Broadcasters Groan As Regulator Closes Digital Cashbox

Michael Hedges July 31, 2014 - Follow on Twitter

Regulators have a hard job, more so as that digital dividend turns the media sphere upside-down. Pressures from the great and good, not necessarily the same, are immense. Beyond applying laws written yesterday, it is necessary to judge the present without getting too carried away with a future nobody can predict. And the decisions never “please all of the people all of the time.”

The three biggest French commercial broadcasters cannot create free-to-air digital TV channels from pay-TV channels, said regulator CSA (Conseil supérieur de l'audiovisuel) this week.  The broadcasters applied for changes to concession status as digital TV channels from new operators dented revenues from pay platform carriage fees. The CSA denied the applications as potentially “destabilizing” to existing digital TV channels, citing “a marked decline in television advertising revenues.”

The broadcasters indicated readiness to close the channels rather than remain on pay platforms. Grumbling TF1 CEO Nonce Paolini said news channel LCI would “probably” close by the end of the year, reported Le Monde (July 29), though the company is examining “all legal remedies” including an appeal to Conseil d'État. Most observers believe a reversal of the CSA’s decision very unlikely.

The CSA’s decision “totally shocked and appalled” LCI general director and TF1 news director Eric Revel. “Some (at the CSA) seem not to understand what a private company does,” he said to public radio channel France Info (July 30). “LCI does not live on State subsidies. The CSA is supposed to insure plurality of information.” LCI news content borrows considerably from TF1 resources.

Running up to the CSA’s decision was considerable debate in France over news on television and how much of it the marketplace can absorb. All-news channel BFM TV, owned by NextRadioTV, has operated for nearly a decade, distributed free-to-air by satellite, cable and digital multiplex. Another free-to-air news channel operated by “already very powerful” TF1 “could weaken other actors,” said NextRadioTV Chairman and founder Alain Weill to Le Figaro (April 28). “The CSA must remain insensitive to the numerous political pressures in this case.” The CSA began deliberations on the pay-to-free switchover in May.

The main French cable operators have informed broadcasters that carriage fees will no longer be paid after the end of the year. M6 Group, principally owned by RTL Group, had proposed moving Paris-oriented and upscale-targeted channel Paris Première from pay platforms to free-to-air. Appealing the CSA’s decision to the Conseil d'État is also under consideration, said CEO Nicolas de Tavernost, if negotiations with cable operators fail to yield a revenue stream. “We will consider closing this channel if it is not viable,” he said to AFP (July 30). “It is regrettable that the CSA protects independents with little respect for their commitments.”

There was significantly less public grousing about the CSA decision from Canal+, which wanted to migrate its documentary channel Planète+ to free-to-air. Canal+, owned by Vivendi, is primarily a pay-TV operator. “The economics of pay digital television is certainly not fabulous,” said Canal+ director general Rodolphe Belmer on topic to Les Echos (June 3). “If we lose one channel… the whole system collapses.” Canal+ operates free-to-air all-news channel i>Télé with obvious little interest in seeing more TV news competition. Executives with BFM TV and i>Télé have begun, according to Nouvel Observateur (July 30), reaching out to LCI employees insecure about their futures.

TF1 may be able to shed LCI without the pain of closing it and paying off nearly 250 employees. The principle shareholders of daily newspaper Le Monde – referred to locally as BNP for Pierre Bergé, Xavier Niel and Matthieu Pigasse – confirmed “their interest in reviving LCI (which is) complimentary to the activities of Le Monde and consistent with transformation of the group,” wrote Le Monde general director Louis Dreyfus in an email to AFP (July 29). “With this perspective, the shareholder of Le Monde are ready to insure LCI’s sustainability and stand as guarantors of its independence.” The Le Monde shareholding group has considerable interest in the French news business, acquiring majority stakes in daily newspaper Nouvel Observateur and news portal rue89 in January. That interest does not extend to the Le Monde printing plant, which M. Dreyfus announced would close in 2015.

Knowing the decision would not please everybody, CSA president Olivier Schrameck, figuratively, shrugged. “The decision was the result of an analysis of the situation as presented to us through impact studies,” he told Le Monde (July 29). “It is for TF1 to take decisions freely. It will be their decision and not the decision of the CSA.” The CSA has been empowered to make “economic decision” since changes in its mandate last year.

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