Canal+ blames telcos, sports, myCanal for massive workforce cull

Despite claiming the contrary, Canal+ is in total turmoil. Revealing plans to slash 500 workforce positions this week, the French pay TV outfit has dressed up the contentious move to cull 20% of staff as part of a “transformation project” and “rationalization plan” – fanciful and frankly misleading terms which help absolutely no one.

The Vivendi-owned group has been visibly exasperated by the changing media landscape for some time now. The realization only seemed to hit home however after Netflix recently surpassed Canal+ for subscribers in France, blasting past 5 million subs. Importantly though, we need to grasp what’s next for Canal+ and how this “transformation” will impact the market. For the moment, Canal+ has outlined a roadmap prioritizing international activities and a digital shift which aims to provide clients with original and renewed experiences.

Presumably this relates in part to Canal+ Series, the recently revamped version of failed SVoD platform CanalPlay, which has undercut Netflix in the process. And despite Canal+’s unfavorable financial position, the group is still committing to spending some $3.2 billion plus a year on content, albeit a fraction of what it once spent and a drop in the ocean of Netflix’s budget.

Canal+ Series is a much more slimmed down and focused venture distributing just series, including both local and international content, and so in a way is going even more directly against Netflix. However, Canal+ CEO Maxime Saada insisted that lessons had been learned to complement Netflix by offering different local content, albeit with the same model around a low-cost subscription. The decision to stream just series was also motivated by the fact that French streaming rules are much more permissive for those than movies.

In keeping with others, Canal+ has sought to exploit Netflix’s recent price hike and set the price just lower, charging €7 a month to stream in HD and 4K on one screen at a time, or two screens at €10 and four screens €12. Netflix in France costs €8 for the basic package, €11 for HD and two screens, and €14 for 4K and four screens.

Of course, it comes down to content and if many consumers see Netflix as essential and Canal+ as a nice to have extra then the lower pricing may not count for much.

Canal+ also addressed its pitfalls in a statement this week, citing failed projects including catch-up platform myCanal, partnerships with telcos Orange and Free which never panned out, the introduction of a basic €20 a month subscription offering to stave off cord cutting which flopped, and the nail in the coffin which was losing out on key sports rights. “Unfortunately, these initiatives have proven insufficient in face of a full-blown digital revolution and the arrival of global platforms, that had been digital and international from the outset,” read a Canal+ statement.

“The Canal Plus Group has been committed to redefining its growth model for several years in order to become a world player for French and European culture,” it said in a statement.

In the meantime, Canal+ is reportedly preparing a $1.1 billion swoop for pay TV provider M7, which would provide Canal+ with in-roads into Austria, Belgium, the Czech Republic, Hungary, the Netherlands, Romania and Hungary.

M7 at least has a number of OTT assets which will sweeten the deal. M7’s brands are Skylink in Eastern Europe, Diveo in Germany, TeleSat and TV Vlaanderen in Belgium, HD Austria, plus a duo of Dutch assets in the form of Canal Digitaal and, offering a mixed bag of satellite TV, OTT and TV Everywhere options. A number of these brands are triple play operators with established broadband subscriber bases, which adds significant value.

So, with Canal+ essentially blaming a woeful set of strategic partnerships and service launches as reason for these dire straits, it’s beggar’s belief that Canal+ even has the audacity to resurrect CanalPlay under the guise of Canal+.