France’s Canal Plus Group Targets Africa as Growth Driver

Gallic pay-TV giant strengthens African service with four-channel sports bouquet, including UEFA Champions League soccer

Targeting its main growth driver for the short-to-medium-term future, Gallic pay TV giant Canal Plus Group (CPG) is driving ever deeper into Africa, launching a four-channel sports bouquet, Canal Plus Sport, for the continent, with the crème of French and international events.

Up-and-running from July 21, Canal Plus Sport will offer “numerous new sports rights acquisitions,” Canal Plus Group said in a statement Tuesday.

Announced highlights take in the UEFA Champions League and UEFA Europa League, Europe’s biggest soccer club tourneys, the Euro 2016 national side competition and Latin America’s Copa America. Other major sport lures are NBA basketball games, Diamond League athletics, rugby, Roland Garros and Wimbledon tennis tournaments, Formula 1 racing, and sports magazines.

In a parallel move, Canal Plus has effected a “highly important editorial strengthening” of its movies and original series lineups, offering 600 new movies a year, most in first-run exclusivity; event series; Canal Plus Original Productions; and five new skeins a month on Les Chaines Canal Plus. The French paybox is also raising its number of African event transmissions.

The Canal Plus Sport launch is just the latest step in a continent of strategic growth interest for CPG.

“The future growth story of Canal Plus will be in Africa. Africa is already profitable for Canal Plus, and one reason is Vincent Bollore is interested in it. More than 20% of Bollore Group sales come from Africa. He knows the African market very well,” said Jean-Baptiste Sergeant, at European broker MainFirst, citing past African growth thrusts at CPG.

Last October, Canal Plus Group launched A Plus, a new premium pan-African entertainment channel. This March, it added 25 new channels to its offer in Africa, including Novela TV, a telenovela channel, upscale urban service Edan, and youth channel Gulli Africa.

CPG subscribers in Africa have doubled from 700,000 subscribers in early 2012 to 1.5 million in 2014, with CPG is aiming for 5 million clients in the long term, Sergeant said, reckoning CPG will hit 4 million by 2018.

Canal Plus has 5.6 million subscribers in France.

Bolstered by the growth of an African urban middle class, Average Revenue Per User (ARPU) is a not insignificant €18 ($19.5) in Africa.

Canal Plus Group needs Africa. Its domestic market in France is showing signs of clear maturity. Canal Plus sales in France dropped almost 3% last year and profit 9%.

“In 2015, CPG will organically grow revenues 1.7%. In terms of reported revenue, I expect +3.6% for CPG, including a fall of 1.2% for pay-TV in France and a 15.7% rise for international,” Sergeant said.

Over 2015-17, CPG profit margins on organic biz might edge down from 10.7% in 2014 to 10.5% in 2015, dented by sports rights inflation in France, he added.

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