Monday, September 15, 2014

The agreement between Bouygues Telecom and Netflix puts pressure on … – Les Echos

Bouygues Telecom will offer movies and series from Netflix on its box. Its competitors are not willing to sign at any price

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Who’s next? In announcing today the arrival of Netflix on its box in November, Bouygues Telecom puts pressure on its major competitors. Orange, SFR and Free: everyone speaks with giant video on demand subscription (SVOD); whole question is who will be the first to enter into a similar to that signed by Bouygues in the night from Thursday to Friday Agreement. The response is not obvious in view of the positioning of each market.

The fact that Bouygues Telecom pulls the first is not surprising. The subsidiary of construction group did face a challenger in the box, with only 2.2 million customers (as against 10 million for Orange, 5.7 million and 5.3 million for Free SFR). Determined to dynamite the market, Bouygues launched in March an offer “triple play” to 19.90 euros, which has already recruited more than 200,000 subscribers. After the price cap on content.

Competitive Advantage

To recoup its new offerings, must always Bouygues seduce more customers. By being the first to offer Netflix on its box (the service will be available on the Bbox Sensation then the new Android box scheduled for the end of the year, but not yet in on B & You), the operator hopes to benefit from real competitive advantage. “ We want to offer our customers the maximum content with Netflix, but with TF1 or Canal says Stéphane Allaire, director of content and services at Bouygues Telecom. We do not want not make the choice instead of customers . ”

This wealth has a price. Netflix to offer, Bouygues was little looking on the terms of remuneration of the giant California – it would propose to pay back about 10% of the subscription fee for operators, against a usual ratio of 30% in industry.

For Orange, Free and SFR, the issue of funding remains a major obstacle. But that’s not the only one. Conclude an agreement allowing Netflix to expand the territory is complicated a political point of view. Based in Luxembourg, the group bypasses the French law and is not forced to participate in the financing of the hexagonal audiovisual creation as are the television channels. Sign up with Netflix and returns to be his “ Trojan ” in France, as recently emphasized Stéphane Richard, the owner of Orange. “ all economic patriotism Bouygues is now able” ridicules a competitor. “ After the failure of LCI, Bouygues considers himself free of any commitment vis-à-vis the power ,” said another.


Other parameters come into play. SFR Difficult to make a pact with Netflix, so that it is owned by Vivendi, which also owns Canal +, the channel that has the most to fear from the arrival of Netflix … And the fact that SFR is about to be bought by Numericable does not simplify the situation. Numericable is the second pay-TV operator in France and instead considers Netflix as a competitor. It has also launched a new offer yesterday, Václav Series, which offers subscribers Václav Fibre 3,000 series episodes per month, as a anti-Netflix weapon. It contains series broadcast on Club Series, Arte, Disney Junior, but not those of TF1 or Canal +. Not sure that’s enough to counter the “American ogre”.

From the Orange side, the case is not simple either. The state holds 27% stake in the operator. Sign an agreement with an American who does not respect the French law is tricky. In addition, Canal + is a big Orange customer who distributes its chains, which brings in several hundred million euros per year. Why get angry with Canal + while Netflix would yield only a few million? More than the announcement of Bouygues is especially successful Netflix could move competitors. “ It is urgent to wait. The operators already offer a variety of content. If a few months Netflix is ​​successful, there will be time to move it “predicts Sylvain Chevallier, Partner at BearingPoint. The soap opera “Netflix and telecom” is just beginning.


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