French cinema world eyes Canal Plus purge with concern

The French cinema world is reeling after a whirlwind round of executive firings and hirings at Canal Plus ordered by its new chairman Vincent Bolloré, the billionaire majority shareholder of its parent company Vivendi.

The pay-TV station’s head of cinema Nathalie Coste-Cerdan became the latest executive to be shown the door by Bolloré last Friday, following in the footsteps of Canal Plus Group chairman Bertrand Meheut, CEO Rodolphe Belmer and a dozen or so other heads of department. 

“We were shocked to learn of the departure of Nathalie Coste-Cerdan,” said Juliette Prissard-Eltejaye, MD of France’s Independent Producers’ Syndicate, Le Spi.

The organisation, which represents 400 independent producers, was due to issue an official statement alongside a number of France’s other producer bodies this week.

“She was highly respected, a true cinephile and believer in ‘auteur cinema’,” added Prissard-Eltejaye.

“A lot of our members are involved in auteur cinema and first and second time films. She was a long-standing and supportive partner with le SPI.”

Coste-Cerda, who joined Canal Plus in 1995, took over the reins of head of cinema from Manuel Alduy having worked in various roles in the cinema department from 2004.

Her replacement Didier Lupfer – whose arrival at the channel “to cover cinema” was announced the day before his predecessor was given her marching orders – is a relatively low-profile figure in the French film industry scene.

He arrives from video game giant Ubisoft where he was head of production and development at its Ubisoft Motion Pictures arm, set up in 2011 to bring its hits such as Raving Rabbids (Lapin Cretins) and Assassin’s Creed to the big screen.

His prior feature producer credits comprise For A Son and Gainsbourg: A Heroic Life and he was associate producer on Yann Samuell’s War of the Buttons, one of two remakes of the 1962 classic that went head to head at the box office in 2011.

“I can’t really tell you want I think about his appointment because I know absolutely nothing about him. I’ve never come across him,” said one producer.

Accord discord

French newspaper Liberation suggested Belmer and Coste-Cerdan had been axed for failing to nail tougher terms with French producers over Canal Plus’ long-standing film financing obligations that were up for re-negotiation earlier this year.  

Under the renewed accord, signed on the eve of the Cannes Film Festival last May, Canal Plus agreed to continue investing 12.5% of its subscriber and advertising returns in French and European films for another five years, running 2015-2019.

Producers had feared the channel – which bankrolls some 15% of France’s annual film production spend to the tune of between $230m (€150m) to $307m (€200m) depending on the year - would attempt to lower its investment obligations on the basis that pay-TV premieres no longer draw subscribers as before due to piracy and the growth of other digital platforms.

Challenging times

Bolloré has been slowly upping his involvement in Canal Plus, ever since securing a majority 14.5% stake and double voting rights last April in Canal Plus parent company Vivendi, where he was already chairman of the supervisory board. 

His arrival comes at difficult time for the channel in the face of increased competition from international digital players such as Netflix, Amazon and Apple for viewers and the arrival of Qatari-backed sports channel beIN, which has outbid it on several key sports rights contracts, driving up prices in the process.

According to first-half 2015 figures released in September, Canal Plus had some 5.5 million subscribers in June, 98,000 less than at the end of 2014.

Former Canal Plus CEO Belmer, who was replaced by his right-hand man Maxime Saada in July, appears to have taken the initial rap for the falling ratings but now Bolloré appears to be instigating a radical overhaul to bring the channel into the digital age.

Although Canal Plus’ film finance appears to have been locked in for the next five years, the French film industry remains concerned about Bolloré and his new management team’s plans for the channel. 

The Le Monde newspaper quoted new CEO Saada as saying that light entertainment and “throwaway” programming, referred to as “le flux” in French, would become “a new pillar” of the Canal Plus Group.

The French film world fear this could be to the detriment of its investment in cinema in the longer term.

Le SPI’s Prissard-Eltejaye said the producers would be scrutinising how the channel meets its 12.5% obligations in the Bolloré era. Some fear the onus will be placed on more commercial, mainstream films.

“It remains to be seen whether cinema will still be an important element in the channel’s subscription strategy and whether there will still be room for auteur cinema and riskier works,” she said.

In 2014, the channel invested $262 (€171m) in 128 French and European films. Eleven of the titles in Cannes’ official selection last May – including Palme d’Or winner Dheepan, Nanni Moretti’s Mia Madre and Maïwenn’s Mon Roi – were pre-bought by the channel.

Bolloré’s media giant ambitions

Canal Plus is a key pole of Bolloré’s ambitious plan to transform Vivendi into a European media giant.

At the heart of his strategy is greater synergy between the pay-TV channel and Vivendi’s other media assets including the Universal Music Group and the recently acquired video-streaming platform and YouTube rival Dailymotion.

Vivendi acquired an 80% stake in the latter from French telecommunication company Orange in June for €217m. 

Previous attempts to buy the Paris-based platform by US digital giant Yahoo and Hong Kong-based telecommunication PCCW failed after the French government pressured Orange to look for a European buyer.

It is among half a dozen recent media acquisitions for Vivendi, which created a $14m war chest through the sale of a number non-core assets including video game specialist Activision Blizzard and French telecommunication company SFR over the last two years. 

Other recent Vivendi purchases include a trio of French television production companies specialising in popular entertainment formats, Can’t Stop Media, Fab Lab and La Parisienne d’images, which has since been renamed Studio+.

The group also announced is also set to acquire a stake in the soon to be merged Banijay and Zodiak group.

Vivendi was also reported to have made a play for pan-European pay-TV group Sky earlier this year, but was rebuffed by the Murdoch family because it would not meet their price of £18 a share for their 39% stake.