Canal+, the pay-TV enterprise of French media and telecom conglomerate Vivendi, on Monday shared its core beliefs and enterprise methods forward of its deliberate cut up from Vivendi right into a separate inventory listed in London. Amongst them are a perception within the energy of the Paddington franchise, its “super-aggregation technique,” which CEO Maxime Saada in comparison with judo, and price and spending self-discipline.
”I’ve seen competitors come and go. The one frequent thread to all of those rivals: overspending,” Saada advised the agency’s capital markets day in London, which was dwell streamed. “I consider you reside or die in the mean time you signal the test. On content material, on expertise, on M&A, overspending is what kills firms in our enterprise. At Canal+, we don’t consider in what some would name ‘strategic spending that doesn’t have a transparent constructive influence on P&L (revenue and loss statements).”
That was one in all eight core beliefs the CEO highlighted on Monday. “Pay-TV is a pretty and rising market,” is one other. “We now have intentionally expanded Canal+ to 52 international locations on three continents,” Saada emphasised. “The one factor that these markets have in frequent: all of them are rising – for various causes … however all of them are rising.”
A 3rd core focus is a various content material slate. “Our multi-content worth proposition is exclusive, and it’s a profitable method for 2 causes,” the CEO defined. “One, providing cinema, collection, sports activities documentaries, youngsters packages, combining native and world content material and mixing third-party and in-house content material permits us to fulfill every member of the family and maximize satisfaction, common income per consumer (ARPU) and loyalty. Two, this diversified multi-content method allows us to cut back our dependency on any given kind of piece of content material.” He cited the examples of the COVID pandemic, when sports activities weren’t out there on TV, and the twin Hollywood strikes, when the agency was missing U.S. originals as key examples.
Agility is yet one more core Canal+ perception. Regardless of a presence in additional than 50 international locations and 27 million subscribers, the agency depends on quick decision-making, Saada stated. “I consider velocity is essential, and so is the power to alter course when required,” he stated. One instance is how the corporate approached the emergence of subscription video on-demand platforms. “Once they emerged, we didn’t see a risk. We noticed a chance, and we seized it,” the Canal+ CEO stated. “Like in judo, we’ve used the power of others to our benefit in our super-aggregation technique.”
One other core technique of the Canal+ crew is that “controlling distribution is completely important,” he famous. The identical is true for the assumption that “scale and an area method complement one another.”
The ultimate two strategic focuses are of a special kind. “Our seventh core perception is that as a media firm, Canal+ has a particular accountability that extends past monetary efficiency to incorporate our influence on the surroundings and society,” Saada advised the occasion. ‘Lastly, core perception quantity eight, we consider in Paddington.”
The well-known bear from Peru then appeared on display screen with some extra data touting Canal+ after mentioning he was at the moment in his homeland, through which the upcoming third characteristic movie, Paddington in Peru, is about.
Saada on Monday additionally talked about Netflix a number of occasions. Over a decade in the past, when he ran advertising and marketing, pay-TV penetration in France was secure at round 30 %. “The fact was, we hit a wall,” he recalled. “We merely didn’t show our means to develop the market. Our development potential was completely constrained. Then, Netflix arrived with a brand new worth proposition, low value, no dedication, and a powerful consumer expertise, and was later joined by Amazon, Disney+, and others. Consequently, these platforms satisfied a completely new spectrum of the inhabitants to do one thing they’d by no means completed earlier than – pay for content material.”
And he emphasised: “Pay-TV penetration in France jumped from 35 to 71 % over the past eight years. SVOD platforms actually doubled the scale of the market.”
Netflix and different streamers are being provided on Canal+ as third-party streaming platforms. “In 2016, I went to Los Gatos to fulfill with [Netflix boss] Reed Hastings,” Saada advised the investor occasion, quipping: “Sure, I did go to Los Gatos.”
What did he say? “I argued that though we may very well be perceived as rivals, we had been truly on the identical facet, encouraging individuals to pay for content material,” the Canal+ boss recalled. “Consequently, Canal+ was one of many first operators, and definitely the primary incumbent, to hold Netflix on its platform. This was the primary of many agreements we signed with streaming platforms. However these aren’t easy carriage agreements. They’re true partnerships.”
Having these streaming partnerships along with free-to-air networks, fundamental pay-TV channels, and premium in-house channels differentiates Canal+. “This place isn’t replicable by different rivals,” concluded Saada.” Netflix won’t carry Apple TV+ or Max or Paramount+. It is a key aspect of our positioning.”
The supervisory board of Vivendi, led by chairmanship Yannick Bolloré and CEO Arnaud de Puyfontaine, just lately accredited a plan for a cut up into 4 firms, with shareholders set to vote on it on Dec. 9. If accredited, it’ll result in the separation of Canal+, promoting powerhouse Havas and publishing agency Louis Hachette Group, which consists of the agency’s 66.53 % stake in Lagardère and full possession of Prisma Media, from Vivendi. Bolloré will function chairman at Canal+, with Saada remaining CEO.
Vivendi early on Monday had additionally stated that Canal+ expects income development for 2024 to be “broadly in line” with 2023. Income for 2025 will “develop organically however this development can be negatively affected and barely greater than offset by the anticipated finish of broadcasting of its French free to air channel C8, and the termination of sub-licensing contracts and of onerous third-party content material contracts in France.”Over the medium time period and assuming an unchanged asset combine, Canal+ expects its income to develop “reasonably,” the agency added.
In the meantime, additionally over the medium time period, Canal+ expects adjusted its earnings earlier than curiosity, tax, and amortization margin “to proceed to enhance reasonably on account of price optimization, working leverage, and the anticipated transition to profitability of newly built-in property transferred from Vivendi,” the corporate stated. Plus, money circulation from operations is for 2025 projected to return to a stage much like that of 2023 after a success in 2024 “resulting from an distinctive focus of funds following current content material contract renewals and signatures and potential non-recurring funds in respect of proposed tax changes.”
The Canal+ steerage got here with one massive caveat. If its proposed acquisition of management of African pay-TV large MultiChoice does get accomplished, this “would considerably influence the monetary profile of the group within the medium-term in Africa and total, including a income development engine whereas offering potential vital price synergies,” the corporate stated.
Vivendi has stated that its separation plan is designed “to completely unleash the event potential of Vivendi’s completely different actions,” including: “The group has endured a really excessive conglomerate low cost because the distribution and itemizing of Common Music Group (UMG) in 2021.” The brand new shares are set to begin buying and selling on Dec. 16.