Orange’s management does not believe in making direct investments in the media industry and has no plans to increase its involvement in the content business the model adopted by a number of its peers, according to CEO Stéphane Richard.
Speaking to analysts after Orange’s latest quarterly financial release, Richard said that he did “not believe in a strategy based on heavy investment in content rights or pay TV activities”. He said that the Orange Cinéma Series service in France would “more or less” break even this year and that its budget was minuscule compared with Orange’s business as a whole. “It’s a marginal aspect and we have no plans to increase our investments in content,” said Richard.
Richard said the content business was “a different business that requires different skills”, adding that “no-one has ever really proved that there is a significant synergy” between the access network business and content creation.
Richard said that Orange does have to secure access to content for its subscribers, but that the route to do this was to take part in joint projects with others, as in France, or to tackle problems with the antitrust authorities, as in Spain, where Orange has argued that Telefónica, which controls 80% of the pay TV market, must make more of its content available to rivals.
Separately, Richard said that Orange’s goal in Africa, where it has recently ramped up its investment activity, with the acquisition of a controlling stake in Morocco’s Méditel and a deal with Bharti Airtel to buy four of its African subsidiaries, was to achieve “critical size” across “the whole continent”. He said that Orange’s MTN was currently the only truly pan-African telco and that the company’s strategy in the continent would deliver long-term value creation for shareholders.
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