France’s national competition regulator has given Canal+ Group greenlight to acquire Orange Studio and OCS, the film and pay TV operations of Orange, France’s leading telco group. However, the French Competition Authority is applying certain conditions.
The French market watchdog carried out an investigation into the acquisition and concluded that it could have had a significant impact on French cinema by creating a monopsony situation in certain markets. That is because the agreement would leave Canal+ in the position of sole buyer of recent French films for first-pay-window broadcast, with Canal+ and OCS the only two first-pay-window outlets available to French film producers seeking pre-financing for their projects.
In order to minimize the threat, under the plans presented to the regulatory commission, OCS will be combined with Cine+, one of Canal+’s channels, but it will continue to operate independently. Moreover, Canal+ has committed to having OCS/Cine+ pre-buy a minimum of 25 French film projects over the next five years, including at least four French film projects per year (and one project budgeted under €4 million).
Moreover, OCS/Cine+ will have its own staff and budget, with a cost accounting system that clearly separates the costs and revenues from those of Canal+. The annual budget of the OCS/Cine+ will correspond to the amount guaranteed by OCS as part of its agreement with cinema trade associations. Lastly, investments must reflect the diversity of French film production, particularly in terms of production budgets and the diversity of talent, filmmakers and types of films financed.
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