Speech by Roch-Olivier Maistre at the "Rencontres de l'UDECAM" Tuesday, September 7, 2021
Speech by Roch-Olivier Maistre
on "Recovery through the creation of international champions
UDECAM meetings
Tuesday, September 7, 2021
Check against delivery
Ladies and Gentlemen, Presidents,
Ladies and gentlemen, dear friends,
Good morning, and many thanks to Gautier Picquet and the organizers for inviting me to open this third section of the UDECAM 2021 meetings, for which you have chosen "Recovery through the creation of international champions" as the theme. A highly topical theme.
The theme of recovery is all the more central given that the Covid-19 crisis has of course hit the audiovisuel and media industries hard.
The French Superior Audiovisual Council has regularly published a Barometer of the effects of the crisis, which has enabled us to gauge the impact of the crisis on the sector, and has also led us to make proposals to the authorities to support the players concerned, several of which have been taken up.
In 2020, the sector faced an unprecedented and, to be honest, rather paradoxical situation. The example of television publishers during the first containment period speaks for itself: after several years of erosion in audience figures, individual television listening time reached historic levels, with peaks of over 5 hours daily in April, but many advertisers were forced to reduce or even cancel their advertising investments. As a result, publishers were unable to capitalize on the renewed interest in television on the advertising market. Overall, advertising revenues for the major media fell by more than 10% compared to 2019, with a heavier impact for radio than for television.
Conversely, internet advertising has weathered the crisis much better, with growth of 3% in 2020. This is the only medium on which players have seen an increase in revenues compared to 2019.
The cyclical effects of the crisis have confirmed an underlying trend in the development of advertising investment choices between media, with the growing weight of the major digital players managing to concentrate a large proportion of advertising revenues. By 2020, for the first time, digital will have captured more than half of the advertising market in France, confirming a trend observed worldwide.
Against this backdrop, the crisis has also amplified the ongoing reconfiguration of the media landscape.
The media landscape was already undergoing profound change, and in particular consolidation (transformations in usage, diffusion media and vectors, formats, etc.). These consolidation trends are not unique to France: as we have seen in the United States, consolidation announcements have continued to multiply: the merger between Disney and Fox, and more recently the merger between Discovery and Warner Media. Beyond the GAFAMs, these are players in the media landscape with considerable investment clout. Last June, for example, transactions in the media sector reached $230 billion in the United States, underlining the dynamism of these transformations.
European initiatives have also been launched. France itself has already been involved in these consolidation movements for several years. We have seen it in the rapprochement between radio and television media, which began with RMC and then the takeover of RTL by Groupe M6. We've also seen it in television, with M6 taking over the Lagardère Group's TV channels, Vivendi taking over Canal and then Lagardère. These mergers have been underway for several years.
The question now is how our French players are adapting to this developing landscape, so that they can compete with the digital giants in terms of investment in audio and video, film and sports-related contdnt.
In thefirst half of 2021, the "triopoly" of Google, Facebook and Amazon accounted for 70% of digital advertising revenues. These players benefit from online advertising operators on search engines and social networks, and the growth in advertising investment is based on high audience ratings.
So it's only natural - or at least understandable - that certain players in the audiovisuel sector are getting their act together. For them, it's a question of developing their investment capacity, but also of preserving a form of cultural sovereignty so as to be able to offer, in a climate of growing competition, French stories with French actors and French settings. Our media groups have already adapted their supply, with the development of streaming platforms such as Salto; the British have a similar service with Britbox. This diversification into digital spaces, by enabling them to reach a wider audience, also favors a more transversal advertising supply, enabling them to remain competitive.
The planned mergers announced over the past few months are therefore in line with this strategy of preserving the investment capacity of our players and rebalancing the landscape itself.
These include the deals I mentioned earlier, as well as the merger of the TF1 and M6 groups, which Gilles Pélisson will tell us about in a few moments. As you can see, the regulator is open to and understanding of these mergers. The French Superior Audiovisual Council is not only there to preserve the status quo, to preserve what exists, it is there to anticipate, to support the players and preserve the overall balance of the landscape in a context of development. We ourselves are going to transform ourselves to take account of the changes underway, since we are going to merge with Hadopi in a few months' time, on January1 2022, to form the future French regulatory authority for audiovisual and digital communication, ARCOM. This reform, desired by the legislator, underlines the fact that the regulator too is adapting to developments in the media and digital landscape, not only to better control the players involved, but also to better support and advise them.
A word now on the next steps in the TF1-M6 merger project.
We've been officially seized of this operation since the summer, and it's an issue to which we attach the utmost importance, and which will no doubt keep us busy until at least the beginning of 2023. As of tomorrow, we will begin the cycle of hearings with all the players involved, i.e. the channels (TF1 and M6), but also producers, competitors, access providers, authors' societies, and of course the entire online advertising industry stakeholder.
The examination of this operation will first be the responsibility of the Competition Authority, to which we will issue an opinion, probably in the first quarter of 2022. We will then give a ruling on the request for approval of the change of capital control of the M6 channel, and will have to deal with the renewal of M6 and TF1's licenses, which expire in spring 2023.
As I've said, we'll be investigating in a spirit of openness and understanding, but also using the powers given to us by law. Our guiding principle will be to ensure that pluralism is preserved; pluralism of supply, of players, of sources of financing, of production, of editorial teams, all in the interests of viewers.
A word on the Loi Climate and Resilience Law
We are about to start implementing the Loi Climate and Resilience Law. We have argued against a coercive approach in this area, but with the desire to reconcile the urgency of the ecological transition with the financial equilibrium of our media. The solution we found is one of balance. A cycle of hearings is now underway with industry stakeholders, to draw up the charters that the legislator is asking us to oversee and for which we will be responsible.
As you will have understood, the French Superior Audiovisual Council is a regulator fully committed to the development of the audiovisual landscape, and to supporting the players in these transformations, so that tomorrow we have an audiovisual landscape adapted to the developments in today's formidable competition. I look at this landscape with confidence, because I know that the players are determined, motivated and mobilized. The French Superior Audiovisual Council will be at their side in this process.