PARIS — France Telecom’s Orange is negotiating satellite carriage for new TV channels in France, according to French financial daily Les Echos.
The talks suggest that Orange is exploring avenues to launch a full-scale challenge to Canal Plus Group’s lock on France’s lucrative pay TV market.
Orange responded this week to a French Soccer League tender, bidding for all 12 league rights packages over the 2008-12 seasons.
Canal Plus has bid for 10 packages. Mobile phone operator SFR, owned by Canal Plus parent Vivendi, has applied for mobile phone and video on demand packages.
Candidates have until Jan. 31 to attach figures to their proposals.
Les Echos claims Orange has reserved channel carriage on SES Astra and Eutelsat, Europe’s two major satellite systems.
The satellite launch is essential to expand Orange’s current Internet TV offer. It has one million subscribers but limited bandwidth impedes nationwide penetration.
Orange currently sub-distributes Canal Plus soccer on Internet and it also co-produces films, such as Michelle Houellebecq’s upcoming “Possibility of an Island.” More exclusive movie content would be useful for Orange. It could also twin video on demand on its Internet TV service with satellite TV.
The largest challenges for Orange is not just tying down rights, but also recouping on investment by powering a satellite subscriber base. For that it needs soccer, arguably on an exclusive basis.
A national brand, Canal Plus boasted 5.2 million premium subscribers last fall.
“The challenge is how to invest several hundreds of millions of Euros per season to build a sports content business from scratch that could only be monetized by pay customers, which Canal Plus France currently has a lock on,” said Paul Reynolds, at Deutsche Bank.