Presentation of the 2022 Activity Report to the French National Assembly's Committee on Cultural Affairs and Education

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Madam President, Ladies and Gentlemen

Ladies and Gentlemen,

I'm delighted to be here once again to present Arcom's first activity report. This privileged moment of exchange is an opportunity for me:

• firstly, to share with you the Authority's findings and analyses of the changes underway in our audiovisual and digital landscape;
• secondly, to take stock of Arcom's work, to see an authority that has been profoundly transformed over the past 5 years and is now fully operational;
• and finally, to discuss our roadmap and the Authority's major projects for the coming year.

1. With regard to the transformations underway in our landscape as a result of the digital transition, I would be tempted to speak of a triple revolution.

• The first revolution is that of usage (see presentation document, page 2).

Today, we're witnessing a kind of paradox. On the one hand, we've never spent so much time watching content on our multiple screens - nearly 6 per household. To use the title of Bruno Patino's latest book, we are experiencing a veritable "submersion". 50% of French households now have a contract with a video-on-demand service, which they watch for an average of 30 minutes a day.

On the other hand, although still very high (202 min), television listening time (TVL) is in structural decline (see presentation document, page 3):

- it has shrunk by almost 20% since 2020, with an accelerating ageing of viewers.

The facts are clear: the average age of a TV viewer is now 57 [+10 in ten years], and youngsters are watching less and less TV, in favor of other media.

2/3 of under-15s visit Snapchat daily, closely followed by Tiktok and Instagram, and 71% of 15-34 year-olds browse news via social networks, which for them are the primary means of accessing information (see presentation document, page 4).

• The second revolution is that of the players.

Firstly, the structure of the landscape has been turned upside down by the place occupied by international video streaming platforms, with a market dominated by Netflix, Amazon and Disney. Thanks to their technological and financial clout, they represent growing competition for our national groups in terms of acquisition, costs and diffusion of new audiovisual and film programs, and in terms of access to talent. This climate of hyper-competition, which is far from stabilized, is driving consolidation operations, such as those seen in the United States in recent years (Disney-Fox, Warner-Discovery, etc.).

(see presentation document, page 5) Secondly, the landscape is also being impacted by the growing weight of digital players, most of them non-European, who alone absorb more than half of all media advertising resources. In 2022, our traditional media will derive just 12% of their total advertising revenues from their digital supplies. In the same year, 66% of digital advertising revenues in France were captured by 3 non-European players: Google, Meta and Amazon.

• Third revolution: the content distribution revolution (see presentation document, page 6)

DTT reception, which has long dominated our landscape, is now facing stiff competition. In sharp drop, it is now the only mode of access to television for just under 20% of households. By contrast, connected TV sets are growing very fast: 88% of TV-equipped households had a smart TV by the end of 2022. Direct-to-home (OTT) distribution is overturning the traditional box model.

The TV set is becoming a veritable application store, like our smartphones. Non-television uses already account for between a third and a half of the time spent by 4-34 year-olds.

Under the provisions of this brief overview, you'll have understood: the world is changing before our eyes, and these changes have far-reaching consequences for our national players, both public and private, for our cultural sovereignty, and also for our model of independent, pluralist information.

And in the context I have just described, it would have been incomprehensible if the regulator had not also changed to better support operators and the public alike in the face of this new situation. That's why we created Arcom, and I'd like to take this opportunity to thank Parliament, and your Committee in particular, for having enabled this in-depth transformation of the Authority over the past 5 years, law after law - this year, I believe, is the 12th.

2. As the density of its first activity report testifies, Arcom - and this will be my second point - is a fully operational institution.

2.1Firstandforemost, our remit now extends to three increasingly interwoven families of players:

• firstly, of course, the traditional audiovisual media - television and radio and their digital extensions - which continue to play a predominant role in accessing and financing information, culture and entertainment. We ensure that their obligations in terms of plurality, representation of diversity and honesty of information are respected;
• secondly, video-on-demand services, including international ones, which, since the 2018 "AVMS" directive, now contribute to the financing of French creation, under our supervision. We have published an initial assessment that highlights the dynamic nature of their contributions: €140 million for 2021 alone, half a year after the first application of this regulation;
• finally, online platforms, social networks or search engines, whose means we supervise to fight against false information, online hatred and inappropriate content.

Our scope of action thus extends from TF1 to Meta, via Radio France and Netflix.

2.2 Secondly, since January 1, 2022, Arcom has been hard at work fulfilling its various missions while completing its transformation process.

As a statement of case, I'd like to mention a few of the major events of 2022, a year that can easily be described as unprecedented for the institution:

• The presidential and legislative elections, which mobilized our teams in charge of plurality, in close collaboration with the audiovisual media, platforms, parties and the teams of the various candidates. We are now preparing for the European elections in June 2024;
• major consolidation projects in the sector (TF1-M6, the Vivendi group's proposed takeover bid for Lagardère), which required in-depth investigation on our part;
• the appointment process for the presidencies of Radio France and France Médias Monde;
• the implementation of our new prerogatives in terms of protecting creation and fighting piracy, with over 1,600 unlawful sites blocked in this first year in the sports sector alone. There is a before and an after to the creation of Arcom, in this respect;
• strengthening our European and international commitment, both within the European network of regulators and within the French-speaking network, of which we have taken over the presidency until 2024.

I'm not forgetting, of course, other projects no less essential to this 2022 review, such as the launch of the podcast observatory, the rollout of digital terrestrial radio, which now covers over 50% of the in mainland population, our new "Children and Screens" campaign, and the conclusion of climate agreements.

At the same time, we also had to complete our transformation, with the enlargement of the college to 9 members, the adoption of a strategic plan, the setting up of a creative department and the ramping up of our online platforms department, the merger of our social bodies and our management regulations, not forgetting the regrouping of all our employees on our premises. We will also be looking for a new location by the end of 2024, as our landlord has informed us of his intention to carry out major renovations, and therefore not to renew the lease on our historic Tour Mirabeau site.

3. This brings me to my third and final point, and our roadmap for the year ahead.

3.1. Between now and 2025, the institution faces a number of key milestones.

First of all, Arcom is fully committed to the deployment of the European regulation on digital services, which entered its first phase of application on August 25 for very large platforms. This text profoundly renews our missions in terms of supervising online platforms, and strengthens our position in the European game, both with the Commission and with our counterparts. To carry out these demanding missions, on which the expectations of public opinion are high, we are in the process of consolidating our teams, thanks to the means allocated to us in the 2023 draft legislation and which it is proposed to grant us in the draft legislation, if Parliament so decides.

In addition, the draft legislation aimed at securing and regulating the digital space, currently before your assembly, makes provision for us to be appointed coordinator for digital services for France alongside the French national data protection agency and the DGCCRF. We are actively preparing for this. The text also makes provision for us to take on new missions in the area of audience protection, particularly in relation to foreign channels under European legal sanctions and pornographic content accessible to persons under 18.

Next, Arcom is about to embark on a period that will have a major impact on the future of both television and radio, with several major issues on the agenda:

• First of all, the licenses of fifteen television services will expire in 2025, an issue of great importance for the sector, and one to which we are already committed. The government has also expressed the wish that France Télévisions should be able to deploy ultra-high definition in the run-up to the Paris 2024 Gaming Games, an issue that is also of interest to private groups and on which we will be ruling shortly;
• next, in the radio sector, we will continue our work to extend DAB+ and finalize our white paper on the future of this medium, the conclusions of which will be presented at the end of the first quarter of 2024;
• Finally, we have another major issue ahead of us: that of services of general interest, which aims to preserve the proper exposure of our national players and their programs in the new world of interfaces for accessing audiovisuel services, which I mentioned in my introduction. We expect to give a ruling on this matter in the coming weeks.

3.2 Finally, and more generally, Arcom intends to support audiovisual groups in their strategic reorientation.

In the context I've outlined, the status quo is not an option for our players, whether public or private. In fact, they are all engaged in strategic reorientations, which are leading them to make major investments. All these efforts underline the dynamism of our national operators, which is to be commended. Our groups now need to reach audiences where they are, which means strengthening their digital and editorial strategies. At the same time, they are engaged in a review of their distribution methods, which makes the issue of data control and valorization crucial.

For private players, this means finding new financial leeway, in particular to face up to the competition for advertising revenues that I mentioned earlier. In the face of disparities in regulations, the time has probably come to reflect on adaptations, whether in terms of sectors where advertising is prohibited or the system of legal notices in radio.

For public audiovisuel, the French government has just announced its proposed multi-year funding pathway for the period 2024-2028. On this point, in its annual opinions on the execution of contracts of objectives, Arcom has always emphasized the essential role played by public audiovisuel in balancing the landscape. On each occasion, it has stressed the importance of providing these companies with survival funding over several years, in order to preserve their independence. Arcom also reiterated that a strong public service is also a public service that knows how to organize editorial and organizational synergies, whenever necessary, to better fulfill its mission to serve the French people. In this respect, she believes that the successful merger of the regional networks of France Télévisions and Radio France will require unified operational management.

On all these subjects, the upcoming "Etats généraux de l'information" will provide an opportunity to engage in a global reflection to prepare the future of the sector and respond to the challenges of the moment. Arcom intends to make its contribution, in particular through the production of two studies we have just launched, one devoted to the information habits of the French and the other to the advertising market.

At the same time, the work being carried out at European level, notably on artificial intelligence and media freedom, will also help to provide us with lists and instruments better suited to the transformations underway, so as to preserve our democratic and cultural model.

I would like to thank you for your attention and remain at your disposal to answer any questions you may have .