French Policy prevents Netflix, but Encourages Illegal Downloads

Nov 9, 2011
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This Post is a Guest Post by Willy Braun. Willy is a Paris-Based blogger from Toulouse, who currently works for EBG,  the biggest professional community in new technologies. He also hosts his own French-language blog, Brocooli.

In France, we LOVE movies & TV shows. But we don’t have an SVOD service like Netflix. Instead, We wait until films come to TV or, more likely, we watch them illegally.

Enter you, saying, “Hey! That’s a great opportunity for Netflix and their competitors.” But as we learn in the startup world: where there is no action, there is a good justification – It’s rarely a matter of having an idea. For the non-believers, consider this: Neflix has expanded into 43 new countries, including some European countries… but not in France!

[Enter French market]

In France, there have always been interventions from the State in the economy to ensure that the market works ‘properly’ and to make sure its citizens benefit from public goods. Culture is one of the numerous sectors where the state plays a big part: in the eyes of the state, every French citizen should enjoy their movie in a theater – French theaters are seen as apart of the cultural identity of France. And so, the State passed laws to make sure films keep being produced & exploited in theaters.

The state, therefore, enforces what we call “media chronology”. This refers to the life cycle of a film, from its release in cinema to when it becomes a free VOD offer. This aims at maximizing the overall revenue and guaranteeing producers their value, distributing the profit fairly between the stakeholders and allowing people to access their cherished content.

Let’s take a closer look…

Day 0: release in the theaters.
4 months: VOD one shot and DVD/Blue Ray (can be downgraded to 3 months under certain conditions)
10 months: first airing on a premium channel like Canal+ if the professional organizations agree to (if not they/we will have to wait 2 more months)
22 months: 2nd airing on a premium channel and first airing on free channel if the coproduction exceed 3,2% of the revenue)
30 months: first airing on free channels for any production
36 months: SVOD
48 months: Free VOD

When everything was simpler, in an era when filmed followed the theater – videocassette – TV lifecycle, this was a viable option. But now, when the world of film and TV is ruled by Netflix’s and Hulu’s…

The Poor French entrepreneur… 

In France, Free Home Video (FHV), the SVOD launched by Free, had a hard time convincing their customers it was a great deal to access unlimited content – perhaps because the unlimited content was 3 year old.

Now Canal+, the biggest French premium channel, is launching Canal Play Infinity, their SVOD offer, unlimited access of movies and series for 9.90€/month. They launched with 2000 movies and 700 episodes, with 50 new episodes/movies being added each month.

The offer is quite expansive when compared to the Netflix prices (almost twice the price than in the US). And on top of that, they still can’t get new content: the most recent movie will be from 2008 – No “The King’s Speech“, just “Asterix at the Olympic Games“..  Good luck Canal+, I don’t think you’ll have to worry about the Netflix in France.

The country paradox

Et Voilà France – A country where the state always tries to protect its citizens and its goods – And it often manages to do it; however the competition between law and innovation persists.

And what will French consumers do? Strike? Complain? No, they’ll just quietly watch their movies and shows…for free, in streaming.