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Canal+ set to lose €400 million unless action is taken, says Vivendi

The Vivendi office is seen in Paris on Wednesday, May 17, 2006.Canal+ will lose €400 million this year if “nothing is done” to arrest its decline, according to Vivendi chief financial officer Hervé Philippe.

Speaking on an analyst call on Vivendi’s quarterly results, Philippe said that the €59 million loss recorded by the pay TV group in the first quarter was “quite positive” by comparison with what could be in store down the line, unless action is taken.

Philippe said that Vivendi was working on a number of initiatives to cut costs over the coming year that would be unveiled in the coming weeks.

Vivendi CEO Arnaud de Puyfontaine, speaking on the same call, hinted that one change at Canal+ might be to reduce the amount of the broadcaster’s content that is shown free-to-air element. Answering an analyst question on whether Canal+ should become an exclusively paid for channel, Du Puyfontaine said that “this is something that we have in mind” and that Vivendi was working on a number of different options. He said that Canal+ Group already offers a strong free-to-air proposition via its D8 and D17 channels and that there is a “need to reinvent the new Canal+”.

Referring to Vivendi’s agreement with Mediaset, De Puyfontaine reiterated that Vivendi has a goal of becoming a “solid player in southern Europe” through its agreement with Mediaset, including the acquisition of the Italian broadcaster’s pay TV arm, Mediaset Premium.

He added that the company was keen to pursue new avenues of collaboration with Telefónica in Spain and Latin America as part of the same southern European strategic focus.

Referring to Vivendi’s recent acquisition of an interest in French retailer Fnac, De Puyfontaine said that “the rules of the game are changing” regarding content distribution and that the investment was “strategic”, highlighting Fnac’s initiatives in digital distribution of music and video and plans for international expansion.