As part of a strategy to rein in its investment in content, France Telecom is seeking investment for its French pay TV channels. The company is willing to sell up to 50 per cent of the equity in the channels, including Orange Sport and Orange Cinema Series, which have proved costly. As well as a €208m a season contract for rights to Ligue 1 football, France Telecom has long-term deals for exclusive first-run movies from Warner Bros and Gaumont. The new strategy forms part of the company's 'Conquêtes 2015' five-year plan, which includes company policies for direction on TV, mobile, NGN and NGA investment.
Gaining investment in the channels may prove to be difficult. France Telecom has publicly stated that it will not be bidding exclusively again for blocks of the French Ligue 1 soccer rights when they become available for renewal in 2012, and would only consider such an option as part of a joint bid. Uptake of the sports and movies channels has not been meteoric, with combined subscriptions of just over 700,000 since their 2008 launch (25% penetration of the Orange TV subscriber base). This is of note principally when considering the low subscription prices charged for the channels (€6 per month for the soccer coverage in particular), which were aimed at encouraging new subscribers to take Orange triple-play services, generating revenue for the business in other divisions. Lacking that incentive, any investors in the sports channels will likely have to rethink the business model behind them.
Other issues faced by Orange in selling its premium bouquets have arisen from a regulatory standpoint. Although appealed successfully by France Telecom in 2009, the Commercial Court of Paris ruled that the sale of channels on an exclusive basis bundled with broadband and telephony was anticompetitive. Although the sale of 50 per cent of the channels' ownership may mitigate circumstances for France Telecom, there still remains the question as to whether competition authorities will uphold the original decision.
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