Breakdown of the results of the Canal Plus channel

Yesterday largely profitable, the encrypted channel made a sharp deficit, due to a leak of its subscribers, but also due to the evaporation of the audience of its programs in clear, which saw their advertising revenue divided by ten.

The Canal Plus channel is going from bad to worse according to its financial results. The accounts of Canal Plus Publishing Company (which, as the name suggests, is the company that publishes the encrypted channel) have literally collapsed in recent years.

Since 2012, revenue has fallen by 20% to 1.5 billion euros. This is primarily due to a 15% drop in subscription revenue, caused by the flight of half a million subscribers and the launch of discount offers in 2016.

At the same time, the audience for unencrypted sections was almost divided by ten. Logically, net advertising revenue from these rates evaporated together, falling from 159 to 16 million euros in five years.

Dive into the red

Five years ago, unencrypted disks cost almost 120 million euros and therefore generated a margin of around 30 million euros. Today, their costs have undoubtedly dropped, but they certainly exceed the meager advertising revenue, making free-to-air broadcasts highly loss-making.

All in all, the chain, which made a generous profit yesterday, has now fallen sharply in the red. Between 2014 and 2017, its operating income (excluding the balance from the Canal Plus group) thus went from a profit of +157 million euros to a deficit of -128 million.

Dissonance

These poor results contrast with the optimistic discourse of the leaders. “Canal Plus, which some thought was in trouble, is in good shape. Its results are extraordinarily satisfactory”, assured the main shareholder Vincent Bollore at Vivendi’s last general meeting. “For 4 years, Canal Plus has relaunched its activities in France. The restoration of the payment channels continues. Many said that it was not possible to restore Canal, we prove that they are wrong!”, Added the chairman of Vivendi’s board. Arnaud de Puyfontaine. “The performance of the subscriber base has been quite spectacular since mid-2015,” assured the president of Canal Plus Maxime Saada’s board of directors. “All indicators are turning green,” concluded the channel’s deputy director, Frank Cadoret.

For the record, Vivendi, after publishing the results of the encrypted channel from February 2016, stopped with it in February 2017.

When contacted, the channel’s spokesperson replied that the Canal Plus channel is now marketed within global offerings that also include other channels, and therefore the Canal Plus publisher’s isolated results no longer reflect the current business strategy. The spokesman adds that the decline in advertising revenue also stems from the reduction of unencrypted beaches, which since 2015 have been reduced from 6 to 2 hours per day. Finally, the spokesperson clarifies that the result of the Canal Plus publishing house does not take into account distribution costs (marketing, advertising, customer service, sales commissions, decoders) incurred by other subsidiaries.

Update: In an internal letter sent on May 24 and quoted by Satellifax, Chairman of the Executive Board Maxime Saada states that the result of pay-TV on the French mainland increased by 30 million euros in the 1st quarter of 2013 compared to the 1st quarter of 2012. He confirms that the beaches in clearly have never been profitable. Finally, he adds that “Unfortunately, the Canal + channel was not profitable in 2012 if distribution costs (marketing, sales, customer relations, decoders, etc.) are taken into account”.

Note that the 2012 financial statements of Canal Plus Publishing (available below) show a net profit of € 50 million. These accounts specify on pages 65 and 92 that the Canal Plus publisher contributed to the distribution costs by paying a distribution commission of € 276 million. If the Canal Plus publishing house had not contributed to the distribution costs, its net profit would have amounted to 326 million euros. These 2012 accounts were certified by the auditors, deposited at the Commercial Court’s Legal Office and at AMF, and was the subject of a press release dated 27 February 2013 (available below).

The results of Canal Plus Publishing Company

Turnover (in millions of euros)
2012: 1941 of which 1696 subscriptions and 159 ads
2013: 1941 of which 1697 subscriptions and 146 ads
2014: 1868 of which 1636 subscriptions and 143 ads
2015: 1802 including 1617 subscriptions and 118 ads
2016: 1704 of which 1540 subscriptions and 73 ads
2017: 1544 of which 1437 subscriptions and 16 ads

Operating income (in millions of euros, excluding balance *)
2012: +352
2013: +240
2014: +157
2015: +80
2016: -85
2017: -128

Net income (in millions of euros, excluding balance *)
2012: +326
2013: +196
2014: +101
2015: +73
2016: -86
2017: -134
Source: Social accounts for Société d’Edition de Canal Plus

Target groups for the unencrypted segment 18:30 to 21:00 (audience share in%,> 4 years)
Season 2011–12: 6.1
Season 2012-2013: 5.4
Season 2013-2014: 5.5
Season 2014-2015: 5
Season 2015-2016: 3.2
Season 2016-2017: 0.6
Season 2017-2018 (until mid-April): 0.8

Target groups for the unencrypted segment 18:30 to 21:00 (average audience,> 4 years old)
Season 2011-2012: 1,324,000
Season 2012-2013: 1,152,000
Season 2013-2014: 1,130,000
Season 2014-2015: 1,012,000
Season 2015-2016: 650,000
Season 2016-2017: 126,000
Season 2017-2018 (mid-April): 155,000
Source: Mediametri

* until 2015, Société d’édition de Canal Plus paid its shareholder Groupe Canal Plus a balance known as a ‘distribution commission’ (276 million euros in 2012, 151 million in 2013, 53 million in 2014, 16 million in 2015). Since 2016, Vivendi has paid a balance to the Canal Plus publisher (105 million in 2016, 135 million in 2017). This payment has been removed from the results below to better reflect the economic activity of the Société d’édition de Canal Plus.

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