By selling OCS to Canal+, Orange signs the end of its costly adventure in content
Orange stops the costs in television and cinema. After almost two years of discussions, the telecom operator formalized, on Monday January 9, the signing of a memorandum of understanding with Canal+ for the takeover of its OCS channel (Orange Cinéma Séries) and its film production company Orange Studio. “Canal+ will become, at the end of this transaction, the sole shareholder” of both companies.
The television group already held 33.34% of OCS since November 2011, which gave it a right of first refusal in the event of changes in the channel’s capital. The transfer project will be submitted for information and consultation to the staff representatives of the two structures. They have a total of around 80 employees. It will also be presented to the Competition Authority. This process should take several months. Once the takeover is effective, the group should proceed to mutualisations and synergies and the commercial offers will evolve in time.
The financial terms of the transaction are not disclosed. However, Orange is going to be out of pocket. According to a source familiar with the matter, the telecom operator has undertaken to compensate the losses that OCS and the studio will continue to suffer over the next four years to the tune of just under 100 million euros, confirming a log information The echoes.
Willingness to refocus
With a cutting-edge offer, reinforced until the end of 2022 by HBO’s exclusive broadcasting contract in France (Game of Thrones, The Sopranos…), OCS has managed to forge a reputable brand. Sold for 10.99 euros per month, the channel has around 3 million subscribers, far from Netflix’s 10 million or Canal+’s nearly 24 million. This number of consumers is insufficient to ensure its profitability. Since its creation in November 2008, OCS has accumulated more than 400 million euros in losses. Orange Studio also loses several million euros per year. The end of the contract with HBO, which plans to launch its own platform from 2024, with the support of its shareholder Warner, weakened the operator’s channel a little more.
By selling OCS and its studio to Canal+, Orange wants « perpetuate [leur] development, while preserving jobs and pre-financing creation”. Renewed for three years on 1is January 2022, the agreement signed with professional film organizations provides that OCS engages “a guaranteed annual minimum of 20 million euros” in favor of the European cinematographic sector, including 85% for cinematographic works of original French expression and 75% minimum in independent production. Part of this spending can go to Orange Studio, which has distinguished itself in recent years by financing films like The father, The Lost Illusions or The artistawarded five Oscars in 2012, including Best Picture.
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