French TV Companies Report Ad Revenue Declines

Amid Euro crisis and competition, TF1 and M6 experienced a more challenging ad environment in the first half of the year.

France's TV ad market continued to suffer in the first part of the year with the country’s biggest private broadcasters TF1 and M6 announcing a dip in ad spending on their networks.

M6 Group saw its ad revenues fall 2.2 percent in the first half of the year while TF1’s ad revenue dropped 5.9 percent over the same period.

TF1’s net revenue totaled €1.3 billion ($1.6 billion), a slight but steady 1.8 percent rise compared to last year while M6 saw its total revenue reach €710.8 million ($873.3 million), a small 1.2 percent drop. Second quarter ad revenue fell 7.6 percent year-on-year at TF1 and fell 5.7 percent at M6.

TF1 CEO Nonce Paolini blamed the dip in ad revenue on “the current fragmentation of viewers” as the country’s TNT (DTT or digital terrestrial television) channels become increasingly popular and viewers aren’t tuning solely in to France’s main broadcasters TF1, M6 and public channels France 2 and 3 as in years past. Paolini, however, told analysts that the group was headed “in the right direction.”

TF1 has been cost-cutting in recent months including cutting hundreds of jobs, and, due to the dip in ad revenue, plans to continue in that direction.

“The TF1 group is responding to the difficult economic conditions and the changing competitive landscape by accelerating its adaptation, via ongoing cost-cutting and the launch of a review of processes and organizational structures,” the group said in a statement on Thursday.

Paolini had said in June that “TF1 isn’t experiencing the crisis more than anyone else.”

Other factors contributing to the drop in ad revenue include a tough overall economic climate due to the Euro crisis that continues to plague all aspects of the French economy including the entertainment industry. The economic slowdown has seen major companies from car makers to retailers reduce their marketing budgets. The networks and local analysts aren’t hopeful that the ad market will recover anytime soon.

"The uncertainty in the economy does not allow us to see a recovery in the advertising market in the second half of the year," the M6 group said in a statement this week.

France’s small screen landscape is undergoing a major shift as pay TV group Canal Plus makes its first foray onto free-to-air broadcasting by taking over Direct 8 and Direct Star and five new channels launch on the digital “TNT” platform.