"The cinema is the primary reason for subscriptions to our channel, and customer loyalty to us comes through the cinema," Canal Plus prexy Bertrand Meheut said Monday during a news conference.

Pact, to be signed at the Cannes Film Festival, which begins today, will go into effect Jan. 1. Canal Plus will invest 17% of its French acquisitions fund in films with a budget of less than e4 million ($4.7 million).

The agreement with lobby groups the BLIC, which reps Gallic majors; the BLOC, an org for indies; and ARP, the writers, directors and producers org, is intended to promote diversity in French cinema.

Under a previous accord, Canal Plus put 45% of its budget into films with a pricetag of $6.8 million. Critics of the old pact complained that pics just over $6.8 million were undervaluing their budgets to ink cash deals with the entertainment group, while smaller films were inflating their budgets.

The industry judges films under $4.7 million as the hardest to finance, and lowering the bar will make it harder for pics to undervalue their pricetag.

The group will continue to devote 12% of its revs to acquiring Euro pics, 9% of which will go to buying French titles. To boost production, Canal said it will fulfill 80% of those obligations to French movies through pre-buys.

Canal Plus also renewed its financial aid commitment to distribs and exhibs, which last year reached $20 million.

In a win for the group, Canal Plus was granted the right to show films Wednesday and Saturday nights, as long as their theatrical release had not exceeded 1.2 million admissions.

Movies were previously not allowed to run on TV Wednesday nights, when films open here, and Saturday nights to protect receipts for distribs and exhibs.