Can French broadcasters change business models, play on a global SVOD stage?

OTT

As more global OTT players have pushed into France with libraries of original local content, the nation’s largest broadcasters have begun to follow a similar lead. Increasingly, they’re pushing out their own high-value original local content.

It’s not just content targeting the French market. The new content is designed to play on an international stage, creating new incremental streams of revenue to further fuel the new content push.

France Télévisions, Canal+, TF1, M6 and Orange spent €2.16 billion ($2.44 billion) on original local content, 40% of their overall €5.4 billion content spend, according to researcher Ampere Analysis. But Netflix, which has more than five million subscribers in France, also is pushing local development, with 15 new programs targeting the French audience. The market also has seen an influx of content from OTT companies like Amazon Prime Video, BeIN Sports and Mediapro, among others.

French consumers are adopting digital TV subscriptions quickly, and the local broadcasters know they must respond fast if they are to protect their revenues in a changing media landscape,” says Ampere analyst Léa Cunat. “With increasing competition from international behemoths Netflix and Amazon Prime Video, fierce price wars for exclusive sports content, and flat ad revenues, there’s no shortage of tactics and strategies being employed to stay in the game.”

Original local content, global distribution

Among the new strategies broadcasters are using to evolve their business models:

  • Pay-TV group Canal+ has launched a new SVOD service – Séries – targeting younger users and, in the process, has cut costs elsewhere to invest in content;
  • Broadcaster TF1 is planning to enhance its catch-up platform MyTF1 with new advertising inventory and new exclusive content, hoping to create new ad revenue opportunities;
  • In an effort to support its own local content initiatives, public broadcaster France Télévisions is focusing on international partnerships with other broadcasting groups; and,   
  • In a move intended to accelerate its ability to get premium content to its premium TV operations, Orange’s OCS launched Orange Content, a new joint venture – of sorts – with Orange Studio. It’s first production debuted in March. The group plans to invest €100.9 million ($114) million in original series over the next five years.  OCS also has an agreement with local film guilds to spend €125 million ($142 million) on local content in the next three years. The goal: “To create a synergy and combine resources to be more competitive for acquisitions and strike multi-territory deals,” Guillaume Jouhet, CEO of OCS, said in January.

Like US content, French content tends to travel well. Broadcasters and operators have turned significant attention – and resources – to growing global markets to create larger revenue streams.

The bottom line

France’s subscription video-on-demand (SVOD) market is smaller than either the UK or Scandinavia, but it is seeing rapid expansion. In 2018, SVOD made up just 3%, about €420 million ($474.6 million) of the industry’s €14 billion ($15.9 billion) in revenues.

But the potential for growth in the market is a real one – especially as French broadcasters look to create more original programing to compete with other SVOD players in the market, like Netflix, BeIN Sports, Amazon Prime Video and Mediapro.

Broadcasters France Télévisions, TF1 and M6 plan to roll out a new SVOD play, “Salto,” later in 2019. It will stream alongside their free channels and include exclusive French and European content.

Taking a page from content owners in the US that have pulled their content back from Netflix to stream it on their own platforms, France Télévisions says it has signed an exclusivity time period on digital rights for the shows it co-produces or commissions that will keep them off Netflix. Of course, the question there is will it earn more from its exclusivity than it might licensing the content to Netflix?

Stay tuned.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn