Cablegate: France: Launch of Digital Terrestrial Television

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS PARIS 002265

SIPDIS

STATE FOR EUR/WE AND EB/CIP

E.O. 12958: N/A
TAGS: ECPS ETRD FR
SUBJECT: FRANCE: LAUNCH OF DIGITAL TERRESTRIAL TELEVISION

REFS: (A) PARIS 01520

(B) 04 PARIS 00886

1. Summary: Broadcasters have launched 14 free digital
television channels, initially to be available to about one-
third of the French population. Digital coverage is
expected to increase rapidly, as is the number of free
digital channels. Concerns have emerged about the
commercial viability of the profusion of channels, and its
potential effect on the subscription television market. End
summary.

2. March 31 marked the launch date of 14 free channels
broadcast via digital terrestrial television (DTV, or TNT
for its French acronym, "television numerique terrestre").
These channels are currently available to 35% of the French
population, mainly in urban areas. Seven of the channels
are new and seven are digital broadcasts of preexisting free
analog channels, including France 2, France 3 and TF1. This
is the first appearance of new, free television channels in
France since the launch of channel M6 18 years ago. A
special adapter device is necessary to receive the free
digital channels, and costs upwards of 79 euros (over 100
USD). The free DTV channels are broadcast on the MPEG2
standard, following a recent GOF decision to assign the
higher-compression MPEG4 standard to subscription DTV
channels. (ref A)

3. The availability of DTV will expand quickly throughout
France, and the launch of more free DTV channels is planned.
By 2006, DTV is expected to have a geographic coverage that
will reach 65% of households, and this coverage will
increase to 85% by 2007. Analysts predict that the free DTV
channels will be embraced as their availability increases:
forecasters expect that by the end of 2005, 31% of
households will watch digital television, 48% in 2006, 68%
in 2007 and 80% by the beginning of 2009. The Conseil
superieur de l'audiovisuel (CSA), the French television
administrator, is considering applications for DTV
broadcasts permits from eight additional channels. Between
one and three of these applicant channels are expected to
receive authorization to begin broadcasting in May 2005.
Within four to five years, observers expect that there will
be 20 free DTV channels broadcast in France.

4. The launch of DTV is expected to have a significant
impact on the French television market. One potential issue
is whether the sale of airtime to advertisers will generate
sufficient income to support as many as 20 free DTV
channels. Additionally, channels such as Canal Plus, which
are financed through paid subscriptions, are concerned that
they will lose subscribers to the free DTV broadcasts.
Prior to the launch of DTV, only eight million French
households received digital television, which was broadcast
via cable, satellite and ASDL, and was available only
through paid subscription. Some press reports have cast DTV
in a negative light, particularly for its dependence on what
some observers see as increased advertising for revenue.
Whether these additional channels provide a boon only to
French content producers or result in an increased demand
for imported content will be watched carefully by local
analysts and by us, particularly if DTV proves to be a
growth area for U.S.-based content providers.

LEACH

© Scoop Media