We have often said that in the Faultline – where technology allows network owners, ISPs, broadcasters and content owners, to all emulate one another – companies all want to “turn into” different types of companies. Never is this more logical, than when a network operator like Orange decides to spend a fortune trying to get into the business of original content. But as far as we can see, it has no choice.
It has created a new entity that it will call Orange Content, ostensibly to run at an arms’ length from the operator business – it aims to strengthen the group’s presence in content. But it has only put in €100 million to fund French TV series for five years. Luckily it’s not Netflix, because our guess is that Netflix will spend more than that in France alone.
CEO Stéphane Richard, Orange Chairman has tried to put it together in a way that will make the money last, added this funding to existing funds for its cinema series, as well as sharing content cost with partners like Canal+.
Not every operator can afford to buy a pay TV company (like AT&T buying DirecTV) and then follow it up with the purchase of a major content owner like Time Warner (a deal AT&T is still waiting on approval for).
Orange was one of the first European majors to invest in IPTV (Maligne TV) with a system that was initially defined by France Telecom and later sold on to Thomson where it is marketed as Smartvision. From here it has labored to rival the largest pay TV footprints in Europe, and still lags behind giants like Sky and Liberty Global, but has done a creditable job. So it didn’t need to buy its equivalent of DirecTV (which might be Numericable) because it had already overtaken it. It is also true that in France there are stronger restrictions on buying your way to a monopoly anyway.
In content it has been a longer, harder road, and Orange and all the rival French Telcos (Cegetel, Bouygues and Free) have had robust relationships with Vivendi’s Canal+ so Orange began by buying sports rights, and then letting them go tamely, then began owning DVB-T broadcasting channels, and started its Orange Cinema Series (OCS), which it pushed on mobile as well as TV, which is in effect a movie channel for France, but it is also available from Bouygues, CanalSat and SFR.
Orange Content was set up in March to strengthen the company’s presence in content and this was the first discussion about new funding. It was set up across the various Orange country operations, so that it could advise across the board on content negotiations and also bring together the efforts of movie production company Orange Studio, OCS and post production firm OPTV (Orange Prestations TV).
The subsidiary’s strategy will take in strategic intelligence, interpreting of trends and the industry; acquisition of rights; the development of a new production unit together with Orange Studio and OCS; the creation and evaluation of new formats – for this read virtual reality with the Group’s various internal stakeholders and external partners and monitoring what’s happening in each country’s lines of business.
But growing all these activities from scratch imposes a uniquely Orange culture onto them, as opposed to AT&T buying Time Warner, or if Orange was to somehow acquire Canal+.
To stretch the money the company will enter into some TV series co-productions and priority will go to investing in cinema. Orange says it will reinforce its relationship with Canal+ distributing Canal+ product through its TV channel. It will also offer a double play here of fiber with the new Canal+ offering, Essentiel.
In 2013, Orange Cinema Series had committed to invest some €179 million over five years on French and European cinema and that funding is still in place.
Orange last year also signed a distribution deal with UGC Images, a subsidiary of Europe’s second-biggest cinema circuit, to kick off direct-distribution operations in France and has now extended this to include the films which UGC Images will produce in 2018, showing on Orange just a few months after theatrical release.
Orange also said that it now had an exclusive partnership with French bookshop Fnac to bring the best of digital reading to Orange customers, which will kick off with the Izneo’s comic strip which gives unlimited access to over 3,000 comic strip titles on smartphone, tablet and PC/Mac.
You can imagine that if the dominant operator in France is making these kinds of content moves, that other operators there feel compelled to offer something similar, and Altice stepped up this week to launch a new French premium TV channel dedicated to movies and TV series called Altice Studio in what is a clear copy of what Orange has done with OCS.
The new channel will supplement existing entertainment services SFR Play and the French operator’s SVoD service as well as channels from NBCUniversal and Discovery, which are exclusive with SFR in France.