French TNT explodes

The French broadcasting family is about to get bigger. This month will see the arrival in the free-to-air game of a major player, Canal+, whose acquisition of DTT outlets Direct 8 and Direct Star from Group Bolloré was approved by the Competition Authority in July. Marie-Agnès Bruneau reports.

French communications regulator the CSA is about to approve the launch at the end of the year of six new DTT (called TNT in France) high definition channels as Canal+, the premium programmer hitherto best-known for pay TV, also makes a big-money move into free-to-air.

The new additions will bring the current 19-channels offer to 25, covering all of France, with digital switchover having taken place in November. TF1 and M6 each have one new channel, respectively devoted to drama HD1 and family programming M6Ter (working title).

DTT players NRJ and NextRadio were respectively granted approval for female-skewing channel Chérie HD and a documentary net RMC Découverte. Another winner is a sports channel L’Equipe HD, originating from sports daily L’Equipe. The other is TVous La Diversité (working title) an independent channel promoting diversity matters, an issue dear to the CSA.

Timing is unfortunate for the existing free TV heavyweights, as the advertising market continues to suffer and the ad outlook remains uncertain.

The increased DTT offer will mean more competition for established players TF1 and M6 as well as for pubcaster France Télévisions, who have all suffered already from the rise of DTT. But more than the new outlets, it is the arrival of Canal+ that private players fear the most following its deal for Bolloré’s free-to-air channels Direct 8 and Direct Star.

Direct 8

Direct 8 already holds a significant market share of 2.3%, and pay TV group Canal+ has much deeper pockets than the other DTT players. While the six newly granted channels will launch with annual budgets of around €35-45 million, Canal+ is thought to be ready to invest €120 million into Direct 8 to turn it into a high-quality entertainment channel.

Direct 8’s revamp is already underway. Among others, the channel hired popular TF1 news presenter Laurence Ferrari, and has acquired Nouvelle Star, FremantleMedia’s Idol format, which used to be on M6.

In addition, Direct 8 will likely have free-to-air access to Canal+ original programming, such as its successful series Engrenages (Spiral), Borgia and Braquo, which so far only aired encrypted.

US series currently rate best on both private channels and the arrival of Canal+ as a free-to-air player threatens TF1 and M6 in terms of access to programming rights.

The Competition Authority however has limited Canal+ in foreign rights acquisitions and the group will only be allowed to sign one output deal with a US major for both free-to-air and pay TV rights. Direct 8 will have to have a specific acquisition team, separate from the one of Canal+, and deal only in free-to-air rights.

As for Direct Star, which has a 1.2% market share, it is less of a threat to the big players as its schedule is less general entertainment and includes a large chunk of music programming.

These changes are happening at a time when TF1 and M6 must carefully monitor their programming budgets, as both groups’ advertising revenues and profits were down in the first half as ad revenue declined at their flagship channels.

France Télévisions is also challenged and €30 million in the red and has announced cost cutting plans. Market leader TF1 has been so far the most hurt by DTT competition, losing 0.8 viewing share points in 2011 taking its total to 23.7%, and down further to 22.6% in January-to-July this year, despite the massive success of Shine France’s The Voice. TF1 has stated it will continue to save on programming spend and it did not renew the output deal it had with Endemol France.

HD1

TF1’s digital outlets, meanwhile, are doing better, both generalist channel TMC (the DTT leader) and younger-skewing NT1 have been on their way up with shares of respectively 3.6% and 2.1% in January-July.

Its new outlet HD1  will focus on drama and movies, the genres that viewers expect the most from, from the new channels. The annual budget for HD1 will be €40 million, including €30 million for programming, and the goal is to attain a 2% share in 2016.

The target demo will be 30-to-60 year-olds and women in daytime and mixed audiences at night.

In daytime there will be daily series, and in the evening weekly strands featuring crime series, history drama, art-house movies and “new trends from abroad”, as well as a documentary series about real-life stories.

Initially, the channel will rely on acquisitions, going for “off the beaten track programming, shortform features, foreign drama, and webseries” according to channel MD, and former head of TF1’s French drama operation, Céline Nallet.

Original drama has been clearly set as an ambition for HD1, as the channel wants to act “as a laboratory” for TF1, exploring new forms of narratives and looking for new talents.

HD1’s goal is to commission 100 hours of drama per year, including a daily access primetime series, which is part of its obligations, and a shortform comedy for the afternoon. However, “this will be produced on a rather low cost, in order to fit the channel’s (tight) budget,” said Nallet.

6Ter

Group M6’s flagship channel M6 has resisted the new competition better than others, managing to improve its market share lately to 11.4%, thanks to the success of its access primetime zone, driven by shortform comedy Scènes de Ménage, while L’Amour Est Dans le Pré (Farmer Wants A Wife) has been lately reaching shares of 30%.

Everything remains fragile however, as next to these, other primetime brands have eroded. As for its DTT outlet W9, the channel is second behind TMC among the digital channels, although its audience share declined to 3.1% in January-to-July.

With 6Ter, M6 wants to target the whole family. Its annual budget will amount to €40 million in year one, and climb to over €60 million, with breakeven point at a 1.7% share.

Programming will be varied and feature magazine shows, documentaries, and drama for 60% of airtime, together with movies, entertainment, as well as shows addressing kids and teens.

Chérie HD

Next to these big established players, challengers are trying to make their mark. Radio groups NRJ and Nextradio both have been successful so far in their DTT channels ventures, as the ad market continues to grow for the new DTT outlets.

NRJ’s NRJ12 has been climbing to an average 2.4% audience share in January-July thanks to successful original reality formats including Les Anges de la Télé-réalité, which reached shares of up 10% in June.

NRJ12 has developed a savoir-faire in low-cost original programming and the group wants to repeat that with its female-skewed  channel Chérie HD (from another radio brand Chérie FM).

The group hired Christine Lentz, a former top M6 and France 2 executive (she was in charge of magazine programming) to head the channel.

Chérie HD, which targets women aged 25-to-55, will comprise 60% original production, mostly magazines and talk shows, and a few dramas, with a programming budget of €110m over five years. The channel already ordered its first French series, Burn Out, from Mascaret Films. Its goal is a 1.8% audience share in 2015.

Mascaret Films’ Burn Out

RMC Découverte

Relying more on acquisitions, although it will also be active as well as a commissioner, will be documentary channel RMC Découverte, from the Nextradio group.

It is in need of 600 hours of content in year one, of which, according to French regulation 60% has to be European and 40% French, with an acquisition budget of €15million.

Radio goup Nextradio has found success with its DTT news channel BFMTV, enjoying a 1.8% audience share. With RMC Découverte, from another of its radio brands, the group hopes to reach a 2% share, targeting well-off high-profile advertising demos.

The channel will be devoted to discovery and knowledge documentary programming.

The schedule will build on weekly primetime strands about travel, natural history, sciences, feature length documentary with documentary series in access primetime.

As programme director, RMC Découverte hired Gwenaelle Troly, formerly at same position for Fox documentary channels in France.

Tvous La Diversité

Another new channel will be Tvous La Diversité (its name will change ahead of launch), which emanates from Pascal Houzelot, a long-time TF1 consultant in charge of lobbying for the broadcaster, and known for his prestigious network of contacts.

Programming will be diversified, including drama and movies from regions including Asia and Africa.

Former TF1 senior VP Etienne Mougeotte agreed to act as a consultant and former M6 and Canal+ acquisition executive Nathalie Drouaire is programme director.

The team also comprises former AB executive Carine Brulé as head of acquisitions and scheduling, and Chloé Ferret as executive assistant, editorial. Advertising sales house will be TF1 Publicité.

In their pitch, all of these new channels said they will show the programming that the other networks don’t.

They will as a result represent new opportunities for producers and distributors, up to a point, as all channels are committed to commissioning original programming, albeit generally at a low cost.

Prices for acquired programming have already gone up with RMC Découverte reportedly outbidding the former factual specialist, cabsat channel Planète for programming. The question mark remains what impact the new channels will have on existing players and how the audience and advertising market will respond.