Canal+: OK to FTA channels but severe measures on TPS merger

France’s competition authority has approved Canal+’s acquisition of Bolloré-owned free-to-air channels Direct 8 and Direct Star, and has simultaneously imposed a series of punitive injunctions on the pay TV operator over its failure to fulfil the obligations it undertook at the time of the merger of CanalSat with TPS in 2006.

The injunctions include a restriction on multi-year framework movie deals to a three-year term, the imposition of separate contracts for each type of rights acquired, such as for first and second pay TV windows, and the banning of multi-year framework deals for French films.

Canal+ has also been told it must sell its stake in the Orange Cinéma Series channels or, at the very least, take measures to restrict its influence on the channels.

Canal+ must also undertake to implement clear rules for access of independent channels to the CanalSat platform, must allow alternative distributors including ISPs to compete effectively by granting them favourable terms to distribute content exclusive to CanalSat, and must make its own movie channels available on a non-discriminatory basis to third-party distributors.

The pay TV operator must also sign separate contracts for video-on-demand and subscription VOD rights on a non-exclusive basis, with no bundling with linear pay rights, must sell VOD and SVOD rights to StudioCanal films to any distributor on a non-discriminatory basis and must not grant exclusive VOD distribution rights to any ISP.

Canal+ has been forced to accept strict conditions for its acquisition of the two free-to-air channels. The pay TV operator will undertake only to acquire simultaneous pay and free-to-air rights to films or original series from one of the six Hollywood majors, preventing it from retaining an exclusive hold on popular US shows. The regulator has also mandated that Direct 8 should acquire mostly medium-budget films that are not generally seen on TV from StudioCanal, rather than transmit the kind of mainstream blockbusters shown in primetime on the main free-to-air channels. Canal+ has also been prevented from retaining exclusive free-to-air rights to sporting events it acquires for its pay channels, but which must also be shown in some form on free, by entrusting the decision on re-distributing the free rights to an independent body.

Both the injunctions relating to the CanalSat-TPS merger and the conditions on the free-to-air channels are for a five-year term.

Canal+ has accepted the conditions for the acquisition of the Bolloré channels, which media regulator the CSA must now take a decision on by September, but has rejected the injunctions on the TPS merger. Canal+ said it would move quickly to demand the suspension and cancellation of the latter before the Conseil d’Etat, whose rapporteur Vincent Daumas has already accepted the pay TV operator’s case that the legality of the competition regulator’s actions should be looked at by the country’s constitutional council.