BUSINESSWEEK ONLINE : FEBRUARY 19, 2001 ISSUE
BUSINESSWEEK E.BIZ -- EUROPEAN COVER STORY ONLINE EXTRA: Q&A: CanalSatellite's Bruno Delecour: "Our Digital Customers Spend Much More" The chairman talks about his efforts to expand I-TV services and the payback they're already starting to bring France's Canal+ was the world's first major broadcaster to launch a digital interactive television service back in 1996. Since then, Canal+ has exported its model around the Continent, to Spain, Italy, the Benelux countries, and the Netherlands. And now that Canal's parent, Vivendi, has bought Seagram, it soon could cross the Atlantic. If so, one of the key men directing this ambitious effort will be Bruno Delecour, chairman of CanalSatellite. Appropriately enough, Delecour was born on the Fourth of July, America's Independence Day, in 1954, in the dreary northern industrial French town of Valenciennes. He graduated from the Ecole Nationale de la Statistique et de l'Administration Economique and holds a graduate degree in applied mathematics. The razor-sharp Delecour began his career a researcher studying broadcast issues, first at a government research agency and then at advertising firm Lintas. He joined Canal+ in March, 1985, to lead the marketing and promotion department. He took over the nascent Canal+ satellite division in 1992. Since then, he has spearheaded its expansion. Delecour is soon expected to receive an even more elevated position with the newly created VivendiUniversal. He spoke to BW's William Echikson about the I-TV future at Canal+. Q: You have invested a tremendous amount of money in digital broadcasting. When will the payback come? A: We're lucky to have begun before everybody else. Last summer, we reached the break-even position. We are making an operating profit. And the CanalSatellite franchise is worth a lot. When the Lagardère Group decided to invest in it last summer, they valued it at almost $3 billion. Q: Why did you need the Lagardère investment? A: We didn't need it financially. Our company was on the path to profitability. But we wanted their content. Lagardère is the broadcaster that makes many of the stations we show on the Canal [satellite system]. It also has giant radio and magazine operations. Q: How important is the interactive part of the CanalSatellite service? A: Viewers originally signed up to receive a larger number of stations. They also wanted better reception and better sound quality. Digital TV offered all of this. But interactivity was important. It is coming in small doses, and increasing regularly. We introduce it to meet real demands from our consumers. For us, this is a great opportunity to develop our business. Q: How about the new services, like horse-race betting online? A: The horse service was good news for us. It is a good example. It is totally original. You can gamble with your TV zapper and watch the race on the same screen. Our objective is to develop this type of service, which mixes programming with interactive value-added possibilities. You can have a travel show and then sell air tickets and hotel reservations, for example. Or in a talk show about books, you can sell the book. The nice thing is you can make the purchase in real time. Already we see that our digital customers spend much more than the regular nondigital ones. Of our $570 million in sales in the year 2000, about $100 million will be thanks to new interactive services, from horse betting to online games to T-commerce [e-commerce over interactive TV]. Q: How are you expanding these services across Europe? A: We began first in France and are gradually moving to our other stations in Europe. We just started for example with Telepui in Italy. Spain is doing well. It is taking off there, Scandinavia as well. Fundamentally, the same service works everywhere. People want more broadcasting choice and interactive services. We just have to adapt and localize the programming. And there can be regulatory issues: for example, horse racing is regulated differently in each European country. Q: Will you add a keyboard to your next I-TV systems? A: Yes, you will have both a remote control and keyboard. The important thing is that these tools stay simple. People need a remote control to control almost all the services offered on the TV. They will use the keyboard only to send e-mail. Q: Will the new set-top box allow you to offer more interactive services? A: Yes. It will allow us to double our services, no question about it. The new boxes will have an integrated hard disk, with Tivo-like abilities to tape and replay shows. Consumers want this service. It will also have the possibility of full Internet access. But we still are not convinced the consumer wants this service. Q: How do you see the relationship between the Internet and interactive TV? A: We don't think you will surf the net from your TV. We think there must be seamless links between the TV and the Internet. In other words, you watch a broadcast, and you can click from there onto the relevant HTML pages. We cannot separate the two worlds. The TV viewer needs to remain in contact with the TV world. At the same time, there will be more interactivity all the time. The hard disk in the box will let our viewers download lots of information from the Web -- and for us to send them lots of information from the Web. Q: How do you see interactivity developing? A: For me, the real killer application will be storing programs, virtual video on demand. You will program the box to download a movie or program and watch it at your ease. This will help us reinforce our pay-per-view services. Q: Isn't such a service already being offered in the U.S.? A: Yes and no. We will offer this service on one integrated box. In the U.S., all the functions are separated -- either you are on the Internet or on the TV. We are putting the two together, mixing our broadcasts with HTML and so on. Q: Will you have to give these expensive new boxes away to get viewers to use them? A: It will be renting, like we do with the present boxes. If you want to penetrate the market fast, you must either rent or give them away. There is no other way. Q: How do you compare with BSkyB? A: We are very close. Both of us have made interactive TV a priority. We both want greater numbers of stations and better quality. Both of us use this as a launching point to offer our subscribers interactive services. Remember, people watch both of us for an average of three hours a day, and that gives us tremendous power to push new services. Q: And what will be the impact of the purchase of Seagram? A: It will reinforce our plans. Seagram has strong movie and music divisions. Universal Music is the largest publisher of music in the world. This is a beautiful partnership. We can work on downloading music through our system. Universal also can give us priority access to films. In the future, we will develop stations together that allow both the downloading of music and video and music. Q: Can you export Canal+ products to the U.S.? A: That is an open subject. Europe and Canal+ are way ahead of the U.S. in interactive television. We have an early start and that gives us an advance. This advance gives us the basis for a potential partnership. But I won't say more. Watch in the coming months. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Europe's I-TV Advantage (int'l edition) TABLE: I Want My I-TV (int'l edition) ONLINE EXTRA: Q&A: BSkyB's Tony Ball: "We Will Compete with the PC Screen ONLINE EXTRA: Q&A: CanalSatellite's Bruno Delecour: "Our Digital Customers Spend Much More" I-TV's Software Upstart (int'l edition) ONLINE EXTRA: Q&A: Andre Kudelski: "Our Independence Is Our Strongest Force" Surfing by Boob Tube (int'l edition) ONLINE EXTRA: Q&A: Netgem's Joseph Haddad: "The TV Is a Simple Multimedia Device" INTERACT E-Mail to Business Week Online

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