French Connection

Steve Clarke provides an in-depth look at the latest developments in the French media sector.

In an era of smart technology, binge-viewing and on-demand content, TV watching has changed beyond all recognition—except, perhaps, in France.

At 9 p.m. on an average Sunday evening, it’s commonplace for French families to gather in their sitting rooms and watch TV together. Are they enjoying a reality show or an entertainment format, or maybe a hit U.S. drama like Game of Thrones or The Walking Dead? No, they are viewing a French movie, and doing so on a traditional terrestrial network.

In 2014, 42.5 percent of all films broadcast on French TV were French, according to CNC (Centre national du cinéma et de l’image animée). Meanwhile, Hollywood movies accounted for 37.4 percent of films shown on French TV. The local movies, however, generated the largest audiences.

SPEAKING FRENCH
“Last year three of the top ten most popular programs on French TV were domestically produced feature films,” says John-Paul O’Sullivan, an analyst for Europe at SNL Kagan.

“There was one American series, The Mentalist, in the top ten and one reality show, a local adaptation of The Voice. Miss France, the beauty competition, was a top-ten program. So was the TF1 flagship cop show Profilage (Profiling). Despite declining audiences for the historic channels like TF1, French movies can achieve a 50-percent share of viewing, as up to 13.5 million people tune in.”

His colleague Mohammed Hamza, TV and video analyst for Europe at SNL Kagan, adds, “The French are very culturally minded. Unlike in the U.K. and Holland, there is less of a shopping culture [in France]. Local content is high quality and there is no shortage of it. STUDIOCANAL produces a lot of high-end content.”

The French remain a nation of TV addicts. Make no mistake, they still love imported drama, especially crime shows, and not only American ones. In 2014 the first season of the British thriller Broadchurch was a big success for France 2.

The levels of TV consumption per person in France are higher than the global average, according to Jonathan Barnard, the head of forecasting at ZenithOptimedia.

The allure of TV may reflect the grim state of the French economy. It grew by just 0.6 percent in the first quarter of 2015 following zero growth the previous quarter.

Last year the typical French viewer spent 243 minutes a day watching TV. This was up on 239 minutes in 2010. Worldwide viewing declined, says ZenithOptimedia, from an average of 196 minutes a day in 2010 to 184 minutes in 2014. “Consumption of TV is holding up well in France,” Barnard observes.

Nevertheless, the media agency suggests that French TV viewing peaked in 2013 at 244 minutes a day. This is predicted to decrease to an average of 234 minutes a day by 2017.

To put this into context, even in the online age TV remains the biggest of all French media by a considerable margin. In 2014 French people spent on average 113 minutes a day on the internet—less than half the 243 minutes occupied by TV consumption. “When people have less money, they are likely to stay in and watch TV,” says Barnard.

WINDS OF CHANGE
This is not to say the French TV market is immune to the changes—prompted by digital fragmentation, online platforms and the growth of HD channels—that are affecting all mature TV markets. In recent years, competition for eyeballs has mushroomed in France. Alongside this trend, the advertising market broadly continues to flatline.

French TV advertising is doing marginally better than the overall advertising market, which is expected to shrink by 0.1 percent per year between 2014 and 2017, according to ZenithOptimedia.

In 2007, on the eve of the meltdown in Western European economies, the French TV advertising market was worth €3.6 billion. By 2013 it had fallen to €3.2 billion. In 2014 the figure was still €3.2 billion. In the last quarter of 2014, TV advertising picked up. The trend was confirmed in the first three months of 2015. ZenithOptimedia is forecasting growth in French TV advertising of 0.2 percent for the period from 2014 to 2017. Broken down, this represents growth of 0.3 percent this year and 0.2 percent in 2016.

This fall’s Rugby World Cup, which kicked off in September, was expected to give a lift to the market. French elections later this year will help, too; there are votes for regional politicians. Similarly, next year’s Summer Olympics in Rio de Janeiro are expected to stimulate the ad market. France Télévisions and CANAL+ have the rights.

However, “the underlying French economy is weak, and there is a lack of confidence in the business community,” says ZenithOptimedia’s Barnard. “People don’t expect the recovery to be sustained, and that holds back investment in advertising.”

He adds, “The French advertising market is deflationary. Advertisers can maintain their targets without increasing spending.”

In the TV sector, DTT is where the growth lies. The segment is ahead of the economy as a whole. DTT advertising increased by 2.2 percent in 2014 and is expected to increase by 2.3 percent this year.

This uptick, however, came from a low base. It is a result of the newer channels taking money from legacy analog channels.

Overall, advertising revenues on the traditional analog channels were down by 0.6 percent last year. This compares with a forecast decline of 0.4 percent in 2015. “There’s been a bit of an improvement,” says Barnard.

Meanwhile France’s well-established public-service channels, under the umbrella of France Télévisions, are financially challenged—albeit not to the extent of the U.K.’s BBC.

DTT arrived relatively late in France. So did Netflix, which launched in September 2014. But, paradoxically, the French VOD market is crowded. The “grandes chaines nationales”—TF1, France 2, 3 and 5, ARTE, CANAL+ and M6—remain dominant, even as their share of viewing continues to slowly decline. In 2007 the heavyweights secured an 83-percent peak-time viewing share. By 2014 this had declined to 64 percent, much of it due to the massive inroads made by the free digital terrestrial channels; these networks increased their share from below 6 percent to 24 percent in the same period.

Since the end of 2012, all the main French TV networks have launched their own DTT spin-offs. The new additions increased the 19-channel Télévision Numérique Terrestre (TNT) offer to 25, covering all of France. Digital switchover was completed in November 2011.

TF1 and M6 each debuted one new channel apiece, devoted to drama and family programming, respectively. DTT operators NRJ and NextRadioTV were given the green light for the female-skewing channel Chérie HD and the documentary service RMC Découverte. Also launched in 2012 was the sports channel L’Equipe HD, originating from the sports daily L’Equipe, and an independent channel promoting diversity, an issue at the top of French media regulator CSA’s agenda. Pay TV is led by CANAL+.

WHAT’S HOT
Fiction, including feature films, remains the leading program genre in terms of content and viewing. Audience measurement firm Médiamétrie calculated that the free-to-air national channels, including TF1, France 2, France 3, France 5, M6, ARTE, D8, W9, TMC, NT1, NRJ12, France 4, D17 and Gulli, aired 39,100 hours of drama in 2014.

As indicated previously, American drama is crucial to the mix. “U.S. series are very popular in France,” says Bertrand Villegas, a co-founder of The WIT. “It’s more than The Mentalist, although Simon Baker is a big star in France. The CSI franchise, Grey’s Anatomy, Elementary and Hawaii Five-0 are all strong performers. ABC’s police procedural Castle is a big show for France 2.”

It says a lot about the popularity of American scripted shows that The Mentalist remains one of the most-watched programs on French TV. In the U.K. it is rare to find a single American show in the top 100 network programs.

For years U.S. drama has been a mainstay of the most-watched French channels. Local producers have found this depressing and demoralizing, especially since France has a generous public support system for TV and film production.

FAVORED FICTION
Of late, however, French scripted shows are beginning to challenge their U.S. rivals. “The success of domestic drama is growing on France 2, with shows such as Chefs and Les Témoins,” says Avril Blondelot, international research manager at Médiamétrie. “In 2010 American series like The Mentalist, House and Criminal Minds were leading ratings charts. In 2014 The Mentalist is still there, but in the top three are the French shows Profilage and Nos chers voisins.”

Profilage, the well-travelled TF1 series that launched in 2009, continues to perform well despite intense competition. The program’s audience has grown year on year, peaking last December when the series finale attracted an average of 8.6 million viewers and a 31.2-percent share. When TF1 demoted MasterChef to digital channel NT1 earlier this year, the broadcaster replaced the cooking contest with reruns of Profilage.

Another prime-time hit TV drama is the more recent Chefs, the story of a young offender who leaves prison to work in a Paris restaurant. The series features French actor, screenwriter and director Clovis Cornillac. Chefs, which made its debut in February, has achieved an average audience of 4.4 million (an audience share of 17.1 percent) for France 2.

A further example of the move towards French-made fiction is the success of the noir thriller Les Témoins (Witnesses),  starring Thierry Lhermitte, for France 2; its premiere won an audience share of 17.4 percent.

Of the big terrestrials, youth-skewing M6, owned by RTL Group, is the most vulnerable to the myriad viewing options that emerged in recent years. In 2014, M6 recorded its lowest audience share since 1991. Signs of the broadcaster’s troubles included the decisions to axe Israeli entertainment format Rising Star and relegate high-profile drama Empire to niche station W9.

“M6 needs to find some new hits,” explains The WIT’s Villegas. “The channel has not invested in locally-produced scripted shows. M6 used to do better in the days when French versions of reality shows like Supernanny and Come Dine with Me were very popular.”

OTT ARRIVES
It is the lack of a strong library of French fare that appears to be limiting Netflix’s success in the French market. Outside France, Netflix’s marketing is based on the global appeal of high-end U.S. drama. Think of the landmark remake of the BBC’s House of Cards starring Kevin Spacey and the buzzy hit Orange Is the New Black. In France, however, domestic pay box CANAL+ secured House of Cards. “It’s not easy for Netflix in France,” says Médiamétrie’s Blondelot. “There were a lot of local players already in place when Netflix entered the market.”

With a three-year holdback on digital rights and strong competition from rival VOD platform CANALPLAY, establishing Netflix in France looks unlikely to be easy. SNL Kagan’s Hamza points to the stipulation that features can’t air on VOD services until three years after their pay-TV run. “There is pressure on French regulators to do something about the situation,” explains Hamza.

Netflix had 500,000 subscribers in France by the end of 2014, compared with 3.3 million in the U.K, according to IHS.

The platform has high hopes for the arrival of the French-language crime drama Marseille (created by the Parisian novelist Dan Franck, co-writer of the critically acclaimed miniseries Carlos), hyped as a Mediterranean version of House of Cards.

“Netflix’s impact on more traditional TV platforms in France is likely to be slow,” insists Barnard at ZenithOptimedia. “Netflix is unlikely to depress overall viewing levels at linear services in the near future.”

This is potentially good news for pubcaster France Télévisions, whose two main channels, France 2 and France 3, achieved audience shares of 14.1 percent and 9.4 percent, respectively, in 2014. In 2010, the networks’ shares were 16.1 percent and 10.7 percent.

“There are huge funding difficulties for France Télévisions,” says Mathieu Béjot, the executive director of the trade association TV France International (TVFI). He notes that the French license fee, of €136, “is one of the lowest in Europe.”

France Télévisions is funded by a mix of license fees (70 percent of income), advertising (banned after 8 p.m. since 2009) and public funding (around 7 percent of income).

On the agenda of the pubcaster’s new president, Delphine Ernotte, who started work in August, are digital expansion and negotiations with the government to alleviate the financial pressure. The strength of French labor unions prevents job cuts—apart from those triggered by voluntary retirement. (Compare this to the BBC, which has announced a round of layoffs to cope with its funding challenges.) As such, Ernotte will have to seek out other ways to tackle her budget shortfall.

In such an economically challenged but culturally proud and insular country as France, the opportunities for co-production are limited. Recently, however, there are signs of new activity that go beyond French collaborations with their French-speaking Belgian neighbors. Many in France hope its prestigious production sector can emulate the Scandinavians and initiate dramas that are big hitters in the global market.

TRAVELING ABROAD
Pay-TV outlet CANAL+ is a regular co-production partner with a distinguished track record, thanks to shows like The Tunnel and Borgia. In May an ambitious new project was announced with the working title The Young Pope, starring Jude Law as a fictional pontiff who is Italian American. His co-star is Diane Keaton. CANAL+’s collaborators are HBO and Sky.

ARTE, too, is investing in scripted shows, France 2 was a partner on BBC Worldwide’s Death in Paradise and TF1 is on board STUDIOCANAL’s international co-pro Crossing Lines.

Production costs are such that for premium serialized drama, co-funding is essential, but one dilemma for French co-producers is whether to make the shows in French and limit their international appeal or film in English to maximize international traction.

In the past year or so, the biggest co-pros have included CANAL+’s English-language Versailles, budgeted at around €27 million and reputed to be the most expensive French TV series ever; and The Last Panthers, a co-production with Sky that will have its world premiere at MIPCOM.

“To avoid the classic Euro-pudding, it is important to have a lead partner, rather than four or five partners,” TVFI’s Béjot says.

This is not a problem for French filmmakers and their captive Sunday night audiences.