take on the coast with weapons and baggage

At the Cannes Film Festival, the two adversaries had planned to cease hostilities. As a sign of appeasement, they agreed to co-produce and codiffuser TV Festival. The prerogative of Canal for fifteen years. In an elegant Division of roles, the encrypted string remained the official partner side media and Orange became Telecom and new media. But the truce did not. On the eve of world cinema appointment start guerrilla warfare between the two French players in the pay television has been re-ignited, Canal accusing Orange to capture his title of "media partner" on its screens. This new episode was hardly surprised. Because no one has never believed in a lasting cease-fire between the two competitors...

After TPS, bouquet of satellite of TF1 and M6 channels, it is indeed in the Tower of France Telecom, a challenger equipped with any other financial firepower power, want to tackle the omnipotence of the subsidiary of Vivendi. Determined to defend its square meadow, the latter initiated a legal guerrilla war with the hope to kill this rival which, within a year, launched a sports channel and a bouquet of channels film and series in the egg.

Pending the end of the scenario, Canal and Orange opposing from tonight on the Croisette. Engaged in 11 films on 20 in competition (including the latest Almodóvar, Jacques Audiard and Michael Haneke), the first planned, despite the crisis, to spend EUR 6 million at the event. As the years past, showcases the chain "Le Grand Journal" plaintext, of Michel Denisot, "Les Guignols", etc. take on the coast with weapons and baggage.

"Not in the same category.

On its side, with "Originally" of Xavier Giannoli, co-produced by its subsidiary, Studio 37, the telecoms operator intends well show that he is not a single listed, but a producer, buyer of programs for its bouquet Orange cinema series and its 251.000 subscribers. Negotiation with the professionals to define its investment obligations in film, he dreams to finalize and announce its agreements during the festival. "The symbolism would be strong", recognizes Xavier Couture, the pattern of content at Orange.

In his Office overlooking the Seine in Issy les Moulineaux, Bertrand Meheut, the President and CEO of Canal , remains calm: "We do play not in the same category", cowardly, imperturbable. Because, for the time being, the undisputed Godfather of French cinema, Canal .

When Orange offers producers to invest 20 million euros per year for three years, to préacheter French films that he will release first exclusively on Orange cinema series, the subsidiary of Vivendi expense, she, 10 times more. In 2008, the encrypted string préacheté 120 French titles for 167 million. Add GST Star and movie cinema, also in the group, are 150 films which received money from channel, or over two-thirds of the hexagonal production of the year... Not counting the investments of StudioCanal, society cousin, wholly-owned subsidiary of Vivendi co-producer of French and foreign films.

The obligations imposed on Canal at birth, in November 1984, led him to get heavily involved in the funding of the seventh art. The string must invest 9 of its turnover in the hexagonal films. The good health of HABs film production depends largely on Canal . And when a fan of football subscribes, the film benefits from...

With 45 of its reserved for film antenna, 460 titles released in 2008, 40 of French origin to comply with its specifications, the encrypted string is his account. In spite of competition from Internet and the TNT, 25 of subscribers would come for movies and nothing else and 50 of them for the cinema and sport, the bedrock of its offer for 25 years. Reassuring, their preference would go to the French film rather than the Hollywood productions! "85 of our customers were satisfied with our offer cinema, against 60 five years ago", says Manuel Alduy, the Director of the film.

A more rational management

Sold as the string of "all the cinemas", Canal funds all movies categories and genres. Of large machines as "Arthur", by Luc Besson, the first film with less than 1 million euros. The comedy in the polar. "We are not in the same logic that TF1 and M6." "As a string premium, our goal is to aggregate the number of audiences and cater to all tastes", explains this Manager.

If, during the boom years of the era Lescure, the chain was able to spend its money in sometimes "disorderly" way which helped inflation budgets it has become with Bertrand Meheut more rational in the management of its investments. At the time to buy a film, she already knows what box in the grid it will be programmed and "it sets the amount of his ticket on the hearing expected and also the image it may remove," notes Didier Duverger, CEO of Coficiné, the cinema of Natixis Finance Bank.

At the time, Canal , on average, brings 17 of the budget of the French film finance twice as big productions than some years ago, or 10 per year. On the encrypted string, which broadcasts films twelve months after their release, as on TF1 and M6, the most watched titles are those that background in the room, as "Welcome to the Ch'tis". "This policy only removes nothing the least expensive films", minimizes manual Alduy. Bound by a clause of diversity, the string must invest in works less than EUR 4 million. But author films, they are often confined to the second part of evening...

With this take-over of Canal, person in film circles critical the financier. And for good reason. If, before the filming, the encrypted string is not partante, the producer may engage. 600 Scenarios received annually, it retains 125. Those who support are virtually assured of closing their funding. "In other words, Canal has a right of life and death on the films", summarizes a former manager. Certainly, a title which has not been préacheté may be the subject of a subsequent purchase, such as "Waltz with Bashir". But prices paid remains low.

The film, he sees that the good sides of this relationship. "It is through this privileged link which has survived for nearly twenty-five years that French cinema on both legs," notes Director Jean-Jacques Salomé. Forgotten outbid which had enabled the "Bronzés 3" to extricate from 8 to 10 million euros from GST. At the time, the war was raging around the big films. "Destabilized, Canal had favoured the most representative producers in the market or the political", remembers Didier Duverger. GST absorption by the subsidiary of Vivendi ended crazy escalations.

What matters today to film circles, is that Canal is doing well. So with the fall of advertising, TF1 and M6 would reduce their investment in films. The channel model, it seems to resist. At the end 2008, the encrypted string was 5.3 million subscribers, less than a year earlier, 55,000 but CanalSat in had won almost as many (or a total of 10.6 million).

With the arrival of Orange in television, a new deal however is to organize... "When Orange started to préacheter films, notably with fidelity, which gave him the hand on"on the other side of the bed", with Dany Boon and Sophie Marceau, and"Le Petit Nicolas", Canal has strongly responded", says Didier Duverger, according to which the string immediately sought to consolidate its natural relationships with the major producers of the place.

New offerings in preparation

In the production, Orange has already become a large player via Studio 37, which, in 2008, has invested EUR 30 million on such films as "Welcome" by Philippe directed by Lioret. Entangled in legal disputes, the subsidiary of France Telecom small not advance in the hexagon while it has agreements to Gold Award with American Warner ("Harry Potter", "batman") and HBO. What makes his little readable strategy in the eyes of the French. And raises concerns on the side of author film producers, who fear to be, as at the time of GST, sacrificed to the competition.

Because nobody in doubt: if he confirms its ambitions in the content, the telecom giant will not a minor role simply. With, for Canal , the risk of subscribers in the competitor, whose supply is less expensive. The encrypted string is also preparing its response and works of less expensive offerings. It is in this context that the renegotiation of the agreements between Canal and French cinema will start after Cannes. More that piracy or that the interest growing subscribers in fiction (it would be the motivation of 30 of new clients), the shade of Orange will weigh on negotiations.