Report: Free now has 20% stake in Canalplay

French service provider Free has acquired a 20% stake in Canal+’s subscription video-on-demand service Canalplay after exercising an option dating from its 2011 sale of its Free Home Video service to the pay TV operator, according to a press report.

According to L’Express, Free discreetly took up the option to acquire a slice of the SVOD service last year, marking a return to a market it withdrew from five years previously.

Free launched Free Home Video in 2008 as an early subscription video-on-demand service aimed at its own subscribers, offering a range of movies, series, music and kids content.

Further changes to Canalplay’s ownership could be in the offing next year, according to L’Express, citing an unnamed source. Such a move could open the way to a deeper entry by Free into the French streaming video world. Rival service provider SFR, owned by Altice – also owner of L’Express – has invested significantly in SVOD with the launch of its own Play service.

Like Canal+ proper, Canalplay has lost significant numbers of subscribers in the French market over the last two years, hit both by the arrival of Netflix and by SFR’s entry into the market. It has also been prevented by the French competition watchdog from distributing Hollywood studio content exclusively.

Canalplay’s base has fallen at a time when rival services, including Netflix, Amazon and SFR Play have grown their subscriber bases significantly.

The impact of Free into Canalplay’s ownership is unclear, and could potentially complicate Canal+’s relationships with operators Orange and Bouygues Telecom. The pay TV outfit has been deepening its partnership with Orange to provide a package bundled with Orange’s own services and, more recently, struck a deal with Bouygues Telecom to offer a mini-package available via the latter’s own set-top boxes.