Gilles Pélisson: TF1 is ready for new challenges
BY Georgi R. Chakarov
As MIPTV celebrates France as Country of Honor, TF1 Group CEO Gilles Pélisson talks with Georgi R. Chakarov about the major achievements of his company during the past year and the challenges they will be facing in 2019. The chief executive is convinced that after the record 2018 the Group will continue to grow by creating even more value for its content, building its relationship with advertisers, offering a new personalized experience to its viewers and establishing new alliances with French and international partners.
Mr. Pélisson, 2018 was an excellent year for TF1 Group which continued to grow for a third year in a row. Could you mention some of the major highlights for your company during the past year?
When you look at the way we have progressively redeployed TF1 in new businesses, it feels like going from a great sailing boat to a trimaran. We have a very solid broadcast core business that has proven its ability to grow, both in terms of audience and revenues, to which we added last year two boosters with a production house on one side (the Newen Group), and a digital entity we built up on the other side, just renamed Unify. Looking closely at the TV activity, we have seen an increase in the group’s audience, which was delivered thanks to our multi-channel strategy. The latter has allowed us as a group to widen the gap to our main competitor, particularly in commercial targets (32.6% W<50 audience share). And the same is also true for the premium channel TF1 which by recording an increase in its audience (22.5% W<50 audience share) has strengthened its position as the leader, a unique phenomenon in Europe. Along those lines, another highlight of 2018 was our new revenue line, thanks to our agreements with telecommunications operators, for a better value sharing. In the end, our annual results, praised by the financial markets and the economic press, were a great source of satisfaction as they gave credit to our strategy.

Looking ahead, what would be the main goals of TF1 for 2019? In which segments are you planning to grow?
2018 was a game changing year. After growing-up comes the time for consolidation and structuration. Thanks to our new growth drivers, we are ready to meet our challenges: creating even more value for our content and their creators, for our TV viewers and our advertising brand announcers, all this while strengthening our bond with our audience by offering them a personalized television experience.

Regarding Newen, we have two main objectives: to further strengthen our links with French broadcasters and to develop our relations with new international players. We are very proud that Newen is now the French producer which works with all platforms: Netflix, Amazon, and even Snapchat... And they will continue their build-up of European production companies. Regarding Unify, there is a first objective of federating the various entities we acquired throughout 2018. Until the end of last year, they were startups at different stages of maturity, with their own business model but with little or no collaboration between them. The launch of Unify is a founding step in the creation of a pole articulated around 3 business lines: publishers with very prominent brands, solutions for brands and services and social media e-commerce. As our footprint is now in 10 countries, we will scale up all these activities.

On our broadcast activity, the objective is to continue to develop our various sources of revenue beyond TV advertising. In addition to distribution revenues, this requires the development, through our replay, of our digital revenues, and our revenues from data. We have about 25 million consumers, logged in via our MYTF1 platform, to which we must add the Unify communities. We have launched a complete revamp of our MYTF1 platform, which is totally focused on the user experience, with a design and navigation that meets the new market standards.
All this will enable us to address even better the new advertisers’ needs, in a very unique combination of TV and digital media.

How would you describe the situation on the French TV market? The ad market enjoyed a strong 2018. What do you expect from 2019?
It’s not a coincidence that the French TV market is being honored at MIPTV this year. Our country demonstrates more and more the ability to attract and retain unique talents, to export various content (mainly animation, documentaries, dramas, etc.) with a record year in 2018, building its worldwide reputation and outreach. The French TV advertising market grew by 2.4% and some advertisers are returning to television because they have appreciated its efficiency, the transparency of its performance measurement and a safe environment for their brands.

However, the French market is still lagging behind Germany, Italy or the United Kingdom. This situation is largely due to the strong regulation of our market, which forbids some territories and ultimately limits its growth. We must note that the liberalization of sponsorship in 2018 has not affected other media. Radio and OOH are on the rise and the press has declined less than in previous years. We hope that this will allay the fears and enable to make rapid progress regarding the banned sectors or the authorization of addressable TV advertising, which would give some oxygen to French ad market.

What will be some of the highlights in the programming of TF1 this year? Are you going to increase spending on local productions?
Local production is key in our editorial proposal. We held 42 of the 50 best rated French fiction productions in 2018 and already the first two of the year. French fiction enables us to program about 80 new evenings and this is increasing. Not to mention our daily soap in access prime time, Tomorrow Belongs to Us (Demain Nous Appartient), produced by our subsidiary Newen. This year we expect lots of high-quality programs. One of the most ambitious of them will undoubtedly be Le Bazar de la Charité, an event series, with a prestigious cast which will be broadcast on TF1 in the second half of 2019. This resolutely modern production required 5 months of shooting, with 3.000 extras, 1.500 costumes, 185 technicians and 150 days of preparation. We will alternate miniseries like Infidèle, Le Temps est Assassin, Pour Sarah, Le Bazar de la Charité with primetime events. We also have very event-driven entertainment projects and have just signed the phenomenon format The Masked Singer which, we are convinced, will successfully enrich the list of our hits formats such as The Voice, Dancing with the Stars or Survivor. In the field of sport, we will propose 4 major events. We are very excited to broadcast the Women’s Football World Cup being played in France, or the Rugby World Cup in Japan in September and the upcoming Men’s and Women’s Handball World Championships.

As you see, we pursue an ambitious content policy with new editorial and artistic approaches and new ways of collaboration. And as you know, the TF1 Group is the leading private investor in French creation and an historical key partner of French producers and authors, spending about €1 billion on programs each year. We intend to stay that way. But we can only do so in a creative ecosystem that allows us to better amortize our investments and thus maintain the virtuous circle of creation.

The Masked Singer

TF1 Group is also focused on growing its international business thru Newen Group. What are your plans in this respect and which are the markets which you see as strategically important?
This move is part of Newen’s strategy, but the idea is not to be everywhere. Newen is targeting countries where there is potential in local drama, with content that can travel. Newen’s team is also looking for companies which share the same DNA and this is what led to the acquisition of Tuvalu in the Netherlands, then Nimbus and Pupkin and recently De Mensen in Belgium.

Is TF1 content popular among the international buyers? Which are some of your biggest hits?
Because we have high standards and a rich and varied offer, some of our stories have success all around the world. Among them, our crime series are very popular. For example, Profiling has been sold in 88 territories. Munch, the first legal series in France, for which we have 18 episodes available will soon become international. No Second Chance based on Harlan Coben’s bestseller has been sold is 130 territories and Luc Besson’s first TV series No Limit was distributed in more than 90 countries. With our event series such as Le Bazar de la Charité, TF1 is at the forefront of exceptional content with a global focus. As such, the pre-financing partnership that TF1 Studio, our distribution division, has just concluded with Netflix is an illustration of the attractiveness of TF1 French creation to global players.

Is TF1 Group looking to enter new markets?
With a presence in 10 foreign countries today, the TF1 Group is becoming more and more international. In a context that is more globalized than ever, you must be able to reach a relevant size, by acquiring new businesses or signing national, European, international alliances. That’s what we’ve done in recent years and we will continue to do in the years to come, looking for new opportunities in France and abroad.

France TV’s President Ernotte has called Netflix “The Devil”. Do you agree with her fears and how do you plan to compete with international VOD giants entering France?
I have mixed feelings towards these actors. They are for many in a new golden age of the series, TV content par excellence and have transformed access to content. From a certain point of view, they contribute to the artistic emulation of the whole sector. This strong creative dynamic, we were able to capture it at TF1 and that makes us offer today series with very strong asperities that delight French audience and interest more and more international markets. They also represent new opportunities for producers like Newen. These are undoubtedly positive points.

The major challenge of the coming years is to find the right balance between national actors and these international suppliers with a key objective: to enable better financing of outstanding local content and the development of high-quality EU production. In this respect, we need to be supported by public authorities so that these platforms contribute to the financing of the sector in line with their financial surface and are subject to the same rules and taxes as local actors. This is an essential condition for a virtuous financing of local creation. We need also a greater transparency from them on how our programs perform once they are exposed, to build long-term relationships.

At what stage is the development of the joint French VOD platform Salto? How do you explain the continued growth of Netflix in France despite the boycott of the local players?
Salto is moving forward and well, being examined by the French Competition Authority. We think that Salto can be a great solution for French audience to enjoy all kind of contents, mainly local. Moreover, the announcement of the alliance between the BBC and ITV to launch their own BritBox platform in the second half of 2019 convinces us that this is the way for local players to find their place and to create the conditions for a virtuous and sustainable ecosystem. The world of OTT platforms will soon change with the introduction of major new players as Disney, Apple TV, Warner Media, etc., competing with Netflix.

Are you planning to launch new channels in France? Are you still facing difficulties when it comes to charging pay TV operators for your content and channels?
It’s not on our plans for now to launch new channels. Our priority is to continue to develop the audience of our channels, TMC, TFX, TF1 Series Films and LCI, around the premium channel TF1. Regarding the remuneration of our content and channels by telco operators, it was critical for us that the value of our content be recognized and monetized, as it is the case in the US or in almost all European countries. After some significant challenges, we managed to move the lines by signing multi-year global distribution agreements with all telco operators and Canal Plus. In doing so, we played our role as a leader in transforming our sector in France and proved the legitimacy of our approach, without threatening their business model.

You recently launched the new digital division Unify. What is its strategic role in the Group?
We have launched Unify to strengthen our historical core business as a broadcaster, by boosting our ability to create federating content that generates engagement and value for brands. Unify will allow us to diversify our revenues streams with data, technology, social media e-commerce… The new synergies, both editorially and commercially, will reinforce our technological advantages, enhance our offer, and our ability to reach all audiences, especially women and millennials. Having such iconic brand as aufeminin, Marmiton (cooking), Doctissimo (health, well-being), will enable advertisers to address communities with digital marketing in a unique complementary way to television.
Born in 1957, Gilles Pélisson is a graduate of the ESSEC and Harvard business schools. A director of TF1 since 2009, Pélisson held various posts within Accor between 1983 and 1985. He became CEO of Eurodisney in 1995. Five years later, he headed up the management of the Suez-Telefonica consortium ST3G, and became non-executive Chairman at Noos, France’s leading cable network. Gilles Pélisson joined Bouygues Telecom in September 2001 as CEO. In January 2006, he became CEO and Board member of the Accor Group. Between 2011 and 2016, he held non-executive directorships in a number of listed multinationals and was involved in the launch of several start-ups as member of the Global Senior Advisory Board of Jefferies, the New York investment banking firm. Pélisson was appointed Chairman and CEO of TF1 Group in February 2016. He is a Knight of the Légion d’honneur and of the French National Order of Merit.
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