Vivendi’s pay-TV unit Canal+ posted flat revenues in 2009, as international growth balanced domestic erosion

Driven mainly by growth internationally, we anticipate recovery to annual revenue growth barely above 2% by 2012, with a slightly deteriorating EBITA margin

Canal+ could do better if it invests in the latest generation of set-tops and, possibly, free to air television

France Télécom’s forthcoming Chief Executive Officer, Stéphane Richard, is considering a radical shake up and potential U-turn of Orange’s TV ‘content’ strategy, initiated and driven by CEO Didier Lombard

Orange could withdraw entirely from supplying premium pay-TV channels (sports and film) and distribute only third party content, as has been the focus of other broadband suppliers

A retreat of Orange from TV content would enable a more active cooperation with the Canal+ Group, benefiting both partners, who have largely overlapping subscriber bases

This in-depth report on pay-TV in France charts the course of Canal Plus and its main, but much smaller, competitor, TPS, over the period 2004-06. We anticipate pay-TV penetration will rise from 35% in 2003 to 38.7% by 2006, driven mainly by aggressive competition between TPS and Canal Plus in an improving economic environment.