Vivendi’s global ambition

It’s taken Vincent Bolloré a few years to grab hold of the unwieldy French conglomerate that was Vivendi, slim it down to a fighting weight and re-set its focus. But recent announcements by the French media giant have given the clearest indication yet that Bolloré sees its future as a European champion of content and distribution with global ambitions.

At stake, according to Vivendi executives, is nothing less than the very soul of European content creation, as well as the way consumers access that content. Bolloré’s moves are about standing up to US digital giants Google and Netflix, which have been dominating the conversation about what consumers want to watch and how they want to watch it.

It is also his ambition – through his €1.75 billion pact with Silvio Berlusconi’s Mediaset – to create another European media giant in the same league as RTL and FremantleMedia owner Bertelsmann. The deal with Mediaset, which sees Vivendi taking control of Berlusconi’s loss-making Mediaset Premium pay TV service, also provides a counterweight to Sky, which has pay TV operations in the UK, Italy and Germany. Bolloré’s ambition may also include taking its three-year-old German OTT subscription service Watchever to other European markets and maybe even beyond.

Bolloré may not have been strolling along the Croisette at the recent MIPTV, but his fingerprints were all over the launch there of a €25 million premium mobile content project that Vivendi Content president Dominique Delport called a “strategic need” to support European and Latin content creation.

Delport is also the global managing director of Vivendi’s advertising arm, Havas Media Group, and is keen to take back control of the data that the likes of Google, Facebook and Netflix are mining to target customers with advertising, promotions and content. He says that an estimated 50% of all consumers’ digital time is being spent on the four big digital players, with Google, Apple, Facebook and Amazon gaining access to an unprecedented amount of data. “We have a strategic need for every content player to take back control of your data,” Delport told his Cannes audience. To that end, he underlined the importance of a “global music and data alliance” between Vivendi-owned Universal Music and Havas.

But the big threat, and opportunity, according to Delport, is mobile, the “first screen” for younger consumers in particular. Today a staggering 50% of Generation Y’s video time is on mobile devices. And social also has a growing role; Snapchat has eight billion video views a day – a big change in video consumption that traditional media players cannot afford to ignore. To see what’s at stake, just look at the troubles of pay TV operator Canal+, which has been losing subscribers for the last several years, hitting Vivendi’s bottom line.

At MIPTV, Vivendi announced the creation of a new mobile content creation studio to sit alongside Canal Plus and Studio Canal. Studio+ has spent 18 months making TV-quality series comprising 10 x 10-minutes short-form episodes. Spending €1 million per series may seem like a lot in this space, but Delport believes that there is a place for premium mobile series. “We are hoping that the 10 x 10 concept becomes a new standard for the business,” he said.

Vivendi owns a large stake in Telecom Italia and a smaller one in Telefónica, and although no actual deals were announced by mid-April, its ambition includes selling the content to mobile operators, including in the US. Verizon, which already has a strong relationship with Havas Media via its AOL division that makes content for Verizon’s Go90 mobile service, could be a strong bet.

Bolloré clearly has global ambitions in content and new distribution platforms. He has been described as opportunistic in his deal-making, and the recent purchase by Vivendi of a 15% stake in FNAC, the big French consumer electronics, music and book retailer, falls into that bracket. But there is also a strategic plan. FNAC is a new distribution option for Vivendi’s content, including content from video game production houses Ubisoft and Gameloft, whose takeover the group has also targeted.

Reed Hastings, CEO at Netflix, said in the wake of the Mediaset deal that he doesn’t consider Vivendi’s move into Italy a threat, despite the fact that Netflix has yet to make much progress in that market and is only just about to launch its first original Italian commission, crime drama, Suburra. Netflix may not have a lot of local content in its non-US markets, but it does have a price point and ease of use that consumers find compelling. The Canal+ channels have been losing subscribers and money. Trying to make those subscribers stay – or divert them to new Vivendi-owned platforms – is key to success.

Bolloré and Vivendi still have a long way to go before they are masters of their own universe, but, with spring in the air, there are signs of the right kind of green shoots that could deliver a healthy year of growth.

Kate Bulkley is a broadcaster and writer specialising in media and telecommunications. [email protected]