France

At the moment, everything in the French television market is about digital TV, due to the launch of CANAL+’ digital satellite service Canalsatellite Numérique at the beginning of May. This is the first public start of digital television broadcasting in Europe, and experts believe France to be a leading and fast growing market in Europe, since it has got only a limited amount of analogue satellite television. CANAL+’ position in the market is supposed to be further strengthened if its plans of buying the MGM/UA library, comprising some valuable feature movies, turn into reality.

AB Sat began test transmissions of an eight-channel digital package in February and plans to extend that by the end of the year to 28 channels. But the real threat for CANAL+ faces from the newly formed French digital consortium Télévision par Satellite (TPS), comprising France Télévision, TF1, M6 and cable operator Lyonnaise Communications, a group that was lately joined by CLT and with France Télécom supposed to be joining shortly. The former rivals will form a compagny that will be owned as to 25% each by France Télévision and TF1, as to 20% each by M6 and CLT and as to 10% by Lyonnaise Communications. TPS is scheduled to start broadcasting by the end of this year with a bouquet of digital services rivalling the CANAL+ business.

But life within the TPS group will be difficult for CLT which recently signed a merger with Germany’s UFA, a subsidary of mighty Bertelsmann. Bertelsmann itself has co-operation agreements with CANAL+ which prevent them from competing with one another in the French pay-TV market, and even competition through CLT, participating in TPS, will be seen as a breach of contract. CLT needs the approval of its partners in the holding company CLMM, which will soon be jointly controlled by Bertelsmann, before it can ratify the TPS deal. Bertelsmann has already pointed out that it "would not bet" that CLT will join TPS. Also media investor HAVAS, holding stakes in CLT as well as CANAL+, opposes the deal and will only support the CANAL+ bouquet.

Further problems arise for TPS member TF1 as it did not fulfil the European broadcasting quotas for the third consecutive year, which, in addition to a fine of 45 mio. French Francs, has led to a discussion whether TF1’s broadcasting licence, expiring 1997, shoud be renewed or not.

© May 1996 by Jens Barkemeyer