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Television: Canal + is it in Danger?

The pay-TV channel has lost the broadcast rights of Ligue 1 from 2020. Can this historic decision put Canal + in jeopardy? Explanations.

Deprived of the rights of the football ligue 1, a historical asset, and attacked on the niche of films and series by new competitors like Netflix , Canal + is now obliged to reinvent itself.

Canal + did not accept the soaring price of TV rights for the period 2020-2024, which rose by 60% over the previous period to total more than one billion euros.

“We have not stopped announcing the death of Canal + for 15 years”

“I think it is impossible for any actor to bet such sums and make them profitable,” said Thursday morning Europe 1 Maxime Saada, CEO of Canal +.

“There are ways to reinvent ourselves, today we are a chain that is more competitive than it has ever been”.

The pay TV channel, which must already face an erosion of its audience, will have to give up the broadcast of these matches which have done so much for its success, except to succeed to negotiate agreements with the big winner of the call of offers, the Spanish group Mediapro, controlled by the Chinese fund Orient Hontai Capital.

For Olivier Bomsel, holder of a chair in media and brand economics at Paris Tech, Canal + comes to the end of the very hexagonal model defined at its creation in 1984.

Canal + was “a political tool”, which allowed “to rank under the obligations of the chain, inflated football rights, financing” French cinema, he said.

Among the last ups and downs of this old agreement, according to Oliver Bomsel, the intervention of President François Hollande in 2014 with the Emir of Qatar, during the previous call for tenders for L1 matches.

At the time, Hollande had called on the Emir of Qatar to prevent BeIN Sports from raising the stakes too much and stealing the rights, an initiative that had angered the Professional Football League (LFP) when she had learned it.

But this model is being undermined: the very concept of a television channel is being questioned, and rich international players are coming to attack the channel on its markets, be they Qataris behind beIN or Netflix, the platform of video on demand.

Canal + must reinvent itself

As a result of uncertainties about the channel’s future, Vivendi, Canal +’s parent company, lost 3.82% in mid-day on Wednesday.

However, the loss of rights of the L1 “may be a bad for a good” for Canal +, giving him the means to evolve in depth, estimates Jerome Bodin, analyst at Natixis.

Canal + could manage to generate “up to 540 million euros in savings per year” in a scenario without L1, he said.

This “will give him the means to profoundly transform his model, and better tailor its offer to the market structure, with the growing importance of fiction” and the demand for a “global size”, considers Jérôme Bodin .


Subscriber leak

Like Olivier Bomsel, Jerome Bodin believes that “Canal + has every interest in letting other actors bear the financial burden” of the rights of the L1, “even if it means finding an agreement with them”.

“Subscribers mainly watch movies, series”, and we must not overestimate the importance of football, said his side Maxime Saada.

“There are only two million subscribers (out of 4.9 million in France, ed) who occasionally watch the L1 “and” it can be less than one match per month.”

But some analysts are more pessimistic.

“In the scenario of the worst, it is 40% of subscribers who would leave” , a loss of turnover close to one billion euros, estimates Bruno Hareng of Oddo Securities.

And if Canal + has acquired a solid know-how in fiction, the channel is facing stiff competition from new US players, he says.

“Can Canal reinvent itself as an HBO (French series channel) in the French, I want to believe, because there is still an expertise, original series that work well,” said Bruno Herring.

“Unfortunately, all the players who wanted to compete with the American behemoths do not work very well,” he adds, referring to the difficulties of Daily Motion (French video sharing platform) or Viadeo (professional social network).

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