Market Watch

Paris Goes Digital


Display Driver IC Forecast


Analogue terrestrial television was switched off in the Ile de France region - which includes Paris - on 7 March 2011. There were no major disruptions. Ten of the 24 mainland regions of France have now been switched off and TV regulator CSA said the remainder are on target to go digital this year, according to plan. The last region to switch off should be Languedoc Roussillon, in the South of France, in November 2011.

CSA gave some guidance on the reallocation of spare frequencies from 2012; TF1, M6 and Canal Plus will be allocated new digital terrestrial television (DTT) frequencies but these will not be operational before mid-2012.

Analysis
The CSA and the French government are currently addressing the European Commission objections about the automatic allocation of additional frequencies to each of the three incumbent commercial analogue terrestrial broadcasters (TF1, M6, Canal Plus). Assuming France and the EC come to an agreement on the terms of reallocation, the CSA is still planning to allocate new frequencies to the three groups at the end of the year, but said the new channels could not start broadcasting before mid-2012 at the earliest, for technical reasons.

The CSA also confirmed that further capacity will be allocated and new calls for proposals will be open to other licence holders and newcomers, in the form of beauty contests. However, French law provides that the CSA priority should be to use extra capacity to upgrade more existing DTT channels from SD to HD rather than license brand new channels for SD DTT distribution.

So far, free DTT channels are a hit in terms of penetration and audience share. Those controlled by TF1 and M6 have seen their advertising sales growing by 20 per cent to 40 per cent in the last few years and contributed significantly to the recovery of ad revenues of both groups in 2010. As a result, multichannel ad sales increased by 64 per cent for TF1 and 17 per cent for M6 last year and now represent eight per cent and 16 per cent of their net domestic TV advertising revenues (NAR), respectively. The surge for TF1 was also the consequence of its acquisition of TMC and NT1.

Free DTT channels are expected to keep growing in audience and NAR in 2011-2012 while the overall ad market slows down. None of the three incumbents has revealed which channel in their portfolios they may pick to be broadcast with their additional DTT frequencies, but TF1 has recently hinted that TV Breizh, currently a basic cabsat channel, was a possibility.

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