A N N U A L R E P O R T - Bouygues

Laurent Cabrol presents the
Teleshopping programme
34
Advertising*
In this context, the TF1 group recorded
an across-the-board increase in
net advertising revenue, with the TF1
core channel posting a rise of 0.1%,
French theme channels a rise of 16%
and internet activities a rise of 30%.
Advertising revenue increased by 3%
in the last quarter of 2005.
The structure of TF1’s advertising revenue
reflects shifts and changes in
household consumption patterns.
The food industry is still the biggest
spender on advertising on TF1, though
its overall expenditure declined by
9% in 2005 and spending on beverage
advertising slipped back by 8.6%.
Telecoms and services continue to
drive the market, with sharply rising
advertising budgets: the telecom
sector is the fifth largest advertiser
on TF1 and spending in 2005 rose by
25.9%, mainly due to advertising by
internet service providers. The sector
was boosted by the launch of
new products and services, such as
combined TV, telephone and internet
* source: Secodip
packages and liberalised directory
services.
Spending by the service sector, the
seventh largest advertiser on TF1,
rose by 3.6%, driven by employment
and recruitment agencies and banks
(+1.6%).
French theme channels
Sales by the TF1 group’s French theme
channels rose by 8.3% in 2005 (before
stripping out inter-sector sales) to
€138.9 million, sustained by:
Dolmen, TF1’s highly successful
summer serial
• the consolidation of TMC, which generates
annual sales of €5.2 million;
• the good viewing figures recorded
by TF1 group channels in the most
recent Mediacabsat survey (1) . Six
channels from the TF1 stable featured
in the top 10 in terms of audience
share, including Eurosport, the
leading cable and satellite channel,
equal with RTL9, and TV Breizh, now
in third place;
• a 16% increase in advertising revenue
from theme channels in 2005.
French theme channels recorded an
operating loss of €15.9 million in 2005,
though LCI and TV Breizh reduced
their operating loss by €3.2 million
and €2.7 million respectively.
Histoire, Ushuaïa TV and TMC, channels
newly acquired or created in 2004
and 2005, accounted for €9.3 million
of the operating loss.
Given the outlook for sales growth,
losses from theme channels are likely
to show a significant decline in 2006.
LCI should cut its losses by around
20% and TV Breizh is expected to
break even.
Teleshopping’s contribution to the TF1
group’s consolidated sales in 2005
amounted to €89.3 million, up 6.8%,
mainly due to strong growth in internet
sales (up 56%), which now account
for around 20% of the subsidiary’s
revenue.
The opening of a first store in Paris
in August 2005 and a second in
early 2006 marked a milestone in
the development of the business. The
Infomercials project (American-style
teleshopping) began on 15 October in
France on certain cable and satellite
channels and is expected to expand
rapidly in 2006. The Teleshopping subsidiary
reported an operating profit of
€8.2 million, giving a margin on sales
of 9.2%.
TF1 Entreprises suffered from a difficult
economic climate and a slowdown
in licensing and merchandising
business in 2005; in addition one of
its flagship brands, Star Academy, is
(1) Ninth Mediacabsat survey (27 December 2004
to 12 June 2005)