French broadcast regulator the Conseil supérieur de l’audiovisuel (CSA) has rejected applications from three channels to migrate from pay-TV channels on France’s digital terrestrial TV platform to become free-to-air .
The three channels – LCI, Paris Première and Planète + – had sought to change their funding status under provisions that allow the CSA to permit the migration of a pay regime to free or vice versa.
In taking the decision, the CSA assessed a number of factors: respect for the fundamental requirement of pluralism, the balance in the advertising market and the promotion of quality and diversity of programmes. In this respect, the Council must ensure sufficient diversity of operators.
The CSA examined these factors in terms of their competitive and editorial effects, as well as assessing their economic impact on all audiovisual sector players, especially in terms of advertising revenue share.
The CSA focused on the economic elements of the following assessment:
The state of the advertising market;
The financial position of existing free DTT channels;
The supply and consumer demand for television.
According the the CSA, the state of the advertising market is characterised by a sharp drop in advertising revenues for television services. The Council noted that no significant market recovery is expected in the short term and the medium term outlook still remains uncertain. It felt that the arrival of one or more additional free channels could not now be sustained by a growth of the advertising market.
It considered the financial situation of several free channels was still fragile, especially those that are not backed by a large group. Moreover, the HD channels authorised in 2012 were in the growth phase and had not yet reached their maturity and economic stability.
In terms of supply and consumer demand for television, the CSA believes that the arrival of one or more additional free channels in a landscape already composed of 25 channels constituting a wide range, should not result in a significant increase in television usage and would result in the audience shifting at the expense of existing free channels. It noted that with television consumption stagnating, it was not possible to predict a reversal of this trend in the medium term.
In addition, an analysis of each application, and foreseeable consequences, suggested that despite their appeal and quality, all were likely to create problems and imbalances affecting the preservation of editorial diversity of channels currently broadcasting on DTT.
In respect of the application of LCI, the Council noted that the arrival of a third continuous free news channel exclusively financed by advertising could destabilise the existing two news channels, one of which is recently reached break-even with the other operating at a deficit;
With Paris Première, the Council felt that it would be likely to affect the economic and financial viability of free DTT channels with a similar format and audience;
For Planète +, the Council felt that the arrival of a second documentary channel appeared premature given that the service, which began broadcasting in 2012, had yet to break even.
Although it said that current conditions were not were not conducive to approving the requests to go FTA, it said that more favourable market conditions may warrant a review in the future. Accordingly, the CSA will take into consideration technical and financial conditions of distribution which will be offered to existing operators.
In a statement, the Canal + Group – operator of Planète + – noted the CSA’s decision, which it described as “wise and responsible” because it rightly took into account the overall economic balance of DTT in France.
LCI – operated by French commercial broadcaster TF1 – said it noted the decision not to allow it to migrate to free-to-air digital terrestrial TV and was examining a possible recourse to legal proceedings in the competent courts. It said the decision could well cause the closure of LCI.