Will Salto OTT approval trigger salty French operator backlash?

Fervent campaigning from French operators such as Free have fallen on deaf ears as the OTT video platform Salto was approved by local competition regulators this week. But will the broadcaster-fronted initiative have a similar disruptive impact as Free when the French ISP entered the mobile market? Either way, we doubt Salto’s opposers are done protesting just yet.

France Télévisions, TF1 and M6 have been granted the green light by the French Competition Authority to unleash Salto on the streaming market in the first quarter of 2020 – signaling yet another delay. Entering a fiercely contested market, Salto cannot afford many more delays, having initially been pegged for launch earlier this year, before being held back to Q4 and now further to early next year.


Following the service’s approval, it has been established that Salto will not only serve as a paid SVoD service but also stream linear channels and catch-up content from the three broadcasters, who will have to abide by strict cross-promotion limitations and other concessions.


In order to smooth over regulators, Salto had reportedly been considering concessions, including placing a 40% limit on how much non-movie content can be supplied exclusively by the three parent broadcasters. While this specific concession is unconfirmed for now, what we do know is that Salto is unable to ink exclusive carriage deals with linear DTT channels and the three broadcasters must make all DTT channels and associated services available to third-party distributors.

The French competition watchdog is wary of the potential of Salto to veer into anticompetitive waters and reap havoc on the market – spearheaded by three companies with significant content assets and reach. However, regulators reckon there is little premise for Salto to have an adverse impact on the pay TV market, which echoes the view of the European Commission which handed the case down to the French authorities on the grounds Salto had limited bearing on competition outside the country.

It’s unclear at the moment on the specificity of such concessions, beyond the joint venture committing to preventing anti-competitive practices in the commercialization of TV channels, the distribution of pay TV services, the advertising market and rights acquisition.

The combined effort has, somewhat melodramatically, been described as creating a “cartel” which will ultimately have a stranglehold on content, as described by a rather salty Free.

It has only been a natural transgression that broadcasters would want to get back in on the act and this type of reaction against Netflix has been a common theme in Europe throughout the past year as regulators have loosened draconian views on local content powerhouses launching streaming competitors. Another major OTT video initiative, 6Play from RTL-owned media firm M6, will bring additional pressure on the French marketplace, although this is being prepared for launch outside of France as well as within. There is a possibility however that Salto will eventually usurp 6Play.

It’s no wonder then that Salto has received its share of opposition, tapping into a lucrative French SVoD market which our research arm Rethink TV values at $2 billion by 2023, third only to the UK and Germany both at $2.6 billion.

Elsewhere in Europe, the BBC has joined forces with commercial FTA rival ITV to launch BritBox by the end of 2019, attempting to create what the iPlayer should have been by initially showing archive shows from both broadcasters before moving on to create new shows. With a combined annual budget of about $75 million a year for the first two years, it is almost up with what Netflix and Amazon are spending on UK productions.

In terms of subscribers in the French SVoD market, Netflix today boasts approximately 3.3 million homes, projected to double in 4 years’ time. Meanwhile local pure play SVoD players VideoFutur, Rakuten, FilmoTV and Molotov remain strong, and are just about still growing. Molotov claims 5 million downloads, and 500,000 regular users, but fewer in the paid zone, which we estimate at 180,000 today, and still rising aggressively. Molotov is the subject of a partial takeover from Altice SFR-Numericable.

“Our channels are popular with French people, our content is attractive, and our technology is very advanced – all reasons to welcome the forthcoming launch of an ambitious joint offer like Salto,” said M6 chairman of the executive board Nicolas de Tavernost.