Lagardère Active’s Dray: YouTube
French broadcaster Lagardère Active signed a deal in April to make its content available to the YouTube community in France, as Lagardère Active looks to cater to consumers who want to watch content online. This strategic partnership aims to speed up the promotion and monetization of premium video content on an international basis.
Gregory Dray, director, international business development, digital business group, Lagardère Active, explains why the French broadcaster the goals behind the agreement and how the changing broadcast landscape is affecting broadcasters such as Lagardère.
VIA SATELLITE: What is the significance of the YouTube deal?
Dray: Strategically, this agreement with YouTube has a lot of significance. We have an extensive portfolio of distribution rights, whether it be in short-form or long-form video content. Our goal is to use as best as possible all of our rights to better expose our content to new audiences and better monetize all the content we are producing and distributing. We decided to enter into a significant partnership with YouTube for several reasons. First, we wanted to enter into a partnership with a leader in online video with an international footprint in video. YouTube is today, by very far, the undisputed worldwide leader in the online video arena with more than 500 million unique views per month and strong leadership positions in key territories such as the United States, the United Kingdom, France, Japan, Spain and Italy. YouTube is the third largest Web site in the world. Second, we wanted to make sure to have a solid business model supporting our video syndication initiative. Basically, our content, one way or another, must be properly compensated, so we needed to find out a solid business model. We are considering YouTube as a giant worldwide TV network, and if for the consumer the content found on YouTube is free, Lagardère Active does not provide its content to third-party platforms for free. After one year of negotiations, we managed to find with YouTube the right business model for us and for them.
Speaking more about the content, obviously, you will just find on YouTube selected programs from our libraries. The goal is not cannibalize ourselves (for short-form content). We intend to keep some exclusives for our own Web sites.
VIA SATELLITE: What benefits will you derive from this deal?
Dray: We will completely respect the exclusivities and the rights already granted to our key partners, for example, Canal Satellite in France for our TV networks unit and the largest TV channels such as TF1, M6, RAI, NHK, etc. That being said, there are some rights we do not fully exploit at the moment. The deal with YouTube will enable us to exploit a certain category of rights and to monetize them. For example, Europe Images International (EII) owns international rights to critically acclaimed and successful French dramas, documentaries and feature films. We will use, for example, YouTube U.K. or YouTube U.S. to give more exposure to these programs in the United Kingdom and the United States while starting to monetizing them through display and in-video advertising units powered by YouTube’s commercial force.
In France, we also own distribution rights of quality dramas, feature films and documentaries. What we will do is to offer on YouTube a selection of the best of our content, but for a limited period of time and partially, that is to say that, for a series, we will just make available some selected episodes. We will see the reaction of the audience, look at the monetization results, and then decide how to move forward. Again, this deal with YouTube will be complementary to what we already do with other platforms, particularly big local broadcasters. We will just play with our rights and do what’s best for the programs and their monetization prospects while completely respecting the rights already granted to broadcasters. For example, a series like “Joséphine Ange Gardien”, a ratings bonanza for TF1 in France, will never be made available by EII on YouTube France, but we will distribute on YouTube U.K. a couple of Josephine episodes dubbed or subtitled in English. We want to use YouTube to showcase the best of our French content and bring it to an international audience. We are going to make available on YouTube in the United Kingdom and the United States French flagship TV programs. We will use YouTube as a platform to showcase this content. The goal is to give new promotional opportunities for programs to be sold to local broadcasters. At the same time, we want to monetize these programs in the United Kingdom and the United States. With the depth of our content, we want to find new monetization tools.
VIA SATELLITE: Are there security issues in putting this amount of content online?
Dray: This agreement also helps us to fight piracy. Within the framework of this agreement, we are going to use the ContentID tool, a technology tool developed by YouTube to fight piracy. This means that Lagardère Active will be able to block pirated content. More specifically, we are going to have the choice to block this pirated content — or to monetize it — as long as we own the rights to this content. We are going to use this tool across the company.
VIA SATELLITE: How is the Internet changing things for traditional broadcasters and content producers?
Dray: It changes everything. At present, you are seeing a company like YouTube reach critical mass in terms of monetization of premium content. Three years ago, it would not have made sense for us to reach a deal with a company like YouTube, because they did not have the right tools as well as the commercial power to properly monetize our content, whether short-form or long-form. A deal would not have made economic sense at that time. From a business perspective, it now makes sense to do a deal with YouTube, because they know how to monetize short-form and long-form content. They are monetizing long-form and catch-up TV content from Channel 4 and Channel 5 in the United Kingdom and from Univision in the United States. The Internet is changing the picture for broadcasters and TV producers. Lagardère Active now considers the Internet with a different perspective. We are considering the Internet as well as other emerging digital platforms as a new avenue to monetize our premium video content. This was not the case two or thee years ago because the Internet did not have enough economic maturity back then.
VIA SATELLITE: What are the challenges for a major broadcaster to stay relevant in this new media environment?
Dray: We are really focusing on the power of our brands. What we are seeing is that advertisers are more and more attracted by premium content in a safe environment; it is particularly the case, by the way, in the online video environment. Lagardère Active considers that being a premium online publisher will make a difference at the end of the day. We aim to bring the power of our brands on new digital platforms and develop a 360-degree approach. It is, for instance, the case with our Elle brand, both in France and internationally.
VIA SATELLITE: What is the next phase of Lagardère Active’s growth strategy?
Dray: I will speak for digital only here, though it is difficult not to link digital to our other media activities. The YouTube deal being a first step, we are aiming to develop other long-term, structural international partnerships with key digital players — partnerships enabling us to capture the whole value of our top-flight content. On the contrary, we are clearly not interested in talking to players who just want to use our content with no real business model supporting the partnership. There are still lots of things to do in the digital arena for us, such as taking advantage of new devices such as the I-Pad and e-readers and establishing a clear international digital leadership in key verticals such as entertainment, women’s lifestyle, etc. Content producers have a lot to gain in the new digital world.
VIA SATELLITE: Who are these key partners likely to be?
Dray: It can be big distributors of media content, big Internet players, etc. As already said, we are considering YouTube a as a big global cable TV network with a massive audience. Partnering with YouTube enables Lagardère Active to leverage its size, its brands and its international exposure. There are other big players we are discussing with — the usual suspects when you think about digital media but not only those ones. There are also smaller innovative companies we would like to partner with on different topics.
VIA SATELLITE: What role will satellite technologies play in this world?
Dray: Satellite has a big role to play in the new media world. You just have to look at the different initiatives taken by BSkyB in the United Kingdom, Canal Satellite in France or Sky Italia in Italy. It is impressive, and, by the way, we have a significant and key partnership with Canal Satellite in France encompassing several aspects.
VIA SATELLITE: Is the YouTube deal a game changer for Lagardère Active?
Dray: It might be, but please permit me to be very modest here. One single deal will not change the face and the fate of Lagardère Active. But if we manage to reach several other agreements of the scope of the YouTube one, then the story will change a little bit.