Home Analysis French TV ad revenue share steady at 31% of total, but falling...

French TV ad revenue share steady at 31% of total, but falling in real terms

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The French regulator, the CSA, has just completed an extensive investigation into the TV advertising sector in France, spurred by the challenge posed by Internet distribution.

Entitled New advertising spaces: implications for TV, the report begins by observing that – on the face of it – the traditional, linear TV advertising market has been pretty resilient in France. While the Internet’s share of the country’s advertising pie has increased from 2% in 2005 to 26% in 2015, TV still has 31% of the total advertising market there – as, indeed, it did ten years ago (see Figure 1 below).

Figure 1: Sectoral shares of total French ad market (2005, 2015)

Advertising sector 2005 2015
TV 31% 31%
Press 46% 24%
Outdoor 12% 11%
Internet 2% 26%
Radio 8% 7%
Cinema 1% 1%

NB 2005 total: €10.5bn, 2010 total: €10.4bn

Source: IREP, CSA analysis

However, that apparent level of stability masks the fact that, in real terms, TV ad revenues have actually fallen by 15% between 2005 and 2015, reports the CSA. That shortfall has been met, in part, by an increase in the amount of public funding, and to a much lesser extent, pay-TV revenues. Thus, as a share of all French TV revenues, TV advertising’s slice of the cake fell from 45% in 2001 to 38% in 2014 – while the proportion from public funds (a combination of TV licence fees and audiovisual subsidies) rose from 29% to 33% over the same period. Pay-TV revenues rose from 26% to 29% (see Figure 2).

Figure 2: Share of total French TV revenues (2001-2014,%)

‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14
Pay-TV* 26% 26% 27% 25% 26% 27% 27% 27% 28% 27% 27% 26% 28% 29%
AV levies 29% 29% 29% 28% 28% 28% 28% 29% 31% 30% 31% 32% 33% 33%
NAR** 45% 45% 45% 46% 46% 45% 46% 44% 41% 43% 42% 42% 39% 38%

* Net subscription income from Canal+ and pay-TV channels, exc. commission
** Net advertising revenue

Sources: CSA, IREP

The CSA notes that falling ad revenues have made the past decade particularly difficult for France’s commercial TV groups, such as Nextradio TV, where TV advertising accounted for 99% of receipts last year; TF1, where the equivalent proportion stood at 78%; and Métropole TV, where it accounted for 65% of income. This fall coincided with a period during which those same companies were required to significantly expand their investments in programming because of the launch of DTT in 2005, which led to the launch of 17 new free-to-air channels.
Ironically, the reduction in TV ad revenues has itself had a knock-on effect on public funding. As the CSA points out, French audiovisual subsidies derive in part from levies imposed on the broadcasters, who are required to make a contribution to original French TV and film production, calculated on the basis of their total income. This meant that the size of the overall AV subsidy pot fell by 2% between 2011 and 2015, says the CSA.

Although the TV companies’ income from new Internet-based TV delivery formats such as catch-up TV and VOD tripled between 2011 and 2015 from €30m to €90m, in absolute terms they have had little impact so far: the CSA calculates that these new sources of revenue accounted for only 3% of total TV ad income in 2015.
Overall, Internet advertising revenues in France stood at €3.2bn in 2015, of which €309m derived from video advertising.

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