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FT-Orange rethinks contents biz

Chief exec mulls exit from pay TV sector

In a major rethink of its content strategy, giant Gallic telecom FT-Orange is looking for a buyer for its pay TV channels Orange Sports and Orange Cinema Series.

Presenting a five-year growth plan for FT-Orange on Monday, new CEO Stephane Richard declared he would give FT-Orange “a few weeks” to court majority partners for the services.

Newspaper reports claim FT-Orange is in conversations with an eclectic mix of potential buyers, including News Corp. and France’s Professional Football League.

Richard added FT-Telecom would be prepared to remain a minority partner in the services.

“FT-Orange is looking for an exit strategy” from the content business, said Francois Godard, at Enders Analysis. “It’s just postponing the hard decision.”

In one of the biggest recent plays for content by a European telecom, FT-Orange created waves at Mip TV in March 2008 by announcing exclusive multiyear deals with Warner Bros. Intl. Television Distribution, HBO and a clutch of Gallic players for a new premium pay TV service, Orange Cinema Series. Deals with MGM, Lionsgate and the BBC followed.

The same year, FT-Orange launched Orange Sports, playing off its purchase of mobile and TV rights to French soccer league soccer games, including broadcast rights to the key Saturday night fixture.

Orange entered the entertainment biz principally to enhance its market share in triple play — fixed telephony, Internet and TV.

For Orange Sports, the economics and loss-leader strategy haven’t worked out.

FT-Orange pays €203 million ($254.4 million) a year for soccer rights on a contract that is due to end summer 2012. Orange Sports has around 400,000 subscribers, about the same number as Orange Cinema Series, which is thought to pay far less — around $65 million a year — for film and series rights.

“You could imagine an international player deciding to buy into OCS thinking that its value resides in a small subscriber base and Orange distribution, repping a foothold in the French market,” Godard said.

Richard called the channels’ tally of subscribers a remarkable performance, given that Orange’s IPTV subscriber base is only 2.7 million.

Orange’s share of total net French broadband additions has shrunk from 48% in 2007 to 31% in 2009, Godard said.

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