Pay-TV operator Canalsat hopes to make a strong impact in the mobile TV market in France, as the company seeks to boost its revenues outside of its core direct-to-home (DTH) platform.

Canalsat teamed up with mobile operator SFR in June 2005 to launch live TV on 3G. The service, which provides access to 17 channels for 7 euros ($8.90) per month, already has attracted tens of thousands of subscribers.

"We believe that the television inside of the home will get bigger and better, and you also have HD capabilities here," Christian Bombrun, director of marketing and business development at Canalsat, told Satellite News. "In addition to this big device for the whole family, we believe that there will be many additional screens and that the TV consumption will move. Mobile TV is a way to get this individual consumption. There are many potential subscribers for this so we expect to generate strong revenues. We definitely think it will be a revenue driver for us."

Business Models

Canalsat would like to continue to grow the subscriber base for mobile TV by partnering with the three mobile operators and increasing marketing efforts, Bombrun said. While mobile TV remains in the early stages of development, Bombrun said business models could begin look like their DTH counterparts here.

"It is a new market so we have to be very open minded," Bombrun said. "We have to test new things and see how the user reacts. We do have some strong opinions here. We are very concerned about models about where you pay based on the duration of the content used. TV is about pleasure and you don’t really count your pleasure. I would say that we don’t support models where you pay for content on a duration basis. We could support models, which are PPV. We think this is a model that could work, but we are more focused on models around subscription. We think it is a model that clients are very used to in terms of regular TV. It is also the model for Internet access."

Bombrun sees similarities between Canalsat’s efforts and those of BSkyB in the United Kingdom. "The fact that Canal+/Canalsat are definitely the best brands in France for pay- TV means that this is a good starting point," he said. "Once you have deployed your marketing strategy, you have to also explain the new benefits, for example, when you can access the content away from home. On the Canalsat offering, we have the EPG on the mobile phone. You get an SMS when your favorite show starts and turn on the TV to start watching the show on your mobile. You can access the same content everywhere and that is how we market mobile TV."

For SFR, the deal with Canalsat gives them a significant advantage in the mobile TV market in France, where Canalsat competes against Orange and Bouygues Telecom. SFR, which has 17 million customers overall, has 1.5 million 3G customers.

SFR has 35,000 subscribers to the Canalsat package, in line with SFR’s forecasts, and also has launched its own TV package dubbed SFR Le Bouqet, said Solene Jaboulet, SFR’s manager of mobile TV.

"We are the only ones today to have the Canalsat package, which is a great advantage for us, as they are very powerful brand," Jaboulet said. "In terms of differentiation, while having this package is an advantage, this may not continue. At the end of the day, we will all more or less have the same TV channels. So the differentiation will not necessarily be in terms of the TV channels and programs themselves but in the way we package them. So it will be questions like how we package them [and] what kind of bundles we offer."

Canalsat also is looking to use its content in other ways and has deals with the other mobile companies, Bombrun said. "We also have a Canal+ portal, which is not only deployed on SFR, but on Orange and Bouygues. It is a portal of content, basically taking content from what you can see on the Canal+ channel itself. It has more than 400 short videos taken from anything from entertainment, movie extracts and sports. Anything you can find on the channel, you can find on the Canal+ portal."

Canalsat also hopes a move to DVB-H (Digital Video Broadcasting – Handheld), a broadcast technology, also will reap rewards in France. "We have said 18 months ago that DVB-H was the right technology to deploy mobile TV," Bombrun said. "We were one of the first ones to deploy a trial in Paris more than 12 months ago with 500 participants. We got significant feedback from this trial we did with SFR, Nokia and Towercast. We think 3G is fine for certain mobile TV experiences, but ultimately, for live TV, you will need a broadcast technology and we think DVB-H is the right one. There are lots of things going on with proposed new laws which will be discussed in September in France."

Canalsat hopes to launch services via DVB-H by the end of 2007, Bombrun said. "It will improve our mobile TV offering both in terms of quality, and in terms numbers of channels and the commercial potential of service," he said. "Once the service is launched, we expect progress to be very fast. The only concern we have, and I think it is the same in the U.K., it is how fast the regulation will move and getting frequency issues resolved. We know there is customer demand based on both what is happening on mobile TV on 3G right now, as well as what we found on our DVB-H trial. We got an average of 25 minutes per day of viewing time on our participants in the DVB-H trial last year."

— Mark Holmes

Contact, Caroline Mir, SFR, e-mail, [email protected] Antoine Banet-Rivet, Canal-Plus, e-mail, antoine.banetrivet@canal- plus.com