Canal+ Canada: The Trojan horse of a French giant?

In October, French and European media giant Canal+ Group announced its upcoming arrival in Canada’s French-language market. Almost all of the content produced by the group (with the exception of sports content) will be available through a dedicated channel on DailyMotion.

The offer will include an unlimited subscription for $7.99 per month, on-demand films starting from $2.99 as well as free access to content that is broadcast on cable and Hertzian networks by Canal+ in France (including its highly popular shows Les Guignols, Le Petit Journal, Le Grand Journal, etc.).

Surprisingly, the arrival of Canal+ Group in Canada’s French-language markets has had a greater impact on the other side of the Atlantic than here in Canada. Although the group is not very well known here, in France and Europe, it is an entertainment giant as well as a firsthand partner in the film industry.

A subsidiary of Vivendi Universal Group (Universal Music[1], Universal Games), Canal+ Group is in first place among French pay TV providers. It owns dozens of television channels as well as a satellite package (Canal Sat) and operates in over thirty countries including Poland, Vietnam and several Francophone countries on the African continent. Today, Canal+ generates 30% of its business on international markets. The group is also a leader in video-on-demand and web-based content broadcasting (steaming via the Internet, PCs, smartphones and tablets).

STUDIOCANAL: A CATALOGUE OF MORE THAN 5,000 TITLES

StudioCanal is Canal+ Group’s filmmaking subsidiary and the most important global player in film content production and distribution. The studio finances close to 80% of box-office productions in France and produces some 40 or so films in Europe each and every year. StudioCanal also owns one of the most impressive catalogues on the planet, containing more than 5,000 French, British, Italian, German and American titles (including 2,000 digital titles, some 1,000 of which are in high definition).

These figures explain why Canal+ now wishes to extend its influence to North America, specifically to Canada’s French-language markets (seeing as its offer is in French only).

A LABORATORY

For Jean-Marc Juramie, Canal+ Group’s director of international projects, Canada’s limited French-speaking population makes it an ideal group for testing new projects.

The first step will be to test a new mode of distribution. It’s the first time that Canal+ markets its content on the Internet without television broadcasting. At the international level, Canal+ had always expanded by launching channels (packages in Maghreb and Vietnam) or acquiring packages (e.g., the TVN package in Poland).

Jean-Marc Juramie considers that the group’s technological choices were dictated by new uses—including the buzz surrounding tablets. Evolving content consumption behaviours make it possible today to reach much larger audiences without operating pay television (which remains at the heart of Canal+’s offer). Canal+ Canada will initially be broadcast through the Internet via DailyMotion and via an application at a later time.

The project is also aimed at measuring interest for a French-language content offer outside of France. In this regard, Canal+’s offer targets the cultural entertainment niche—a niche susceptible of interesting between 20% and 25% of French Canadians according to the group’s estimates. These consumers tune in to French culture and are interested in foreign films.

On the other side of the Atlantic, all of the buzz has to do with the price: CAD$8 per month (or only 5.70 Euros) versus 40 Euros per month in France.

This Canadian offer represents the first partnership between Canal+ and DailyMotion. Both partners share the revenue and DailyMotion will be paid a commission rate similar to that paid to broadcasters and operators.

The partnership is highly beneficial for DailyMotion. It will help the platform to learn how to offer pay content while reinforcing its position in North America. (DailyMotion systematically draws more than 4.5 million unique Canadian visitors per month who view over 80 million videos on a monthly basis.)

CANAL+ STRATEGIC POSITIONING IN CANADA

Seven years ago, Canal+ adopted an original creation policy to generate subscriptions through the production of world-class series able to compete against those produced by HBO and Showtime. The strategy was based on the idea that generating subscriptions and attracting viewers to a channel depended on the development of original series. Today, the television series produced by the group represent the third reason—after film and sports content offers—explaining why French consumers subscribe to Canal+.

Canada’s French-speaking audiences will therefore have access to ambitious productions that have earned national and international recognition the likes of Maison close, Braquo and Mafiosa (its latest season will be broadcast in Canada at the same time as in France).

In this first North-American venture, one of Canal+’s main challenges will be to shorten content broadcasting delays between France and Canada (these delays are the main culprits responsible for illegal downloading according to Mr. Juramie). By using the Internet, Canal+ will have total control over its content[2] and will no longer have to pass through a distributor (it took five years before Braquo was broadcast on TV5 Québec-Canada).

Finally, for Jean-Marc Juramie, Canal+ Canada’s primary objective is not to copy Netflix even though its film catalogue rivals the latter’s seeing as the American platform does not count very many subscribers among French-speaking Canadians (5% according to Media Technology Monitor, 21% nationally). He claims that the goal is to provide an “editorialized” service, a sort of cross between TV and TVOD, proposing anywhere from 50 to 60 films per month. Has quality become more important than quantity?

 


[1] Universal Music Group is number 1 in the global music industry; its recent acquisition of EMI Recorded Music enabled it to reinforce and diversify its presence.

[2] Le Devoir recently informed us that the Canadian Broadcasting Corporation struck a deal with European giant StudioCanal under which the CBC will have access to StudioCanal’s catalogue. The CBC will therefore be authorized to distribute on its territory some 1,400 StudioCanal films in Blu-ray, DVD and video-on-demand (VOD) formats.

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The CMF Watch Squad is part of the Canada Media Fund’s Industry and Market Trends division. This network is comprised of contributors- individuals and institutional partners-  renowned for their expertise and influence in the field of digital and interactive media. The Watch Squad’s objective is to foster a collaborative approach to collect, analyze, and share information and knowledge.

Posted in: Industry Transformations



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