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Canal Plus looks to pay less

Gallic paybox looks to cut cost of deals by 30%

PARIS — Canal Plus, soon to be France’s sole pay TV operator, is apparently bidding to slash the cost of its output deals with the Hollywood majors by 30%.

The Gallic paybox refused to comment Monday on a French press report that it wants to save some E100 million ($133 million) annually on the $467 million that, between them, Canal Plus and its takeover target TPS spend each year on Hollywood product.

Canal Plus is due to gobble up TPS in a merger that in coming weeks will create a Gallic pay TV giant with some 8 million subscribers.

Sources at Canal Plus confirmed that toppers were mulling the economics of various deals, which because of competition in the French market saw sharp inflation the last go round despite the poorer performance of U.S. films on television in France.

To nab Warner Bros. product from Canal Plus in 2004, TPS paid in excess of $40 million — an amount deemed excessive by the major’s traditional partner in France.

But the price hike forced up the cost of subsequent deals Canal Plus struck with Sony and Fox — hence the current rethink.

That, coupled with the lackluster TV performance of most Hollywood films, has fueled Canal Plus’ new effort.

“Teen-orientated Hollywood films that do well at the box office are targeting 15- to 28-year-olds who go to the cinema but watch less television,” observed an insider.

On terrestrial TV in France this year, only one Hollywood movie, “Pirates of the Caribbean: The Curse of the Black Pearl,” made it into the top 20 most-watched programs, coming in at No. 16 with 11.4 million viewers.

Sean Connery-Nicolas Cage starrer “The Rock” was the next best performing U.S. film in 37th place with 10.2 million viewers.

The only movies up there at the top of the ratings were French comedies, with ancient repeats “Les Bronzes font du ski” and “Les Bronzes,” seen on the Gallic box many times over, managing to snag 10th and 11th place.

In the current round of negotiations, Disney’s deal is the first due for renewal, in 2007, followed by Warner Bros. in 2008; MGM in 2009; Sony, Paramount and DreamWorks in 2010; and Fox and Universal in 2012, according to a timetable published by daily Le Figaro on Monday.

While Warner titles have performed well at the Gallic box office — B.O. perf is another factor influencing the value of TV deals — the others could all see their deals in France renegotiated, the paper asserted.

In some respects, a renegotiation of deals was to be expected.

Whenever two satellite platforms have merged, effectively eliminating competition for rights, the resulting monopoly player has been able to negotiate prices downward.

It happened 15 years ago when rival satcasters BSB and Sky merged in the U.K. to form BSkyB: Prices were slashed with the majors as each renewal deal came up.

It also happened in Germany, Italy and Spain in the wake of platform mergers or financial problems connected to slow subscriber takeup.

The Canal Plus attempt to lower prices can also be seen as part of a more general disappointment with Hollywood movies on the small screen abroad. While the top U.S. drama series are commanding steep per-episode prices, movies on TV have not been pulling in huge auds. Foreign broadcasters are thus growing reluctant to pay big bucks except for blockbusters like the “Spider-Man” or “Harry Potter” pics.

(Elizabeth Guider in Hollywood contributed to this report.)