French Broadcasters Up Content Production to Combat Netflix, Amazon Prime Video

After a slow start, Netflix France has topped five million subscribers despite alienating exhibitors ignoring local theatrical windows for original movies.

To combat Netflix, Amazon Prime Video and over-the-top video distribution in general, French broadcasters are increasing their investment in local original productions.

Last year, the country’s top broadcasters — France Télévisions, Canal+, TF1, M6 and Orange — spent €5.4 billion ($6.1 billion) on content, with over 40% of that spending dedicated to original programming, according to new data from Ampere Analysis.

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At the end of May, 106 new local shows were in development or production, while Netflix is currently producing 15 new TV shows for the French market.

“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,” analyst Léa Cunat said in a statement.

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While increased competition from OTT services has French broadcasters on the defensive, proactively engaging in content production in the face of waning advertising revenue and budget cuts has some operators rethinking their business models.

As a result, licensing third-party content has given way to original productions. This strategy offers two significant benefits, according to Ampere: monetizable IP portfolios and a diversified revenue stream.

Pay TV group Canal+ launched a new SVOD service in March – Canal+ Séries – dedicated to a younger audience, supported by shows such as “Mouche,” a reboot of the BBC’s “Fleabag”.

TF1 just announced plans to further enhance its TVOD platform, MyTF1, with new advertising inventory and new exclusive content.

France Télévisions is focusing on international partnerships with other broadcasting groups to help support its local content investments.

Orange created a new division – Orange Content – merging pay-TV operations with the film division to produce original episodic programming. Literary adaptation The Name of the Rose was the first  original show to air, broadcast in March.

Ampere says SVOD represented only 3% of France’s €14 billion ($15.8 billion) audiovisual market in 2018.

France’s OTT market lags a number of its peers – including Scandinavia, the U.K. and the U.S. – but digital subscriptions are growing rapidly.

To tap into this growth broadcasters France Télévisions, TF1 and M6 announced the creation of Salto, a new SVOD platform set to launch later this year.

Offered alongside their free channels, Salto will provide TV shows and exclusive content with an emphasis on French and European productions.

Through this new service, the broadcasters aim to generate revenue from subscriptions and maintain control over content rights following their initial broadcast window.

For instance, France Télévisions has said it will cease licensing the French digital rights of “Call My Agent!” to Netflix and has signed an exclusivity time period on digital rights for the shows it co-produces or commissions.

“With increasing competition from international behemoths Netflix and Prime Video, there’s no shortage of tactics and strategies being employed to stay in the game,” Cunat said. “It’s a fascinating market to watch as it transforms.” 

Indeed, French broadcasters are looking abroad to grow key markets, including Africa where Canal+ has more than 4 million subscribers across 25 countries. This market has a rapidly expanding middle class with growing disposable income, which makes it particularly appealing.

Once again, the broadcasters have taken different approaches to international expansion.

Canal+’s production arm StudioCanal launched a new TV production unit in February 2018, dedicated to creating premium original content for an international audience.

Canal+ also produces content dedicated to its foreign local markets: “Invisibles” was released in October 2018, the broadcaster’s first African original series, a market the broadcaster has earmarked for growth.

The pay-TV operator also collaborates at an international level and has worked on the U.S. remake of its original “Calls” with Apple TV+ and “Safe” with Netflix via a U.K.-based subsidiary.

TF1 is increasing its investment in European creation via Newen, a global production company it acquired in 2015. It has also bought stakes in European production houses in Belgium, the Netherlands and Denmark. Shows created by these companies include “Versailles,” “Ares” and “The Bridge”.

France Télévisions partnered with Italian broadcaster RAI and German broadcaster ZDF to fund and produce TV series for domestic and international audiences. Projects announced thus far include “Leonardo” and “Around the World in Eighty Days”.

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‘Très Bien’: Netflix Dominates French VOD Consumption

After a sluggish start, Netflix France has finally established solid footing since launching in the country five years ago.

The subscription streaming video pioneer, which once faced strong criticism from state-subsidized local media and allegations the service would destroy France’s “cultural exception” — especially at the box office, started strong in 2019, capturing more than 52% of all video-on-demand consumption in January, according to Harris Interactive and CNC.

Netflix surpassed Canal Plus (4.76 million subs) with 5 million subscribers, which prompted the French pay-TV operator to launch a new service – Canal+ Séries– focusing on TV shows, including programming from Showtime, FX and others.

On-demand digital programming continues to grow in popularity among the French, with 18% of users watching delayed content, up 2.5% from January 2018.

Nearly 12% consumed transactional VOD content, down 1.6% from 2018, while digital sales of movies and TV shows increased 6.1%.

In January this year, 52.6% of people watching on-demand programming opted for Netflix – up more than 8% compared to January 2018. By comparison, 19.7% consumers chose MyTF1 VOD and 19.5% on Orange.

Amazon Prime Video generated 15.3%, with Google Play and Apple iTunes at 8.2% and 7.5%, respectively.

Indeed, Netflix France ended January with 2.6 times more users than MyTF1 VOD. Not surprisingly, nine Netflix series ranked among the Top 10 programs viewed.