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Conversations about the media economy, and how to think clearly when things get messy.
This is Puzzle Problem Mess, conversations about the media economy and How to Think Clearly When Things Get Messy. In June 2025, Netflix and TF1, France's largest commercial broadcaster, announced that starting in summer twenty twenty six, all Netflix members in France will be able to watch the tier one channels and on demand content from tier one plus directly on Netflix. It was a deal without precedent for Netflix, and twelve months on, the partnership is now live for France's 40,000,000 or so Netflix subscribers, which is around 50% of connected TV homes in France. To mark the launch, I spoke with Francois Godard. Francois has been an analyst and adviser on international content related developments in sports, entertainment, and telecoms for more than twenty years and is based in Italy.
Dan Fahy:We discussed the Netflix tier fund deal in detail, but also widened our focus to take in the varied mix of broadcaster streamer partnerships that are emerging across Western Europe and The UK and ask, will we see more of these deals from Netflix? Here's Francois Godard. Francois, thanks for joining the podcast this morning. It's a pleasure. Europe seems to be a hotbed of activity insofar as broadcaster and streamer collaborations are concerned.
Dan Fahy:Let's start perhaps with the most interesting of all the collaborations, the Telefonica Netflix partnership. And I know you've profiled this in quite some detail. What should we know about this partnership?
Francois Godard:Well, it's very important, original, experimental. Let's start with the beginning. As far as I understand, this is the product of an initiative from TFR, not from Netflix. So you shouldn't read into this as if Netflix had some sort of grand global news strategy. It's more for them trying something that looks interesting.
Francois Godard:Why is it an initiative from TF1? The CEO of TF1, Rodolphe Belmer, used to be on the board of Netflix for many years when he was the CEO of Eutelsat, the satellite organization. And because Rodolphe before that was COO of Canal plus the pay TV group. So based on this experience, he was invited to the board of Netflix to have the more international board and to bring in more diversity and more broader scope of experience. So knowing this and knowing the good relationship of Rodolphe with Peters, we...
Francois Godard:You have the big picture. So, Terfan is a free to air channel Under Belmer, who started three years ago, they have increased their investment on their online platform. They have sidelined the subscription part of it, And they are focused on the free to air part of it and trying to raise the profile, put more original content on it, more live content too, and trying to make it the destination platform. Then I think they understood the limitation of this. They couldn't go much further.
Francois Godard:And they reached out to Netflix with this idea and Netflix proved quite receptive. This was one year ago. It is going to launch possibly next week. They said before the end of June, the date of June 23 is circulating in Paris, but not official. It took one year because Netflix had to invest in its servers because it will be live TV.
Francois Godard:And there will be, for instance, football games on this. And so Netflix had to be in a position to deliver a seamless live experience, which they haven't done that much in Europe so far. What is the deal? All French Netflix subscribers will see TF1 Corner on their street. We still haven't seen dummies of what it will look like, but what transpires is that it will be for everybody, not only people selected by the algorithm as having an interest in the content of TFSA.
Francois Godard:And it will be interface, not down the rails on the twenty third position. So that's what we know. What will be on offer there will be all the live channels of TF1 and archives the whole content of their online platform, TFN Plus. For TFN, what's the point of this? Well, they are an incumbent free to air broadcaster.
Francois Godard:They are leaders in France, still very much leaders with over 25 of audiences for the whole group, but audiences with younger age groups are declining fast. The problem live channels, the linear channels face, as you know, is that in the old world, were flicking through channels. They were zapping. Going from one channel, trying something else was pretty easy and straightforward. Even though, even if you add 30, 40, 100 channels, anyway, you were looking at the relatively small number of channels.
Francois Godard:And so, scheduling was part of your journey every day. Whereas now, for Netflix subscribers, and Netflix is very special because it is by far the biggest streamer, and it has higher engagement, much higher engagement than rival streamers. Netflix subscribers spend one hour, two hours a day on Netflix. And what happens is that once they are on Netflix, it takes some incentive for them to get out of it. And many of them start their evening browse on Netflix.
Francois Godard:And once they've seen something, they will sample other content on Netflix before going out. So Claire Flair has identified a whole segment of the population that listens to it very likely, even though it's 25% of total audiences in France. And this segment of course is huge young, but not exclusively young. People of my age who are on Netflix, I'm 62, stick to Netflix too. So TFLAIN believe that they will have a significant increase in audiences from that.
Francois Godard:If only because these people will be reminded of live TV and maybe intrigued to jump into live TV and they will have the whole library. From Netflix's point of view, what's the point? Well, the point is simply that they will increase engagement. People want the Netflix platform. They are bored because they haven't found what they want.
Francois Godard:They may try TF1, or because they will see TF1 very well positioned on their screen, they will try it. And one more reason to not go out of Netflix. So, if you increase engagement, you diminish churn and you strengthen the big market advantage, the competitive advantage of Netflix, which is low churn, high engagement, low churn, as opposed to the others. And this is, I mean, going back to the Netflix business model, this is fundamental because Netflix is canceled anytime. I suspect that many other streamers wouldn't be canceled anytime if Netflix were not canceled anytime.
Francois Godard:Netflix can afford to be canceled anytime because they have high engagement and low churn. And well, they have this reputation and they stick to this deal with consumers that with us, you would be satisfied or you can sell anytime. So to support this, you need engagement. What are the risks? The risk for Netflix to me is a delusion of brand identity, of somehow consistency of content.
Francois Godard:It's difficult to define the consistency of content of Netflix because, well, there's a brush of content and there's diversity there. Nevertheless, there are things you expect on Netflix. There are things you expect less, and maybe some people will think that it's less exclusive. It's less, antisem in a sense. So this is the risk, I think, for Netflix.
Francois Godard:For their fund, the risk is dependency. What will this look like in five years' time? I mean, if it's a failure, well, they will have to try something else. If it's a success, well, they may need Netflix more than Netflix need them. The economics of it are pretty simple.
Francois Godard:As far as we know, there's no payment and TF1 will sell its advertising themselves directly. And Netflix wins with more engagement, TF1 wins with more viewers than more advertising, more inventory. If you allow me then to come back to one point, one risk, I don't know if the risk is for TFSAIN or for Metrix. One risk is that the TFSAIN online content has more advertising intensity than Netflix. Certainly at this point in France, Netflix has started later with advertising in Europe than in The US.
Francois Godard:And they have been a bit more careful than in The US, even though if in The US, they have been careful anyway, with lower ad loads than the networks, certainly, and then other streamers. And in Europe, they've been even more careful also because advertising loads in Europe are lower than in The US. You are in an environment where consumers expect less advertising. But even this being said, TF Online has less advertising than TF Online because of expectations of online audiences, but it's still more than Netflix. Netflix is still pretty low.
Francois Godard:So I don't know where it will end up in two, three years' time. It may converge. It should converge logically. But at this point, you may create frustrations. There you are.
Francois Godard:So it's very much... I think it's very much experimental for the two sides and certainly for Netflix. And I don't think Netflix would do anything like that before six months, certainly, until they see how it shapes up with their users.
Dan Fahy:You paint a good picture there of TF1 came into the deal in a dominant position really, because they command significant viewing share in the market, but also France is still a very high linear consumption market compared to say UK or Germany. They come in with some clout. Also, as you say, is Netflix commands the habits of many households. Know, that is the first service. It seems like there's balanced deal between them, given their respective positions.
Dan Fahy:But I wonder what your views are on how it might shape the rest of the market.
Francois Godard:Well, one, you are right. These are the two biggest, and I don't think Netflix would have done a deal like that with number two player, which is number two player in France, M6, is much smaller than number one tier fan. And so there's a quality to tier fan that the others don't have, and note that by all appearances, this is exclusive. At this point, Netflix doesn't seem to be ready to bring in others. And contrary to rumors in the market and analysis that I've read last year, it's not Netflix becoming a sort of portal with everything.
Francois Godard:It's Netflix doing a deal with one. If Netflix were to extend to others at some point, of course, what they find, the the value would would decrease. And and and then the the risk for Netflix of dilution of their content brand would increase very much. The impact, well, the impact anyway won't be massive, but think rival of theatre, M. S.
Francois Godard:Is nervous about that. MCs is up for sale. Clearly, there was a tentative merger between TEFL and MCs that ended in 2022 after the regulator asked for conditions that they didn't want to meet. Everybody is expecting a new move or some third party to buy MCs. And then you're done.
Francois Godard:MCs is the number two. Number three is very small. Not in audience time. There's public TV, but they take very little advertising. So in one way, it's one more brick in the pressure on MCs to find the model because they certainly don't have the scale to be a destination platform in ten years' time.
Francois Godard:What happened is that it may have accelerated this deal with Public TV between Public TV and Amazon. This deal was announced shortly after the Netflix deal with TFN. I can tell you about France Televiso and Amazon. It's much smaller. Okay.
Francois Godard:One, because Amazon in total engagement, total viewing time, maybe one third of Netflix. Also because discoverability is much tougher because it's under the channels tab and the algorithm may pitch some content to you, but not necessarily. So, for France Television, it's far less, and this is indeed, As far as I understand, as far as they say in Paris, Amazon would have requested distribution of France Television and France Television cannot refuse legally. It's a public broadcaster. They must say yes to all platforms under certain conditions.
Francois Godard:And Amazon Prime, it's a supermarket, as you know. Okay? They reproduce on Prime, the approach they have on the broader e commerce side. That is, there are many suppliers who are under pressure. They are competing with other suppliers.
Francois Godard:It's canceled anytime, and Amazon wants this to be everything for every taste. And so I wouldn't expect this to have much impact on viewing of Strange de la Zion. And between you and me, if it had any positive impact, this started last summer because Amazon had the capacity for live TV, because Amazon is doing live sports in many European countries, and in France, they did live football for two, three years. So Amazon had the capacity. It launched last summer.
Francois Godard:If something really positive had happened to France de la Bizion, I'm sure they would have communicated it. Broader context, France de la Bizion, like many public broadcasters in Europe, is under strong pressure. They are criticized from the right as being left leaning. There was a parliamentary commission shooting in every direction, saying that they spent too much on entertainment, saying that they are biased, etcetera. And so, Francois Lignon is pretty nervous.
Francois Godard:And after this deal, it's not surprising that they tried to do something. But, unfortunately, I don't see this as opening any significant space for them. And I would rather see some sort of European or French joint platforms as one option to be considered, but we're not there yet at all. At all.
Dan Fahy:Fascinating. And that's really interesting about the context that Amazon could have asked for the French broadcast, and I see they've done a deal with MCs too. In Germany, I think Amazon has all the national broadcasters on, and I think in Spain, there's one or two. Is it a similar regulatory or legislative position in those markets where Amazon could ask or have they just done a more commercial deal?
Francois Godard:As far as I know, it's more commercial. The mandate on public TV in France is more specific, but from the public broadcaster's point of view, again, they are under pressure. They may get a little bit more audience that wouldn't, that they would have otherwise. They can see it as experimental, but the risk of dependency over the years is high. And then they have this DNA, public broadcasters, of having to justify their use of public money and having to show that they do as much as possible to be available everywhere, even if there's no precise technical mandate.
Francois Godard:So that's why they would look at it. That's why some public broadcasters are making deals with YouTube, like the BBC, like France Television, which are two very different deals. And France Television was not under any regulatory mandate to do something on YouTube because it's only selected content. That's what you see. But you have these free to air channels, and especially publicly financed free to air channels, looking at options and close to panicking.
Dan Fahy:Yeah, fascinating, really fascinating. Taking a step back, given the investment that Netflix has done to ready their platform for the TF1 type deal, do you think that may be a template for a model they might replicate in other markets? Then how do you see from a national broadcaster's point of view, what do you see the role of Netflix, perhaps Disney, HBO Max versus Amazon versus YouTube. It seems like the broadcasters are looking to the streamers less so than one another. How would you compare those streamers as good partners for national broadcasters?
Francois Godard:Well, Netflix may certainly replicate in other European countries. You must bear in mind that this is a very European, maybe Australian, but this is not part of the conversation now, but this is a very European model. In The US, you can't do that because networks get the transmission fee from cable and satellite. So you would enter actually into bundle subscriptions. It becomes something completely different and certainly metrics will not go in that direction.
Francois Godard:In Europe, you have these free to air channels that don't ask for money to have their signal taken. But even though some of them would have a payment for their online platform, on cable and on third party platforms. So, it's a very European thing. And then the model works because of here and because TF1 wants to increase its advertising reach. It may be less interesting for public TV and maybe Netflix would be more cautious with public TV because you would have no advertising, whereas they have advertising for about 50% of their subscribers.
Francois Godard:What is funny is that a week or two after this deal was announced in France, then ITV announced its deal with Disney Plus. Mainly ITV was frustrated to not have been chosen by Netflix, but as I told you, it's Netflix that was chosen by PFA. And, of course, ITV would have been, in theory, a great partner, But now ITG is talking with Sky about the merger. I don't think it can be done at this point. They have to do the merger with Sky before considering any extension of the existing deals between Sky and Netflix.
Francois Godard:Germany also is very different because the leading broadcaster is RTL and they just merged with Sky and Germany. And so they are a two leg broadcaster, pay and advertising support. Different two, there couldn't be a deal. One partner that could be possible for Netflix would be Media for Europe, which is the new holding company of Italy's Mediaset, because they are leaders or close to number one in Germany through ProSieben that they bought last year, Italy, Mediaset, and Spain, Mediaset Espana. This is fiction, but I would imagine them going to see Netflix and saying, we bring three countries and we reproduce the TFM model in three countries.
Francois Godard:And I think they would have a strong argument for it. But again, this is something that can work in Europe if Netflix feels happy with it and it works with market leaders. The second part of your question was about the other streamers. Mhmm. So as I told you, Disney plus tried this with with ITD.
Francois Godard:They did it with RTD in Spain, public TV. They did it with Rye in Italy, public TV. But it's much less than the Netflix deal because in the Disney plus deal, there is selected Disney plus content available on the platform of the partner and vice versa. It's selected, it is pitched to the viewer through the algorithm, so you don't see it up in your face. Last time I looked at ITVX, the platform of ITV in The UK, the Disney plus content was offered on the seventeenth rail down the screen.
Francois Godard:I guess that if I had been a regular user and watching the Snippers content, maybe it would be higher up. But again, this looked to me as companies saying, oh, we we do something too. Especially a company like the TV, which is quoted on the stock market with nervous investors asking them, what what are you doing? And this surplus by all accounts in Europe, especially since Carl Holmes was appointed as COO. They are trying things.
Francois Godard:They are trying many things with sports, but they are not spending a lot on the things they are trying. So they bought rides to the women's champions league, have created an ESPN tab on the interface, but without having much rides in Europe or very small rights. So Disney plus also visibly is trying to do something. Paramount, big question mark, because we have to wait. And same thing for HBO, but I would never expect HBO Max to go in that direction.
Francois Godard:I would rather expect HBO to go back to a premium positioning if there's a separate offering that is kept by Paramount. Thing is that all these subscription streamers share some sort of interest with traditional broadcasters because they sell advertising in high quality content, expensive content, and they try to defend the model, the traditional model that people are laying down on their sofa watching TV, and they are in an ideal position to be shown spots. Whereas YouTube is very different. YouTube has its own metrics. They withdrew from Barb in The UK last year.
Francois Godard:So YouTube withdrew from the industry wide measurement system. YouTube is putting advertising in content that is very different or sometimes similar, but it's extremely fragmented. It's the programmatic model. The advertiser is not supposed to care what sort of content. Maybe you care whether the content is shown on TV or on the telephone, but you don't buy you don't buy advertising space depending on what...
Francois Godard:What's around it. So YouTube is a much more disrupted force, and YouTube is much more of a worry for European TV than Netflix or Disney plus with who are stable now. Have carved themselves a part of the market and they are looked as relatively less threatening and steady forces.
Dan Fahy:Fascinating. Is there anything that we haven't covered that was top of your mind that you think it's worth discussing in the context of these topics?
Francois Godard:I think next step will be sports in Europe. And I think one advantage to Netflix of the TF1 deal is that Netflix will have live sports in France. Of course, TF1 is a free to air channel, so they do not have a full league season, but they have international games, high profile international games. And this will be a first for metrics in France and in Europe. And they will see how their audience behave.
Francois Godard:And I think... And as I said earlier, Disney plus is very cautiously looking at sports. And some say, thanks to this deal, Netflix has bypassed the problem of rights. And I think that's the next thing on the agenda.
Dan Fahy:Francois, there's so much in that. Thank you so much for your thoughts on this topic and for your time this morning.
Francois Godard:It was a pleasure, Dan.
Dan Fahy:That was Francois Godard, And since we recorded this episode, Netflix co CEO Greg Peters was quoted in the Financial Times, speaking warmly of Netflix being open to more of these types of traditional TV partnerships with TF1 potentially acting as a model for future deals. So let's keep an eye on France. Thanks for listening. I'm Dan Fay. Original music by Lee Rosevere and SoCal.
Dan Fahy:And if you like this episode, please share with a friend or colleague.