French Broadcasters’ Netflix Rival Gets Go Ahead from Regulators

France’s digital media regulator the Conseil supérieur de l’audiovisuel (CSA), and competition authority Autorité de la concurrence have given the green light to Salto, an over-the-top (OTT) service set to be launched by France Télévisions, M6 and TF1. Having received clearance, the three broadcasters say the subscription video on-demand service will launch in Q1 2020.

Salto was first announced in June last year, and like many of the broadcaster alliances we’ve seen emerge around Europe and America, it is pitched as a response to the likes of Netflix and Amazon Prime. The service is designed to sit alongside, rather than replace, each broadcaster’s existing OTT services (MYTF1 for TF1, 6Play for M6 and for France Télévisions). It will host a selection of dramas, documentaries, news shows, sports and films, and a mix of French content and international content, with some original content planned to be created specifically for the service. At present, the three broadcasters are not planning on running ads on the service, with content only available via paid subscriptions.

The two regulators agreed with the broadcasters’ argument that the initiative is necessary in order to compete with the international digital giants. The CSA said Salto will help the broadcasters’ TV investments become more profitable, given how “the television advertising market is under tension because of the strong competition from foreign, unregulated, digital actors […] like Google and Facebook”.

The Autorité de la concurrence meanwhile has imposed a number of restrictions on Salto, designed to mitigate negative effects on competition. The broadcasters have, amongst other things, agreed to limit the extent to which they’ll jointly buy linear and non-linear broadcasting rights, and to not insert clauses into their linear rights contracts which benefit Salto.

But the three broadcasters seem confident that the restrictions won’t hinder the project. “The launch of the platform will very soon give us what we need to compete against international players in our own territory,” said Delphine Ernotte Cunci, CEO of France Télévisions. “And it will be a new way for the French and European creative industries to engage with their public.”

TF1’s CEO Gilles Pélisson meanwhile said that the competition authority’s ruling is “a very positive sign, because it shows that the authorities are aware of the need to support and accompany industry players in making the innovative changes needed to meet new challenges”. Regulation has at times been an obstacle to these sorts of initiatives – a similar UK-based initiative called Project Kangaroo was scuppered by regulators back in 2009. But attitudes amongst competition authorities seem to be changing in recognition of the pressures TV broadcasters are facing.

The three broadcasters seem set to take on Netflix and its like head on with the launch of Salto. French newspaper Le Figaro reported earlier this year that they’ve struck deals with producers which will allow them to pull their content from services like Netflix and Amazon and reserve it exclusively for Salto instead.

This could prove problematic for Netflix. The company is already having to deal with broadcasters launching rival services in the US, and pulling popular content like Friends and the Office off of Netflix in the process. But Europe poses its own specific challenge – by EU rules, streaming services must dedicate at least thirty percent of their catalogues to local content in markets they’re available in. With TF1, M6 and France Télévisions pulling popular French content away from Netflix and onto Salto, reaching this quota will become more difficult.

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