Orange keeps majority control of French pay TV channels

By
Tim Westcott

July 15, 2011

France Telecom and Canal Plus have finalised the strategic premium film channel partnership, first revealed in January, covering the Orange-brand film channels. Under the revised deal, the telco will retain a majority 66.6 per cent stake in the venture, with Canal Plus holding the remaining 33.3 per cent. All five Orange-branded film channels will remain. The initial plan was for Canal Plus's TPS Star to be rebranded as Cine Star; however for the moment, the TPS Star brand remains in place.

The five Orange Cinema Series channels (Orange cinémax, Orange cinéhappy, Orange cinénovo, Orange cinéchoc and Orange cinégéant), to which tere are currently 400,000 subscribers, will be offered via the Canalsat direct-to-home satellite platform and other operators. No details about when the channels will move onto Canalsat or how much they will cost were released.

The telco last year announced its intention to reduce its investment in content as part of a strategic move to focus on core telephony businesses. It is looking to sell a stake in its Orange Sport premium channel. Qatar-based Al Jazeera, which won TV rights to French domestic league football, is thought to be in talks. At the end of Q1 2011, France Telecom reported 891,000 subscribers to its premium movie and sport channels.

From France Telecom's point of view, the final deal looks like an improvement of the 50/50 joint venture announced earlier in the year. It gains distribution for its film channels on the Canalsat satellite platform, which IHS Screen Digest estimates had 3.68m subscribers at the end of Q1 2011, and the possibility to harness the pay TV group's promotional muscle. On the other hand, with its commitments to French movie production still in place and no reduction in the headcount of the staff on the movie channels, the question remains how the telco will make the savings on content investments that it claimed. The exclusive contracts with Warner Bros and HBO, which are due to expire this year, may therefore be where the axe falls.

Canal Plus, on the other hand, has mitigated the threat of head-on competition from the telco in the pay TV market by reaching an agreement over key premium content. The Vivendi-owned company has unquestionably been hit by the launch of the Orange pay TV service on IPTV and satellite. At year end 2010, Canal Plus had 6.154m subscribers in France, 243,000 fewer than its total at the end of 2008.

Tags:

Countries: France
Companies: Canal Plus Orange France Telecom Time Warner