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Dented by its eroding French pay-TV business, profitability at Canal Plus Group (CPG), Europe’s second biggest pay TV operator, will continue to decline until new investments returns – from content and set-top box investment – kick in, suggests new report from London-based Enders Analysis.

Canal Plus management suggested a €2 billion ($2.2 billion) investment in content and customer premises equipment at an employee get-together last month.

Published Friday, “Canal Plus: Things Will Get Worse Before They Get Better” also sketches other challenges, such as “corporatist regulation,” which hampers original series production, an increasingly competitive sports right market and, crucially, the probably declining appeal of Canal Plus’ legacy, film-skewed premium content offer.

Outlined by the report, headwinds underscore the big ask ahead for Gerald-Brice Viret, tapped as Canal Plus new managing director of channels in an appointment made official last week. Viret was channels head at French media-TV conglom Lagardere from 2013, where he helped power a ratings turn-around at kids channel Gulli. Lagardere’s channel-spread is small fry, however, compared to Canal Plus’ where overseas uptake has served to offset the revenues decline at domestic operations. But Virel faces a tough call to stem erosion at Canal Plus’ core French business.

Per analyst François Godard, at Enders Analysis, French subscriber count to Canal Plus, pay-TV premium service, and CanalSat, its multichannel offer, have probably fallen by as much as 900,00 since 2008. (Vivendi gives figures of 6.117 million subscribers for 2012, 5.926 million for first nine months of 2015, but that includes clients to CanalPlay, paybox’s SVOD services, which costs just €7-€9 ($7-$9) a month.

“The persistently high churn rate, now at 14.9% on a 12-month rolling basis, is testament to French fatigue at Canal Plus and CanalSat,” the report reads.

Why? The report concurs with a shift in consumer interests that is now a major preoccupation for movie industries across the world. Godard’s solution would send a frisson down the spine of the French film industry.

“The attractiveness of scripted content has also suffered with a shift in public taste from film to series,” he writes.

“Canal Plus invests enormously in original content, but a byzantine regulatory regime forces it to spend most on domestic film production, which it has no right to control editorially. A much smaller budget is devoted to original series and this output remains far too low to put them at the core of the consumer value proposition.”

Gallic pay TV revenues dropped 2%, Jan.-September 2015, vs. same period in 2014, from €2.592 billion ($2.846 billion) to €2.541 billion ($2.790 billion).

Operating profits at CPG “have been declining continually since a 2012 peak,” EBITDA down 7% in 2014 and another 7% over the first nine months of 2015 to €748 million ($821 million).

Enders Analysis’ Godard does, however, highlight two “bright spots” in CPG’s performance. One is its overseas pay TV biz growth, mostly attributable to Africa, where subs have risen from 706,000 year-end 2012 to 1.744 million on Sept. 30, another Studiocanal, “which delivered steady 13% growth in revenues in both 2014 and the first nine months of 2015.”

Thanks to Africa, total CPG revenues at least edged up 1.8% year-on-year to €4.0 billion $4.430 billion), Jan-Sept. 2015

Under Olivier Courson, former chairman-CEO, pink-slipped in September, Studiocanal “has built a dynamic network of subsidiaries around Europe, Australia and New Zealand. Initially focused on films, Studiocanal is increasingly committed to TV series, notably through the U.K.’s Red Production,” the report reads. €297 million ($326 million), Jan.-Sept. 2014, Studiocanal revenues rose to €336 million ($369 million), same period 2015.