Culture is future » Financing and economic models


Contribution : "Television, the other power of culture, but for how long ?" by Pascal Lechevallier

At the all-powerful Internet era, the issue of the television power is raised because its erosion could lead the audiovisual industry to re-think its business models. With the consumers as arbitrators.

In 1962, Edgar Moran wrote in L’Esprit du Temps : « Today, it [the mass culture] must give a little bit ground – very small indeed - for mass media to the intelligentsia, conceding not only an elite sector to the traditional “high culture” but also a sector of transformations, researches to the new audiovisual arts, and maybe a ground for what could become a third culture.”

In thirty years, the third culture, this “audiovisual art” has become the reference for entertainment in France, offering at the same time to the French households the powers to contribute to the cultural creation in a very direct way by funding through purchases of movie tickets, videos, VOD and TV subscriptions. Some households, which the capacity to invest in the audiovisual culture has known a quick and deep transformation during a period that can be described as the “thirty Glorious years”.


Flexible audiovisual spending 

Thus, according to figures recently published by the CNC, French people spent 932 million euros in the audiovisual in 1980. In 2012, audiovisual spending by households reached 8 billion euros, which is nine times more than in 1980.

Cinema, widely centenary and first mass media for a long time, represented 46.2% of households spending in 1980. In the end of 2012, cinema which has never been in such a good health than in the beginning of the 2010’s, weighted only 16.2% for a recipe of €1.3 billion.

While the license TV fee used to fund the public channels came to 45.3% in the sector revenues in 1980, it weighted only 25.4% in 2012, representing at the same time more than 2 billion euros per year.

Emerging in the early 80’s, video reached its climax in 2004 with 2 billion euros and then started a slow period of decline, to weight only 13.9% of households spending in the end of 2012, barely offset with the emergence of VOD which expenditures have reached 250 million euros in 2012, a market share of 3.1%.


Essential paying services

The real phenomenon that has emerged with the birth of Canal Plus in 1984 is the pay TV. End 2012, the weight of TV subscriptions in France via Canal Plus, cable and satellite offers was 41.1% of households spending, more than 3 billion euros. In two decades, pay television has become one of the main instruments of power of audiovisual culture. Whether in the cinema, fictions or sports, the television by subscriptions has become the first financial for an audiovisual sector always more ambitious and guzzler in funds.

But the advent of the digital era could challenge this hegemony and reshuffle the power cards of the audiovisual culture. Everywhere in Europe, the channels of pay TV, as the unencrypted TV channels (financed by the advertisement), struggle not to give ground to the new conquerors of culture coming from the internet. The new delinearized audiovisual offers, mainly video on demand, whether transactional or by subscription are taking them off, questioning the distribution of the households spending. In the United States, Netflix has caught up HBO in the numbers of subscribers, in the United Kingdom, the offers of SVOD have gathered more than 3 billion of subscribers in less than two years. And everywhere in Europe, Amazon and Netflix are laying the groundwork for the future domination of the audiovisual sector.


Consumers as prescribers and decision makers ?

The proliferation of screens and means of distribution are leading to an explosion of TV, yesterday real tool for social and familial cohesion, as a rallying and unifying mass media. The C generation - the connected generation -   dreams of interactivity, multiscreen, multitasking and constant availability of their favorite programs: grown with an unchallenged TV, these young people are trying to build a new audiovisual balance in which their very low willingness to pay could force the industry players to rethink their business model. The succession of subscriptions for pay TV can be free subscriptions to delinearized channels financed by advertisement, drying at the same time the production chain.

" The power comes in part to consumers who are now able to create their own programming with powerful technologies and intuitive interfaces”. As explained by Bain&Compagny in its study published in November “The era of the prescription. The reign of abundance than the discovery” realized for the Forum d’Avignon 2013 : “The prescription is no longer the privilege of professional“.


The new audiovisual order is redrawing the borders of the powers of culture, a power that could be concentrated in the hands of a few global players, unless consumers decide otherwise.


About Pascal Lechevallier

Pascal Lechevallier manages a firm specialized in new media. He supports audiovisual and media professionals in setting up innovative digital strategies. Pascal Lechevallier is the founder of TF1Vision, TF1 group’s VOD service.

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On Twitter : @PLechevallier