France Telecom (Orange) has been one of the most successful telcos adapting to the video environment, attracting a healthy number of subscribers for both its DTH and IPTV services in France. Herve Payan, the company’s senior vice president of content services, discusses the company’s video strategy and plans to develop its “content everywhere” strategy.

IBC E-Daily: How ambitious will you be in video offerings?

Payan: It all depends on customer demand. When we launched IPTV back in December 2003, the question was, “What can we be in television?” The market was seen as saturated by other offers, but we did it, and it was a leap of faith. After a few years, we saw that 40 percent of our Internet subscribers in 2006 would not have come to us if television services had not been available. Consumers view television as an element of differentiation between the players. Having a better television offer is really important with us. We have the most comprehensive [video-on-demand] offering, and this is now very important. We have specific offers in sports, cinema. We are doing 3D, HD. This is all important. We have come a long way. Users see it a key differentiation element. You can add mobile TV to the mix, also. We have been pushing mobile TV. All of our premium offers are available on TV, PC and mobile. This is a very important part of our strategy. This is what customers want, content on all platforms.

IBC E-Daily: What are the challenges now you have a strong base of subscribers?

Payan: An important part of our content strategy is that we call it “content everywhere.” That means serving the customer on all the different terminals, PC, TV, mobile in whatever form and using whatever networks are available. That is quite important. Last year, we managed to get our first full offers on all of these different screens. There have been some interesting discussions recently by the executives of Time Warner and Disney on this whole issue of content on different platforms. As part of our strategy, we have also decided to reach the maximum number of customers on all these different networks, whether it is delivering pure IPTV or ADSL, which we started in 2003. We are doing this in Poland and Spain and other smaller countries. We have now have around 2 million IPTV subscribers in France. This is pure IPTV subscribers. We have another 400,000 subscribers who are using a hybrid solution of satellite and IP, so wherever a customer lives in France, we can offer telephony, broadband and TV. In remote areas, we can offer telephony and ADSL as well as TV over satellite and ADSL. We have around 2.4 million customers in France at the end of June. Two million were IPTV and the rest were satellite.

IBC E-Daily: How important has it been for France Telecom to have Orange TV available over satellite?

Payan: The satellite numbers have been in line with expectations. It now represents around 15 percent of our overall subscriber base. They allow us to cover 98 percent of the population. With pure IPTV, we are only able to cover about 50 percent of the population. With a mix of satellite of ADSL, we can virtually cover the entire population. We are also doing a similar strategy in Poland. Satellite is even more pivotal in our offer there, as we can only offer IPTV to around 30 percent of the population. Two-thirds of our customers in Poland take TV services from us via satellite. In a country like Poland, satellite is even more important.

IBC E-Daily: How are you looking to develop an HD component?

Payan: We were the first ones to launch HD service in France in 2006. We launched it very quickly. It has been something that has been part of our strategy since day one. We have pushing it. We started pushing it on ADSL, but we plan to push it more also on fiber. I think we have all the [free-to-air] channels available in HD. We have our own premium channels and more thematic channels, so I think we will have an offering of around 20 HD channels. We do it on satellite as well.

IBC E-Daily: Are your HD plans constrained by capacity?

Payan: We are more constrained on satellite than we are on IP for capacity. In ADSL, the more bandwidth requires, the less reach you have, but when you go to HD, it doubles your capacity needs. We will need more satellite capacity. We are expanding our channel offerings. We are negotiating deals this year for more satellite capacity, but yes, we are looking at more capacity. We may also need more capacity for other markets such as Poland.

IBC E-Daily: Will you need to get new, more powerful set-top boxes into the home?

Payan: Every two years, we are bringing new boxes into the home. There are no big changes in set-top boxes on the horizon. There is no real impact in terms of capital expenditure. We need to continue to invest in terms of infrastructure. We have started to invest more in content and the acquisition of rights, but¬¬ in the big scheme of things, they are still relatively small investments.