French streaming service Salto is at death’s door, with its three broadcast owners now meeting by the end of the month to decide the sentence. Faultline never held high hopes for the service, which now appears firmly on the chopping block – an immense fall from grace. French outlet La Lettre A broke the news, which has seemed a long time coming.
However, the writing was definitely on the wall, when TF1 and M6 announced that they had abandoned their merger plans, back in September. Given Salto’s apparent national strategic importance, there will have been many sleepless nights among the Salto leadership, which has at times seemed out of touch.
The French state has long held an existential concern with the influence of foreign countries on France’s cultural identity. It has a regulator that ensures English words do not creep into daily usage, and somewhat emblematic of that habit was Salto’s January declaration that Netflix and Amazon buttons on TV remote controls represented “crazy competitive asymmetry.”
“We have lost control over the exposure of our content, our services, and all the stories we tell the French,” proclaimed Salto CEO Thomas Follin.
Faultline does not tend to go in for leadership analysis, but there were definitely more pressing concerns at the time for Salto than such buttons. Follin’s position reflected the national interests in Salto, which was established to promote French content from overseas incursions.
Salto’s much-delayed launch was in 2020, where it was priced at some $7 a month – housing 19 channels of on-demand content. Linear TV channels were included, with the top tier package hitting $13 monthly. It struggled to pick up subscribers, hitting 523,000 in June 2021 and around 700,000 back in January. In March 2022, it was valued at some $135 million.
Public broadcaster France Televisions was not best pleased when the commercial channel providers TF1 (owned by Bouygues) and M6 (owned by RTL Group) announced merger plans in May 2021. It caused France Televisions’ president Delphine Ernotte to announce plans to exit Salto, with TF1 and M6 agreeing to buy France Televisions’ 33% stake out once the merger was approved.
Unfortunately for Salto, the merger was recently abandoned, due to anti-trust concerns, and the arrival of a new leader at TF1 is not good news for Salto. Rodolphe Belmer is due to become TF1’s president in February, and is currently managing director. Belmer confirmed that he considered exiting Salto soon after arriving.
Both M6 and TF1 already have streaming services. In October, M6 announced that it would be launching 6play Max, a mostly ad-free version of its 6play AVoD service, costing $3 a month. Bedrock was the technology partner, housing some 6,500 hours of video content.
This week, TF1 announced a smart TV partnership with Samsung, to make its MYTF1 Max service available through the Samsung app store. That service houses live TV channels and on-demand content in a subscription package. The regular MYTF1 AVoD service is also being made available. TF1 has around 4,900 hours of content here.
As such, it seems that France Televisions might be the best home for the platform, despite its apparent attempts to jump ship. It seems a reach to think that either TF1 or M6 are enthusiastic about keeping Salto alive, but France Televisions does seem to have a streaming hole in its portfolio.
However, its channels and content crop up in the other French OTT services, and so France Televisions is also unlikely to try and keep Salto on life support. Given its public ownership, in the current economic climate, the state accountants would likely heavily scrutinize such a plan.
France has strict rules on the ratio of foreign to homegrown content available in on-demand catalogs, and the merger between TF1 and M6 was supposed to be a way to ensure that these rules were upheld, for fear that popular US shows would gradually erode this ratio until quality French content becomes a forgotten niche.
Salto’s sluggishness was in part due to its owners being stalled by digital rights negotiations with independent producers, which are no longer allowed to sell their shows to the global SVoD giants. It was initially hoped that a TF1-M6 merger would create an organization capable of increasing content investments.
The announcement of the abandonment of the merger fired a few shots at the French state. “Following the debates with the authority and despite the additional remedies proposed, it appears that only structural remedies involving at the very least the divestment of the TF1 TV channel or of the M6 TV channel would be sufficient to approve the proposed merger.”
“The parties have therefore concluded that the proposed merger no longer has any strategic rationale. The parties regret that the competition authority did not take into account the speed and extent of the changes sweeping through the French broadcasting sector. They continue to firmly believe that a merger of the TF1 and M6 groups would have provided an appropriate response to the challenges resulting from the increased competition from the international platforms.”