TNT for France's TV market
Digital TV: The number of free-to-air TV channels has tripled overnight. The advertising pie, however, seems to be shrinking much more slowly.
Digital TV The number of free-to-air TV channels has tripled in one fell swoop. Another kind of revolution: "La Grande Nation" has overcome the television stone age and now has more than a handful of TV stations. Since last week, "télévision numérique terrestre" (TNT) has been bringing digital TV quality to French homes, even without cable or satellite. All it takes is the purchase of a decoder starting at 79 euros and connection to a house antenna.But will the TV audience also jump at it to be able to consume new, in part still completely unknown small channels? The average French TV viewer has so far followed the herd instinct rather than a penchant for individualism and, according to most experts, is likely to remain more loyal to the previous "chaînes généralistes." Perhaps even more loyal than the English, for example, who still watch 82 percent of their traditional channels after the introduction of TNT.
Ideological mudslinging
The major TV stations naturally expect a certain loss of market share and advertising revenue, but are by no means panicking. Patrick Le Lay, president of the heavyweight TF 1, did everything he could to prevent the launch of TNT. But it wasn't just fear of the new competition that played a role here; the private chain suspected the left-wing director-
Le Lay even referred to the TNT project as "Marxist" for this reason. Now, under pressure from the state broadcasters - and with the connivance of head of state Jacques Chirac - the bourgeois Prime Minister Jean-Pierre Raffarin, of all people, finally paved the way for terrestrial digital TV.
No wonder, Le Lay is now jumping on the bandwagon he couldn't stop and is joining several small stations. He suddenly no longer fears negative consequences for TF 1 from the outside. On the other hand, he predicts even tougher competition and an emphasis on "event television. By that, he means, for example, the current blockbuster format "Première Compagnie," in which celebrities in a tropical military barracks learn, for example, how to crawl through dirt and - even more difficult - to sit on their own mouths.
In view of the tremendous co
In the face of the competition for ratings that broadcasters like TF 1 and France 2 are throwing into the fray every day, TNT's youngsters will have a hard time of it. Their future prospects are also considered uncertain. The sales company TDF estimates that only about 5 million households will be equipped with a decoder in 2010; the media consultancy NPA assumes that 6.5 to 8.5 million sets will be sold. With just under 25 million households in France, these are not exactly overwhelming conditions.
Opinions differ widely on the future market shares of the existing and new stations. The media agency Carat Expert, for example, concludes in a detailed TNT study that the audience share of TF 1 could decline from the current 31.8 percent to about 26 percent; that of M6 is expected to drop from 12.5 percent to about 10 percent. By contrast, Carat gives TNT's "newcomers" a combined rating of a quarter to a third in the long term.
The stock exchange company SG Securities thinks this is greatly exaggerated. It is convinced that, as in Italy, the new TNT stations will only be able to grab a "microscopic market share." "Anyone who wants to acquire advertising with an audience share of less than one percent is embarking on a 'mission impossible,'" says Arnaud Frérault of SG Securities. This partly explains why commercials, at least among TNT novices, cost only between 10 and 300 euros in the initial phase.
Commercial late bloomers
The so-called "top dog bonus" also plays a major role in France. TF 1 and M6, which together have a share of around 44 percent, have an advertising share of no less than 77 percent because of the leader bonus. Mini stations with mini budgets can at best nibble away at that. Moreover, the loss of advertising for TF 1, France 2 and M6 should be largely compensated for by the imminent opening of French television to supermarket advertising. This is currently still prohibited, but from 2007, retailers such as Carrefour and Champion will also be allowed to run TV ads.
Carat assumes that the advertising second will then be 7 percent more expensive on average. The Paris-based agency estimates that the total volume could increase by up to 500 million euros. TF 1 is likely to take the lion's share at 200 million. By ten years from now, French TV advertising spending is expected to have risen from its current level of just under
6 billion to over 9 billion euros.
But the TNT juniors will have to be patient for now. Vincent Bolloré, a financial investor from Brittany, admits that his Direct 8 station won't be in the black until 2012 at the earliest. And Didier Beauclair of the "union des annonceurs" also predicts: "Advertisers are waiting until the first results are in. In other words, the TNT bomb is likely to be a late bloomer commercially.
The new TV channels will also compete with blockbuster formats such as "Première Compagnie".
Télévision à la françaiseThe French love freedom,
But normally, they are content with five free-access channels (six if you include the pay TV station Canal Plus). Anyone who thinks that the cultural nation of savoir vivre doesn't spend as much time in the henhouse is mistaken.
minutes, the French spend on average about the same amount of time in front of the "petit écran" as the other Europeans.
Only a quarter of all French people have a satellite dish, cable connection or broadband access to receive foreign channels by the dozen. The audience shares of the major French broadcasters are correspondingly high: TF 1, which was privatized in 1987 and belongs to the Bouygues construction group, is watched by almost a third of French people (31.8 percent). It is followed by the state broadcaster France 2, with a 20.5 percent share, and France 3, with 15.2 percent.
The pay channel Canal Plus on the fourth channel, founded in 1984, belongs to the Vivendi Group and is subscribed to by 3.8 percent of TV viewers. The educational channel France 5, in turn, reaches 6.7 percent of viewers during the day and is replaced in the evening by the Franco-German culture channel Arte (3.7 percent, compared with 0.8 percent in Germany). And Bertelsmann's M6, which is consumed primarily by young people, has steadily increased its audience to 12.5 percent in recent years.
As of last week, digital TNT allows reception of 14 more channels. Some already exist on cable. Others are completely new, such as Direct 8 (Bolloré Group) and
NT 1 (Group AB), which offer a general full-service program. Music is the focus of W9 (launched by M6), as well as NRJ 12, with which the radio station NRJ ventures into the television market. In addition, there is TMC (Télé-Monte-Carlo), in which TF 1 has a stake, and the state-owned cultural station France 4. In a second step, pay stations will be added. (brä)
Stefan Brändle, Paris
Ideological mudslinging
The major TV stations naturally expect a certain loss of market share and advertising revenue, but are by no means panicking. Patrick Le Lay, president of the heavyweight TF 1, did everything he could to prevent the launch of TNT. But it wasn't just fear of the new competition that played a role here; the private chain suspected the left-wing director-
Le Lay even referred to the TNT project as "Marxist" for this reason. Now, under pressure from the state broadcasters - and with the connivance of head of state Jacques Chirac - the bourgeois Prime Minister Jean-Pierre Raffarin, of all people, finally paved the way for terrestrial digital TV.
No wonder, Le Lay is now jumping on the bandwagon he couldn't stop and is joining several small stations. He suddenly no longer fears negative consequences for TF 1 from the outside. On the other hand, he predicts even tougher competition and an emphasis on "event television. By that, he means, for example, the current blockbuster format "Première Compagnie," in which celebrities in a tropical military barracks learn, for example, how to crawl through dirt and - even more difficult - to sit on their own mouths.
In view of the tremendous co
In the face of the competition for ratings that broadcasters like TF 1 and France 2 are throwing into the fray every day, TNT's youngsters will have a hard time of it. Their future prospects are also considered uncertain. The sales company TDF estimates that only about 5 million households will be equipped with a decoder in 2010; the media consultancy NPA assumes that 6.5 to 8.5 million sets will be sold. With just under 25 million households in France, these are not exactly overwhelming conditions.
Opinions differ widely on the future market shares of the existing and new stations. The media agency Carat Expert, for example, concludes in a detailed TNT study that the audience share of TF 1 could decline from the current 31.8 percent to about 26 percent; that of M6 is expected to drop from 12.5 percent to about 10 percent. By contrast, Carat gives TNT's "newcomers" a combined rating of a quarter to a third in the long term.
The stock exchange company SG Securities thinks this is greatly exaggerated. It is convinced that, as in Italy, the new TNT stations will only be able to grab a "microscopic market share." "Anyone who wants to acquire advertising with an audience share of less than one percent is embarking on a 'mission impossible,'" says Arnaud Frérault of SG Securities. This partly explains why commercials, at least among TNT novices, cost only between 10 and 300 euros in the initial phase.
Commercial late bloomers
The so-called "top dog bonus" also plays a major role in France. TF 1 and M6, which together have a share of around 44 percent, have an advertising share of no less than 77 percent because of the leader bonus. Mini stations with mini budgets can at best nibble away at that. Moreover, the loss of advertising for TF 1, France 2 and M6 should be largely compensated for by the imminent opening of French television to supermarket advertising. This is currently still prohibited, but from 2007, retailers such as Carrefour and Champion will also be allowed to run TV ads.
Carat assumes that the advertising second will then be 7 percent more expensive on average. The Paris-based agency estimates that the total volume could increase by up to 500 million euros. TF 1 is likely to take the lion's share at 200 million. By ten years from now, French TV advertising spending is expected to have risen from its current level of just under
6 billion to over 9 billion euros.
But the TNT juniors will have to be patient for now. Vincent Bolloré, a financial investor from Brittany, admits that his Direct 8 station won't be in the black until 2012 at the earliest. And Didier Beauclair of the "union des annonceurs" also predicts: "Advertisers are waiting until the first results are in. In other words, the TNT bomb is likely to be a late bloomer commercially.
The new TV channels will also compete with blockbuster formats such as "Première Compagnie".
Télévision à la françaiseThe French love freedom,
But normally, they are content with five free-access channels (six if you include the pay TV station Canal Plus). Anyone who thinks that the cultural nation of savoir vivre doesn't spend as much time in the henhouse is mistaken.
minutes, the French spend on average about the same amount of time in front of the "petit écran" as the other Europeans.
Only a quarter of all French people have a satellite dish, cable connection or broadband access to receive foreign channels by the dozen. The audience shares of the major French broadcasters are correspondingly high: TF 1, which was privatized in 1987 and belongs to the Bouygues construction group, is watched by almost a third of French people (31.8 percent). It is followed by the state broadcaster France 2, with a 20.5 percent share, and France 3, with 15.2 percent.
The pay channel Canal Plus on the fourth channel, founded in 1984, belongs to the Vivendi Group and is subscribed to by 3.8 percent of TV viewers. The educational channel France 5, in turn, reaches 6.7 percent of viewers during the day and is replaced in the evening by the Franco-German culture channel Arte (3.7 percent, compared with 0.8 percent in Germany). And Bertelsmann's M6, which is consumed primarily by young people, has steadily increased its audience to 12.5 percent in recent years.
As of last week, digital TNT allows reception of 14 more channels. Some already exist on cable. Others are completely new, such as Direct 8 (Bolloré Group) and
NT 1 (Group AB), which offer a general full-service program. Music is the focus of W9 (launched by M6), as well as NRJ 12, with which the radio station NRJ ventures into the television market. In addition, there is TMC (Télé-Monte-Carlo), in which TF 1 has a stake, and the state-owned cultural station France 4. In a second step, pay stations will be added. (brä)
Stefan Brändle, Paris
