France Telecom launches movie-making unit

Aleksandra Bosnjak, Analyst

France Telecom has announced that it will create a co-production unit which will be involved in the production of French and European movies and catalogue acquisition rights of films.

To most people across the industry, this news opens a new era in the life of a telco. Where else would this happen but in France, the country so passionately devoted to its own production industry, content and culture.

From a content rather than a telco business perspective, this news comes as no surprise. France Telecom has created a film rights division to co-produce 10-15 films a year and acquire libraries. To put this into perspective, the annual size of average French co-production activity with both European countries and Canada is around 100 co-productions. Looking only at the co-production portion of the French production industry and ignoring additional French-only movies plus co-ventures with the US studios, this seems to be an ambitious number for the first year of acquisition operation.

The film subsidiary will be run by a well-known and very successful French industry insider, Frederique Dumas, who produced Oscar winner Danis Tanovic's 'No Man's Land', Jan Kounen's 'Dobermann' and Golden Lion winner 'Before the Rain'. The unit itself will be part of France Telecom's content division, headed by Patricia Langrand, also a veteran pulled directly from the French film world.

This pact with content industry insiders sets a new scene for both France Telecom and European telco positioning as a whole. Clearly, they are moving beyond a pure 'pipe and content delivery strategy'. In fact, they are embarking on the riskiest route of all: financing local production industry and European/independent content, which has typically been backed by French or European broadcasters. Film producers and film-makers see this as a logical and welcome move, and in keeping with the pace at which the convergent content-telco industry is evolving.

However, the giant telco's move into the film acquisitions business, particularly co-productions, will increase pressure on its margins and the new outfit will have to perform and compete for film rights against an army of existing local and international content players, including the French Tier 1 production companies, major broadcasters and the broadcasters' own film subsidies. Good luck, France Telecom, and make sure you get the right mix of minority/majority co-production deals.

Aleksandra Bosnjak is a content and media analyst for Ovum's Broadband Content and Mobile advisory services. She is currently working on a number of broadband content topics, including IPTV regulatory issues and IPTV marketing strategies.