Vivendi's Canal Plus creates new pay-TV channel in Africa

Wed Jul 9, 2014 2:46pm EDT

* Channel launched in Oct in 30 African markets

* Focus on French-language content, price is 7 euro/month

* Canal Plus aims for growth outside of France

* After asset sales, Vivendi focuses on media

By Gwénaëlle Barzic

PARIS, July 9 (Reuters) - Vivendi's pay-television operator Canal Plus is seeking to expand in Africa with the launch in October of a new French-language channel aimed at a growing middle class.

Dubbed A+, the entertainment channel will be included in subscriptions sold for about 7 euros a month in Canal Plus' roughly 30 markets in central and west Africa.

Jacques du Puy, who heads Canal Plus' overseas businesses, said the goal was to "very quickly" double the 1.3 million customers signed up to the package by enriching it with a mix of French and locally produced series and movies.

"Now is the time for us to develop our business in Africa," du Puy told at a press conference on Wednesday.

For Vivendi, the move illustrates how it seeking to develop its media businesses after selling its French telecom operator SFR and video games maker Activision Blizzard in a two year-long strategic overhaul.

Once the SFR sale closes later this year, Canal Plus will be the largest driver of Vivendi's results, bringing in roughly 40 percent of operating profit compared with 33 percent for Universal Music Group and 27 percent for Brazilian telco GVT.

But Canal Plus is under pressure in its French home market where it is losing customers because of more widely available free channels and the rise of Al Jazeera's BeIN Sports, which has poached rights to some premium live content such as Wimbledon tennis and Champions League soccer.

To cope, Canal Plus wants to grow internationally, building on its current operations in Poland, Vietnam, in French-speaking Africa, and more recently in Canada. The overseas businesses now account for about 40 percent of Canal Plus' operating profit and subscriber base, the company said on Wednesday.

The company could also consider acquisitions to beef up Canal Plus, sources familiar with the matter earlier told Reuters.

The focus on Africa also dovetails with the interests of Vivendi's new chairman Vincent Bollore, whose family-owned company Bollore Group runs a large transport and logistics business across the continent.

Although revenue per subscriber is much lower in Canal Plus' African markets than in France where packages sell for 16 to 35 euros a month, it is much cheaper to produce programmes there.

With the A+ launch, Canal Plus aims to further tailor its content to local tastes. Present in Africa since 1991, it has co-financed some local film projects and broadcast sporting events like the soccer African Cup of Nations, allowing it to double its subscribers from 2011 to 2013.

The pay-TV operator hopes that A+ will allow it to woo new customers. The channel is being produced by a team of 15 people based in Abidjan in Ivory Coast, and has a budget of "multiple million euros" said du Puy, without being more specific. (Writing by Leila Abboud, editing by David Evans)