11
Annual Report -
2013
-
Vivendi
Group Profile
| Businesses | Litigation | Risk Factors
1
Strategy
1.3.2.
Vivendi’s Strengths in Becoming a Global Media Player
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Changes in governance
On November 26, 2013, the Supervisory Board announced several
important changes in Vivendi’s governance.
The Supervisory Board resolved to:
appoint Vincent Bolloré as Chairman of Vivendi’s future Media
entity;
appoint Arnaud de Puyfontaine as Senior Executive Vice President
of Vivendi’s media and content activities. Having served in this
capacity since January 2014, he brings international vision, media
experience and digital expertise to the position; and
appoint Arnaud de Puyfontaine and Jean-Yves Charlier to the
Vivendi Management Board, chaired by Jean-François Dubos.
In January 2014, the management team was strengthened by Hervé
Philippe’s arrival as Vivendi’s Chief Financial Officer, replacing Philippe
Capron. He has significant financial expertise, largely acquired at the
former French Securities and Exchange Commission (COB, now the
AMF), and at Sagem. A former Executive Director and Chief Financial
Officer of the Havas Group, he has well-recognized experience in the
media industry.
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Leading content and media companies
Vivendi is among the few multimedia groups to be a leader in the entire
value chain of content producers.
Vivendi’s future Media entity will be based on a combination of three
highly competitive companies (Canal+ Group, Universal Music Group
and GVT), which are capable of creating, producing and distributing
exclusive musical and audiovisual content:
Canal+ Group is the leading French audiovisual group, and also
operates in certain emerging markets and countries (Africa, Poland
and Vietnam). In recent months it has secured and acquired major
broadcast rights in film and television (namely Warner Bros.
and HBO studios), as well as in sports (namely Formula One and
Top 14). At the same time, Canal+ Group has developed free-to-air
television, including with the acquisition of the D8 and D17 channels
in France. Finally, together with Studiocanal, Canal+ Group has
become a leading European player in film production, co-production,
acquisition and distribution;
active in 77 countries, UMG is currently the world leader in recorded
music, with a market share of over 30%, and is one of the leading
global music publishing groups. Benefiting from a rich diversity of
labels and talents, the Group creates musical content adapted to all
consumer tastes. UMG also owns Bravado, a company specializing
in derivative products and the only one in the industry to offer a
complete merchandising service;
in Brazil, a prime growth country, GVT is a telecom player as well as
a media player. Its high-speed, high-performance and competitive
offering has made it a natural content distributor. This strategic
transition is particularly evident in the growth of its pay-TV activity.
Just two years after its launch, GVT’s pay-TV offer has attracted
600,000 subscribers.
Finally, Vivendi combines rare and valuable expertise (management of
artists and talent, content publication, trend identification and choice of
concepts) in the global competition for intellectual property.
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A digital transition well underway
Vivendi has been pragmatic in the pursuit of its transition to the digital
platform. The conversion from analog to digital is well underway:
television: in 2013, Canal+ Group entered into important agreements
with major distribution platforms: YouTube in France to launch 20
free channels and Dailymotion in Canada to offer series, films and
video documentaries by subscription. A few months ago, it also
launched a new application (the “myCanal”) to allow subscribers to
receive Canal+ and Canalsat programs on all devices;
music: at year-end 2013, digital media represented approximately
50% of UMG’s total sales of recorded music (compared to 44%
in 2012 and 39% in 2011). In addition, UMG holds 47% of Vevo (the
first multi-channel network on YouTube) and has acquired a number
of minority interests in digital platforms (including Spotify, Deezer,
Rhapsody and Beats).
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A dynamic and resilient portfolio
Compared to the other large media groups, Vivendi’s activities are less
exposed and less susceptible to unexpected economic events. This is
largely due to the combination of two economic models that secure the
Group’s long-term revenues:
in the income model, on which creation activities are based (UMG
and Studiocanal), musical and audiovisual content have a long-
term value in their use, firstly as “fresh” content, then as “catalog”
content. These powerful, multi-territory rights catalogs guarantee
recurring revenue and constitute significant asset value. With more
than two million titles, UMG has the largest catalog of recorded
music in the world, while, with over 5,000 titles, Studiocanal holds
the largest European catalog of movie rights;
in the subscriber model, on which its distribution activities are
based (Canal+ and GVT), the billing of services to customers each
month ensures regular income.
In a digital environment undergoing constant and rapid change, these
two models allow Vivendi to continue profiting from the creation and
distribution of its content over time.
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A policy of corporate social responsibility fully
integrated into its strategy
By formalizing the scope of responsibility of its media sector and
cultural industries, Vivendi has defined a Corporate Social Responsibility
(CSR) policy directly related to its activity as publisher, producer and
distributor of content. This policy is based on three strategic issues:
protecting and empowering young people in their use of digital media;
promoting cultural diversity in content offerings and artistic expression;
and knowledge sharing, including pluralism of information and media
access and education.
