Could Television Go The Way Of Newspapers?

Michael Hedges September 2, 2013 Follow on Twitter

Television is in big trouble. Media buyers under the internet’s spell are pushing ad rates lower. At the same time new digital choices cannibalize audience and revenue streams. The result is painful and may send free to air TV the way of newspapers.

“When you create twenty-five channels, operating conditions should be clear,” observed M6 president Nicolas de Tavernost to France Inter, quoted by Les Echos (August 30). “If everyone goes after the advertising pie, there will be a disaster. Either a slow disaster, which you can watch now with less interesting programs because there is less means to pay for (for them) or a faster disaster, (meaning) bankruptcy.”  

M6 is the highly successful free-to-air French national TV channel owned by RTL Group. The M6 group of stations includes DTV channels W9 and Paris Premiére as well as several digital cable channels. RTL Group reported first half 2013 gross earnings (EBITA) for Groupe M6 “slightly up” to €127 million.

Television revenues for French broadcasters in 2012 fell to €3.337 billion from €3.496 billion the previous year, reported media regulator Conseil Supérieur de l’Audiovisuel (CSA – May 24). Overall ad spending in France dropped 3% from 2011. The CSA noted “poor economic conditions” would plague French media seeking advertising revenues in 2013 and “the advent of the internet…has significantly changed the investment choices of advertisers.” Television took the biggest slice of the French advertising pie in 2012 with 35%, followed by newspapers (28%), the internet (16%), then radio (6.6%). Omnicom Media forecast (April 17) a 6.5% drop in French TV advertising expenditures for 2013.

Then, too, six new digital TV channels were licensed last December, much to the consternation of legacy TV operators. “After five years, advertising has not multiplied with the multiplication of channels,” said M de Tavernost. “On the contrary, it has contracted a little with internet competition.”

Free-to-air digital television is taking a growing share of French TV viewers, who are, understandably, watching more TV. Since 2007 the digital TV market share has jumped from 5.9%, on aggregate, to 22% in 2012 led largely by W9 (Groupe M6) and TMC (TF1 Group). French people this year are spending 250 minutes per day with one screen or another, according to research institute Médiamétrie, up from 247 minutes in 2012.

As channels proliferate, operators look for every competitive advantage. TF1 Group’s all-news pay-platform channel LCI may, if the French Senate agrees, become a national free-to-air channel. Pay-TV has never been a big deal in France. Ad sales is aggregated for the digital channels operated by big French TV groups; more gross reach, more money. Paris Premiére, the “high-brow” channel of M6 Groupe, may also become a free to air channel under the same scheme.

This would give French TV viewers a choice of three all-news channels, certainly to the delight of media plurality advocates. It’s a headache – perhaps beyond a migraine - for broadcasters. “There is no room for three free news channels in France,” said NextRadioTV CEO Alain Weill, all-news channel BFM TV owner, quoted on the BFM TV website (August 28). “If LCI is in trouble, it is because LCI made a bad strategic choice.” Canal+ owns the other all-news TV channel, i>Télé.

“We would pass from one ill person to three dying ones,” he added. “This would destabilize BFM TV and strengthen TF1. It’s just impossible.”

“With the proliferation of channels viewers are increasingly demanding,” noted media consultant Pascal Josèphe, quoted by La Croix (August 27). “If they want to keep their positions, the channels…must offer creative and innovative national content, programs that surprise and delight. Quality is still the best way.”

See also in ftm Knowledge

Media in France

French audiences are moving fast to every new platform. Mobile and Web media challenges the old guard while rule makers seek new directions. Media life in France... and a few secrets. includes updated Resources 147 pages PDF (November 2011)

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