Canal Plus reported its half-year results on September 22. Chairman Pierre Lescure said the full year results would show an improvement in the aggregate contribution from overseas earnings, but that Italian and Polish investments would continue to mean lower than expected net earnings. Canal Plus reported a half-year loss of Euro36 million.

Lescure said interactive services will provide a major profit centre to Canal Plus. "We have set up the first base of captive terminals for transactional services, with 1.35 million subscribers to Canal Plus [in digital form] and Canalsatellite as of 30 September, expected to reach nearly two million within two years." Bruno Delecour, head of Canalsatellite, added that he expects 20 per cent of Canalsatellite profit to come from interactive services within four years, to the tune of Fr120 million (pounds 12 million). This is based on two million subscribers paying Fr5 per subscriber per month on average. At present, 90 per cent of subscribers make some use of interactive services. The move to digital is increasing income, and over 25 per cent of French subscribers to the premium channel are now digital. Churn is steady at 9 per cent, in spite of a price increase in September. Commenting the recent football rights bidding war, Lescure said: "We have kept the best part over the next five years, an eternity in the digital age." The increased costs are taken up by cost cutting elsewhere spread to 2001 and the recent Fr5 a month increase in subscription price.

Canalsatellite estimated subscribers at the end of September to be 1.25 million, an increase of 285,000 in one year. Average monthly income per subscriber is Fr220; churn is about the same as for Canal Plus at 9 per cent. Canalsatellite made an operating profit of about Euro5 million in the first half of this year. The second half will be negative due to the cost of recruiting new subscribers. Next year the service is expected to turn a healthy profit.

Canal Numedia, the newly constituted subsidiary concentrating all of Canal Plus’ web activity, has become one of the most visited French sites, with 10 million pages viewed a month and a 14.8 per cent market share, expected to bring in Fr14 million this year (entirely from advertising). The Second World virtual community simulation of Paris now has 100,000 members.

Canal Plus has decided to spin Canal Plus Technologies, which exploits the Mediaguard conditional access and Mediahighway middleware, off into a separate subsidiary. "Our technology is used in 3.5 million digital decoders round the world," said Lescure. The company will be constituted on December 31 as a 100 per cent subsidiary, and its capital open to other investors during the year 2000.

In Italy Canal Plus has 1.935 million subscribers to all its services and aims to reach two million by the end of the year. In Poland the going is somewhat tougher, due to the competitive environment, but the launch of digital last November has helped to drive subscriptions.