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French TV Regulations' 'Root Canal' Favors Vivendi – Deutsche BankFrench media conglomerate Vivendi's pay-TV division, Canal Plus, is poised to "radically restructure" its business terms with telcos, and "increase monetization" and "reduce churn" resulting from a change in attitude within the Conseil Supérieur de l’Audiovisuel (CSA), the French media regulator. This was the main finding of a new report from Deutsche Bank, titled "Root Canal." Today Canal Plus must offer all its premium content to any pay-TV provider with more than 500,000 subscribers in France. The goal of this regulation was to protect French cultural interests and ensure quality programming was available to most French TV households. But this kind of regulation is unprecedented across Europe, according to the bank, and it has resulted in squeezed margins and high churn for Canal Plus. However, the CSA has now recognized the market has changed, with other pay-TV providers also bidding for content rights and the availability of OTT services such as Netflix, Amazon and public broadcaster France Télévision's own impending OTT service. (See OTT Forcing European Broadcasters to Raise Their Game.) According to the CSA, it must also allow for a "level playing field" even as it continues to protect French cultural interests. Therefore, its review of the 33 current restrictions on Canal Plus is expected to result in a relaxation of some regulation. The review is scheduled for June this year, and Deutsche Bank analysts anticipate the restrictions on Canal Plus will be relaxed at this time. The report still anticipates a weak Q4 (Vivendi 's financial year starts in May) but expects improvements to Canal Plus's negotiating position in the next financial year. The bank is also optimistic about the launch of Vivendi's new set-top box (LeCubeS), a hybrid OTT/WiFi set-top box not tied to any specific operator. The bank believes its availability will strengthen Canal Plus's negotiating position by allowing it to bypass the telcos unwilling to meet its terms, and deliver its content over-the-top. Vivendi got more good news when the CEO of Italy's Mediaset S.p.A. , Pier Silvio Berlusconi, stated that a joint European Netflix service with Vivendi was still a possibility, despite a breakdown in the relationship during the fall of 2016. The two companies had announced a new venture in May 2016, to join forces and take on Netflix with a streaming service aimed at Europeans. But in July the French company announced it would want to renegotiate the deal after seeing Mediaset's Q1 results. It decided the business plan was overly optimistic, and it no longer wanted ownership of Mediaset. This led to a fall in Mediaset's stock price, public acrimony and a lawsuit demanding compensation for Vivendi's late withdrawal. But despite opening the door to a deal, Berlusconi was not overly optimistic, saying only that he had met with Vivendi CEO Arnaud du Puyfontaine but only a "vague" reference to a possible deal had been made. He also stressed that the issues with Vivendi's pull-out earlier this year would have to be resolved in court, while Vivendi has stated it would need Mediaset to drop its lawsuit to re-initiate talks. Still, Vivendi has spent the past few months acquiring close to 30% of Mediaset, while Mediaset's new strategy of licensing its content to other pay-TV providers and opening its terrestrial pay-TV platform to third-party content providers would fit well with a combined entity. Vivendi owns sizable content libraries and also nearly 25% of Italian incumbent and IPTV provider Telecom Italia, which was also a central element in the complicated deal announced in the summer. While last week was probably a pretty good one for Vivendi, these announcements also highlight the challenges being created by new OTT entrants. Large European (and US) media conglomerates have controlled premium content for decades, but now they are scrambling to protect their market position and adapt to a new world order. Given the complex structures of these companies and the kind of deals they will need to create a Europe-wide service, this is likely to be a slow and often discordant exercise. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
Contentious issues that are likely to fuel lawsuits and angry blogs in the coming year.
Content producers are unhappy with the advertising approach and revenues they are getting on Facebook Watch.
OTT video usage is driving the penetration of various Internet connected devices to help view online streams on the larger TV screen.
Major Hollywood studio to trial 'virtual' movie theaters using head-mounted displays.
Network technology vendor Sandvine has found that piracy isn't only hurting network operator profits – each pirated set-top box is also using up 1TB per month in 'phantom bandwidth.'
On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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