France’s national competition regulator has told Canal Plus that it must maintain diversity within French cinema as a condition of its acquisition of OCS and Orange Studio.
Canal already owns 33.3% of OCS and is the greatest contributor to the OCS subscriber base of 2.9 million.
The Autorité de la concurrence said it identified a risk with the purchase to the diversity of French cinema by creating a monopoly position in favour of the Vivendi unit.
The transaction would have placed Canal Plus Group in the position of sole pre-buyer of recent French films for first-pay-window broadcast.
First-window broadcasters are key players in the financing of film projects. To date, Canal Plus Group and OCS are the only two first-pay-window outlets available to French film producers seeking pre-financing for their projects.
As a result of the transaction, the only alternative to Canal Plus Group in the first window, namely OCS, would disappear. While the amounts invested by OCS are considerably lower than those of Canal Plus Group, the OCS investment policy has been distinct from that of its larger rival.
The Autorité’s investigation also showed that subscription video-on-demand platforms are not a sufficiently real or potential alternatives to the new entity, particularly with regard to the challenges of diversity in French film production.
In addition, the Autorité found that the transaction would have led to possible limitations on the availability of Orange Studio’s French catalogue films on the catch-up TV services of free-to-air channels, as well as a possible reduction in the number of channels offered by certain ISPs to consumers in the French overseas territories, as these operators do not have sufficient alternatives for the OCS channels.
Following discussions with the Autorité, Canal has agreed to a number of remedies to protect French cinema; these include the commitment to maintain an OCS/Ciné+ acquisition team dedicated to pre-purchasing first-pay-window French films from French producers, separate from that of Canal+.
Investments must reflect the diversity of French film production, particularly in terms of production budgets and the diversity of talent, filmmakers and types of films financed;
maintain a cost accounting system that clearly separates the costs and revenues of the OCS/Ciné+ team from those of Canal+.
Canal Plus Group has also committed to make, on behalf of the Ciné+/OCS team, pre-purchase proposals for a minimum of 25 French film projects over five years, including at least four French film projects per year.
Launched in late 2008, OCS offers a 4-channel service that features first-run films, screened 6 months after their cinema release, exclusive series direct from the United States, including new HBO series and the HBO catalogue on demand.
