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Territory report: France

Talk of satellite TV alliance a Gallic first

PARIS — The giant three-way merger of French pay TV group Canal Plus, Vivendi and Universal parent company Seagram set the ball rolling: Now, the arrival in France next year of a third digital platform, digital terrestrial TV, and fears of its destabilizing effect on Gallic television, have once again turned Gallic small-screen operators’ thoughts to mergers.

For a half-decade, market leader CanalSatellite, and smaller rival TPS, have slugged it out in a subscriber war that has cost both dearly.

Then suddenly in September, Denis Olivennes, chief operating officer of the Canal Plus Group, made the casual remark that it would be “logical” for France to have a single satellite platform, like most other Euro countries. In its efforts to rationalize international operations, the group already has announced mergers with rival satcasters in Italy and Poland.

There are many obstacles on the way to a French satellite TV merger. But that Canal Plus Group, which owns 70% of CanalSatellite, and TPS shareholders (private webs TF1 and M6, utilities group Suez France Telecom, and pubcaster France Television) are even contemplating such a move is a sign of changing times.

In France, where Canal Plus pioneered it, pay TV is reaching a subscriber plateau. Canal Plus’ premium channel boasts 4.6 million subscribers but with a 10%-11% cancellation rate, and expects to soon lose as many clients as it gains.

Meanwhile at CanalSatellite, with 1.67 million subs, and TPS, with 1.04 million, rates of new subscriptions are also slowing down.

The TPS shareholders’ terrestrial channels are also suffering from a current ad slump. Investors, fast losing faith in their future prospects, punished both TF1 and M6 last month in the Paris stock market, where TF1’s share price plunged 18% and M6’s 11% in a single day.

With France due to receive 36 digital terrestrial channels with the introduction of DTT at the end of next year, the reasons are piling up for French TV operators to start playing ball with one another.

France
TV homes:22.2 million

Cable homes:3 million

Satellite homes:2.7 million

Local programming:40% (quota)

Top show:TF1 drama “Julie Lescaut” (49% share)

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