. The French New Wave cinema, including directors such as François Truffaut, Alain Resnais, Jean-Luc Godard, and Claude Chabrol, gave new allure to Gaumont and the country's film industry. In the early 1960s, with the creation of subsidiary Gaumont International, the company began engaging in coproduction activities with Italian producers, where such directors as Fellini, Antonioni, and Pasolini were making their marks on world cinema.

In the mid-1960s Gaumont formed a distribution alliance with rival Pathé, giving the two companies a network of 150 theaters, for a total of 120,000 seats, and a virtual monopoly on the French cinema industry. The alliance would last nearly 20 years, until it was broken by French government intervention. In the late 1960s and early 1970s the company began installing automatic projection booths, and then began converting its theaters into a new multiplex concept, which, giving a greater programming flexibility, proved a hit with audiences. During the 1970s Gaumont's production arm would have a string of successes, including the Tall Blonde Man series.

In 1975 a new director arrived at Gaumont. Through share purchases, Nicolas Seydoux, grandson of industrial leader Marcel Schlumberger and brother of later Pathé owner Jérôme Seydoux, had succeeded in gaining control of the company. Under Seydoux and his CEO Daniel Toscan du Plantier, the company, renamed simply Gaumont, began an ambitious expansion program. Apart from forming distribution alliances, among others, with the United States' Fox, Seydoux and Toscan moved to expand Gaumont's operations internationally by opening production and distribution subsidiaries in Brazil and Italy, forming Gaumont Inc. in the United States, founding Triumph Films in a partnership with Columbia, opening two Gaumont-owned theaters in New York City, and taking a 50 percent share of Téléfrance, a cable channel meant to bring French-language programming to U.S. audiences. Beyond film, the company sought to expand into publishing, purchasing Editions Ramsay and the weekly magazine Le Point.

Retreat and Rebuilding in the 1980s and 1990s

The ambitions of these plans proved too much for Gaumont. By the early 1980s, with losses of FFr 245 million on revenues of FFr 1.3 billion, the company was forced to abandon many of its new projects, closing down its Italian and Brazilian subsidiaries and its U.S. cable venture. The company later would sell off its money-losing publishing activities as well. Gaumont regrouped around its distribution and network and its production activities. The latter found a new market in the opening of the French television system to private broadcasters in the mid-1980s. The new competition not only produced a greater demand for programming, but also boosted prices. Gaumont now extended its production activities to include programs and films for television, while finding a ready market for its vast archives of films and film footage.

The inauguration of a new theater concept--that of the giant screen--would help revive the dwindling cinema audiences. In the 1990s Gaumont would begin incorporating giant screens into each of its new and renovated multiplexes--which themselves were reaching as many as 15 theaters. A series of hits also would provide a boost to the company, including the international success of Luc Besson's The Big Blue and the 1993 smash hit, Les Visiteurs, which set a French audience record of 14 million tickets sold. In the mid-1990s Gaumont would take a new risk, producing for a record European budget of FFr 500 million another Luc Besson feature, The Fifth Element. The production capped a developing Gaumont strategy of returning to the international production stage. Filmed in English and released in 1997, The Fifth Element would prove a resounding success worldwide. That film alone was enough to double the company's cinema revenues for the year, pushing its sales to nearly FFr 2 billion.

The company opened 1998 with a new hit on its hands, Les Visiteurs II, affirming the company's commitment to French-language production, even as it pursued its English-language aims. While Hollywood continued to dominate the world's cinemas, Gaumont seemed ready to reassert its position as a major player in the international film scene.

Gaumont SA History

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