Page 18 - 2012 Annual Report

VIVENDI l 2012 l Annual Report 18
GROUP PROFILE – BUSINESSES – LITIGATION – RISK FACTORS 1
1
SECTION 2 - BUSINESSES
CANAL+ GROUP
2.1.3. Free-to-air TV
2.1.3.1. FREE CHANNEL DIVISION
Canal+ Group operates in free-to-air TV via i>Télé and unscrambled
Canal+. In 2012, it formed a free-to-air channel division, which also
includes general channel D8 and the music channel D17, formerly Direct
8 and Direct Star, respectively, which were subsequently re-launched in
October with new programming.
The acquisition of the two channels from the Bolloré Group was
announced on September 8, 2011, and, in July 2012, it was approved by
the French Competition Authority. In connection with this acquisition, the
group agreed to a number of commitments that impose strict constraints
on the acquisition of rights.
In September 2012, the French Audiovisual Council (CSA), in turn,
approved the transaction after Canal+ Group’s substantial commitments
to serve the interests of viewers and French and European creative efforts.
2.1.3.2. CANAL+ RÉGIE
Canal+ Régie, a wholly-owned subsidiary of Canal+ Group, is its exclusive
advertising company. It sells advertising on the Chaînes Canal+ (only the
unscrambled programs), i>Télé, D8, D17, eight specialty channels and
eight group websites, including canalplus.fr. Since January 2013, it has
also been the exclusive advertising agency for UGC cinemas. Its sales and
marketing innovations provide Canal+ Group with advertising revenues
that have been steadily increasing for eight years, despite a difficult
economic environment.
2.1.4. International Pay-TV
2.1.4.1. OVERSEAS DEPARTMENTS AND TERRITORIES
AND FRENCH-SPEAKING COUNTRIES
Canal+ Group has developed its Pay-TV operations internationally through
its subsidiary Canal+ Overseas. In the Overseas departments, its Canal+
and CanalSat offerings provide access to over 200 channels, mostly in
French.
In French-speaking Africa, its subsidiary Canal+ Afrique operates in more
than 30 countries in Central and West Africa, as well as in Madagascar.
Since 2012, due to a change in satellite, its offerings cover new territories
(the entire Democratic Republic of the Congo, Rwanda and Burundi).
Canal+ Overseas has a total of 1.7 million subscriptions.
2.1.4.2. POLAND
Since 2012, Poland has been the second-largest market for Canal+ Group,
which was historically represented by its subsidiary Cyfra+.
On November 30, 2012, Canal+ Group, ITI and TVN announced the
finalization of their strategic partnership to combine their Pay-TV channel
packages in Poland and for the acquisition by Canal+ Group of a significant
interest in the capital of TVN.
The combination of Cyfra + and the TVN “n” package resulted in the
creation of a new company, nc+, of which Canal+ Group owns 51%, with
TVN Group owning 32% and UPC owning 17%. This major satellite TV
platform has a total base of 2.5 million customers.
The creation of nc+ will make it possible to offer quality entertainment
to subscribers through exclusive content and the best technology.
TVN will provide its expertise, in particular in the area of content
production. Canal+ Group’s acquisition of an interest in the capital of
TVN, in which it became a major shareholder along with ITI Group, will
strengthen this cooperation.
The transaction, which was unconditionally approved by the Polish
competition authority, was completed following the contribution of TVN’s
interest in “n” in exchange for 32% of nc+. Concomitantly, Canal+ Group
paid approximately €277 million to acquire 40% of N-Vision, the parent
company of Polish Television Holding, which is the majority shareholder in
TVN (holding 52.45% of its shares). The ITI Group continues to hold 60%
of N-Vision shares.
2.1.4.3. VIETNAM
K+ is a package of satellite channels operated by VSTV, the Vietnamese
subsidiary of Canal+ Group. At year-end 2012, the VSTV portfolio had more
than 400,000 subscribers.
2.1.5. Other Businesses
2.1.5.1. STUDIOCANAL
StudioCanal, a wholly-owned subsidiary of Canal+ Group, is a leading
European player in the field of co-production, acquisition, distribution and
international sales of movies. It operates directly (theater distribution,
video, digital and TV) in the three main European markets (France,
the United Kingdom and Germany) as well as in Australia and in New
Zealand. Its catalog boasts more than 5,000 international titles.
To strengthen its investment capacity, it signed a co-financing
(slate financing) agreement with an investment fund, Anton Capital
Entertainment.