Page 19 - 2012 Annual Report

VIVENDI l 2012 l Annual Report 19
GROUP PROFILE – BUSINESSES – LITIGATION – RISK FACTORS 1
1
SECTION 2 - BUSINESSES
CANAL+ GROUP
In 2012, the studio financed a number of films including: Non-Stop by
Jaume Collet-Serra, Inside Llewyn Davis by the Coen brothers, Serena
by Susanne Bier, I Give It a Year by Dan Mazer and The Two Faces of
January by Hossein Amini. It also co-produced Mood Indigo by Michel
Gondry and Casse-tête chinois by Cédric Klapisch. It is also involved in
family and animation films (Kirikou and the Men and Women, Ernest
& Celestine and Boule et Bill) and is the exclusive partner of nWave, a
Belgian production company that is a leader in 3D production in Europe
(Sammy and African Safari 3D).
StudioCanal is involved in the production and sale of international TV
series via Tandem Communications, of which it has been the majority
shareholder since January 2012.
2.1.6. 2012 Highlights
✱ On February 23, Canal+ Group announced execution of an agreement
with The Walt Disney Company regarding CanalPlay Infinity. The
group’s VoD subscription offering expands its offering to Disney films
and TV series from ABC Studios.
✱ On March 9, the Canal+ and Orange groups announced the addition
of five channels to the “Orange Cinéma Séries ” (OCS) package to
CanalSat.
✱ On July 23, the French Competition Authority again authorized the
merger of TPS and CanalSat, subject to compliance with restrictions
imposed for a five-year period.
✱ On September 18, Canal+ Group obtained the agreement of the CSA
regarding its proposed acquisition of the Direct 8 and Direct Star
channels, announced on September 8, 2011. These chains were
re-launched in early October under the names D8 and D17.
✱ On October 8, an exclusive master agreement was signed with Warner
Bros. Entertainment France SA. It includes the distribution rights for
movies from the major studio as exclusive Pay-TV premieres, as well
as its catalog titles. It covers all group Pay-TV channels (Canal+, Ciné+,
Comédie and Jimmy) and their associated catch-up services.
✱ On November 8, CanalSat launched a new simplified commercial
offering that includes two additional packs (Panorama and Série-
Cinéma).The offering provides access to some exclusive must-have
channels at the premium subscription level.
✱ On November 30, Canal+ Group, ITI and TVN announced the
finalization of their strategic partnership to combine their pay channel
packages in Poland and for the acquisition by Canal+ Group of a
significant interest in the capital of TVN.
✱ In December, the series Les Revenants was a huge success, with an
average audience share of over 23% in France during the season’s
eight episodes.
2.1.7. Regulatory Environment
The overall Canal+ Group regulatory environment was discussed in
previous annual reports and did not changed significantly in 2012.
The audiovisual communication industry in Europe is subject to national
laws and regulations. In France, their application is overseen by regulatory
authorities such as the CSA. Canal+ has a license to broadcast the Canal+
channel in France via terrestrial networks as well as networks that do not
use frequencies assigned by the CSA, such as satellite, cable and ADSL.
This license was renewed in December 2000 for a period of five years,
then extended for a further five years by the CSA’s decision in March 2005,
before being extended for another ten years, until December 2020.
Canal+ Group, through its subsidiary Canal+ France, holds a controlling
interest in “Société d’édition de Canal+ SA”, a company listed on
Compartment B of Euronext Paris, which holds the Canal+ broadcast
license. Pursuant to applicable rules and regulations, a non-EU national
shareholder is not permitted to hold more than 20% of a company which
holds a broadcast license.
A single company may hold, directly or indirectly, seven licenses for a
national terrestrial digital television broadcasting service. Canal+ Group
has four licenses for Pay-TV channels (Canal+ HD, Canal+ Cinéma, Canal+
Sport and Planète+) and three for free channels (i>Télé, D8 and D17).
Under its license to broadcast in France, Canal+ Group must comply
with certain obligations. 60% of audiovisual works and films distributed
by Canal+ SA must be of European origin, and 40% must be originally
broadcast in French. Each year, the channel must spend at least 3.6%
of its aggregate net revenues for the previous year on expenses on
heritage works (works of fiction, animation, creative documentaries, music
videos and filming or recreation of live performances). A portion of these
expenditures (representing at least 3.1% of the net revenues) is allocated
to the development of independent production.
In the film segment, in December 2009, film industry organizations,
including BLOC ( Bureau de liaison des organisations du cinéma), UPF and
ARP entered into an agreement. Its purpose is to sustain and strengthen
film financing: Canal+ must dedicate 12.5% of its annual revenues to the
acquisition of European films, including 9.5% for original French works.
This figure includes a success premium guaranteed at 0.5% of revenue.
It benefits French films that have sold more than 500,000 tickets at the
box office or French and European diversity pre-purchases that enjoy
the greatest success. This agreement, which was confirmed through
regulations, became effective in 2010.
The CanalPlay VoD and CanalPlay Infinity services are for their part
subject to regulations relating to on-demand audiovisual media services.