Monday, November 30, 2015

Has Vivendi a strategy?

Vincent Bollore, the powerful chairman of the Vivendi media group is facing a strategic quandary. He must answer rapidly to the challenge of Vivendi's subsidiary Canal Plus, the prestigious pay TV channel that enjoys 7 million subscribers spread in France but also in Poland and in Africa.

Since its creation in 1984, Canal as users call it has been a very successful French HBO, building its offer on highly rated movies and series and first league soccer matches. To have access to its premium menu, customers were willing to pay 40€ a month. Until recently the company was very profitable and brought a lot of prestige to Vivendi whose other branches are working in less glamorous fields such as music and telecom.

However its managers did not grasp in time major upheavals in the media field. These last 5 years, incentives to subscribe have greatly diminished. The offer of free channels has gone up to 23. Moreover, two new competitors have attacked the French market, investing in what used to be Canal's main assets. Bein TV financed by illimited Quatar funds offers for 11 € a month a large choice of sports competitions. Netflix started last year with American and French series for 10€ monthly. Its not a big surprise if the number of subscribers is going down at a fairly fast pace.

A few weeks ago, Vincent Bollore who took over Vivendi last year stated that he was willing to invest as much as 2 billion € to develop and improve Canal's offer. Yet, to everybody's surprise he let Canal lose the British soccer first league bought for 300 millions by Altice, the ambitious media group owned by Patrick Drahi.

It appears that by now Canal subscription rate is much too expansive. Bollore finds himself in the uncomfortable position of Air France chairman facing the low cost companies such as Easyjet. In television, as in Air transport lowcost is now the rule.

What can be done to save  French television major player? We shall discuss solutions in this blog's second part.

Tuesday, November 17, 2015

The Washington Post A success story

On October and for the first time, the digital audience of the Washington Post was larger than the NY Times. It is an impressive success for the gray lady is a toughcompetitor and has been active and dynamic for many years in the digital field. However, its results are mixed. The third quarter figures for 2015 showed that the NYT could not stop the fall of ads in its print edition and in spite of an audience of 1 million subscribers, its digital site cannot make for the losses in print advertising. Also, the Facebook offer of advanced articles that was supposed to provide new ad incomes for the newspapers does not work as well as it was supposed to do. It seems to cannibalize the audience of the legacy media websites without carrying much new profit.

As far as the Washpost is concerned, it appears that the sale to Jeff Bezos was a smart move from the Graham family. Contrary to what many people, including myself feared, the Amazon owner has played his part very successfully. He has stopped the flow of departures from the newsroom and hired a huge team of technicians to improve the web operations. He has also approved a very aggressive marketing policy, offering very chap subscription rates to the digital users in order to attract a large new population.

Still, these two major newspapers face now another challenge which has been met already by several pure players like the Huffington Post, Politico or Buzzfeed: how to keep growing. The only way is to look to Europe and Asia wher there is a large English speaking population. One can bet that Bezos will work at it thanks to his world Amazon network.

A last question. What is doing France's Bezos, i.e. Niel coowner of le Monde? it's time he works on the newspaper's digital strategy.