TF1 Group CEO Gilles Pelisson Has an Ambitious Plan for the Future

Since taking the reins a little over a year ago, TF1 Group chairman and CEO Gilles Pélisson has implemented an ambitious digital transformation strategy.

His aim: widen the group’s international presence, restructuring it as a multi-channel content marketplace, with reinforced branding and stronger appeal to key audience segments, including women and millennials.

The 59-year-old Pélisson, whose TF1 is the recipient of this year’s Variety Achievement in Intl. TV Award, is the nephew of MIT-educated Gerard Pélisson, co-founder of the Accor international hotel chain; Gilles has assumed key management positions within the Accor group, including CEO between 2006 and 2010.

Following his Harvard Business School MBA, Gilles Pélisson worked for six years in the U.S. and then put in seven years as deputy CEO and CEO at Euro Disney in Paris between 1993 and 2000. More recently, he advised U.S. investment bank Jefferies and is currently a board member of consultancy firm Accenture.

“U.S. business culture has taught me to be curious to discover new things and to be very open-minded,” he says. “I love to test and learn. I like the no-bulls— attitude and the drive to be efficient.”

The other key strand of Pélisson’s career is his long-term professional relationship with Martin Bouygues, CEO of the Bouygues Group, TF1 Group’s biggest shareholder, dating back to his time as CCO and CEO of Bouygues Telecom between 2001 and 2006.

“There’s a lot of trust,” Pélisson says. “That’s important to chart a medium to long-term strategy.”

Pélisson is only the third CEO of the TF1 Group, since it was privatized in 1987. He was a non-executive board member at the group from 2009 onward, and his immediate predecessor, Nonce Paolini, worked as his deputy at Bouygues Telecom.

The TF1 Group is Europe’s leading private broadcasting group with a combined audience share of 32.1% in 2016 for its five free-to-air channels, and a 6.4 point lead between TF1 and its nearest rival, M6.

When Pélisson was appointed CEO in February 2016, the group faced important challenges, including the need to improve its current operating margin, which at 6.3% was lower than commercial rivals such as M6 in 2016.

The group’s results have been undermined by audience fragmentation, caused by the launch of digital terrestrial television in 2005. That forced the group to acquire four free-to-air channels and launch digital initiatives, including replay TV and VOD platform, MyTF1.

Gilles Pélisson is the third CEO of TF1 Group since the network was privatized in 1987, and has been on the job since Feb. 2016.
Francois Berthier for Variety

Pélisson aims to improve the group’s operating margin by a mixture of cost savings and revenue increases, in particular through better monetization of advertising, launch of digital services and reinforced content production.

He believes that monetization can be improved by delivering a more targeted service to advertisers, in part through building a clearer brand identity for each channel.

“The key idea since I joined TF1 as chairman is how can we make the most of the fact that we’re a multi-channel group, with TF1 as our flagship channel. You can develop personality for each channel and each brand, by nourishing them with strong animators, unique content and regular daily slots that viewers can relate to.”

“Our flagship channel, TF1, is our key reference,” says Ara Aprikian, executive VP for content. “We want to maintain its power. It’s an unusual phenomenon in Europe given its high ratings and the distance between it and its nearest commercial competitor, M6. But we need to adapt its economic approach, especially in terms of scheduling.”

Clearer targets have been set for the group’s other free-to-air channels: TMC, which focuses on entertainment, and LC1 for news, both targeted at 25- to 49-year-olds; HD1 for drama, targeted at women ages 35-50; and NT1, targeted at millennials, ages 15-35.

These new positionings have helped boost the channels’ ratings by 28% in the fourth quarter of 2016.

Pélisson also aims to capitalize on peak viewing figures for TF1’s news bulletins, at 1 and 8 p.m., by scheduling shorter programs near these slots, with commercial breaks. This includes a preview slot of TMC’s popular chat show, “Quotidien,” hosted by Yann Barthes, and daily editions of game show “The Wall,” which bowed in March.

“We have reinforced our credibility with advertisers and rights holders,” Aprikian says. “They understand that we have a new, fast-moving strategy and a modern approach. We’re willing to take risks and have shown we’re open to new partnerships.”

The group also aims to maximize synergies between channels, including potential cost savings in areas such as news production and rotation of content across channels.

“If we ran a miniseries on TF1, which generated an audience of 6 million to 7 million, we can play the same episodes on the next night on our channel HD1, with an additional audience of around 500,000,” says Pélisson.

Cable TV is another priority: “One of our ideas is that carriage fees are not currently paid by cable operators in France to free-to-air channels, contrary to most of the world,” he says. “We have introduced this as a new area of discussion. We want to change our business model, introducing new services for viewers.”

Pélisson says that his overall goal is to be the No. 1 content marketplace in France, which will enable brands to extend their reach beyond TV screens.

This motivated the acquisition of one of France’s most successful social-media outlets, MinuteBuzz, in late 2016 and a partnership with German broadcaster ProSieben in the multi-channel network Studio 71, also involving Italy’s Mediaset.

“We’ve taken a small stake worldwide in Studio 71, which is very strong in Germany, Europe and America, with strong ties in Hollywood,” says Pélisson.

Several group shows, such as TMC’s “Quotidien” and reality series such as “Secret Story” and “La Villa des coeurs brisés,” have built strong internet communities, especially among younger women and teenagers. “It’s very important that we cover the entire audience spectrum and appeal to millennials,” says Pélisson.

In addition to improving TF1’s monetization and digital presence, the other key pillar of Pélisson’s strategy is to increase the group’s content creation capacity, in France and abroad.
“At Disney I learned the importance of the brand, of never forgetting the ‘wow effect’ and the critical importance of protecting a brand, of knowing whether you have characters and intellectual property that you can exploit,” Pélisson says.

“France is one of the few countries, where although broadcasters are obliged to invest in IP, we don’t own it at the end. This can be highly frustrating. So one of our core ideas is to become a major producer of IP.”

Film production has been streamlined under the new unit, TF1 Studio, launched in the second half of 2016. A second unit, TF1 Entertainment, oversees activities in music, live shows, licenses, games/toys and collections.

In terms of music publishing, the group has contracted artists such as popular French singer and songwriter Matt Pokora, and acquired a minority stake in Play Two, a new independent music producer. The group will soon open an ambitious music venue, La Seine Musical, integrated within the Hauts-de-Seine Valley of Culture project.

Another key pillar of the content creation strategy is the acquisition of 70% of French production group Newen, responsible for Netflix’s first French series, “Marseille,” and Canal Plus’ English-language hit “Versailles.” This acquisition played a key role in the 46% boost in revenues from the group’s Studios and Entertainment activities in its 2016 consolidated results.
“Newen is definitely a new leg in terms of our business operations,” Pélisson says. “We want to be a player in terms of content production and build up smaller acquisitions to give us a European dimension, which started with the acquisition of Dutch producer Tuvalu and opening an office in London.”

TF1’s acquisition of Newen nonetheless sent shockwaves through the French media industry that was potentially destabilizing for Newen — since it generates less than 10% of its turnover from the TF1 Group. Both TF1 and Newen are keen to emphasize their commitment to maintaining strictly independent operations.

“One of the things I learned at Disney was that if you want to retain strong creative people you have to make sure that they can think freely and have enough autonomy that they can really express themselves, and that the sky’s the limit,” says Pélisson. “We want to capitalize on Newen’s track record and relationships. We really want to protect that independence and not affiliate them too strongly with TF1.”

The “trinity agreement” — a co-production pact signed among TF1, NBCUniversal and RTL Germany — whose first project is the procedural drama “Gone,” further reinforces the group’s content creation strategy.

Pélisson highlights the importance of TF1’s long relationship with the key Hollywood studios and says that one of the first things he did as CEO was to go to L.A. for meetings. He plans to return in May.

“Our game plan in terms of programming is to mix U.S. content and European and French content,” Pélisson says, citing the example of TF1’s deal with Netflix when the latter launched “Marseille.” TF1 broadcast the first two episodes on primetime as part of a deal to broadcast all of season one in advance of the season two return.

“We want to make the TF1 Group more international,” says Pélisson. “That’s the driving force behind our support for Newen’s European expansion and the reason why we have invested in Studio 71. We want to be associated with the best in the class.

“The U.S. studios are key for us. Both the established studios and new players like Netflix and Amazon. We think that working with them helps us build value. We aim to be at the crossroads of all these possibilities.”

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