The news that Disney’s new OTT service Disney+ is in advanced talks for exclusive carriage on France’s Canal Plus is good news for the French pay-TV broadcaster, according to a report from investment analysts at Deutsche Bank.

The fact that an extremely popular library of Disney content – not least Star Wars, Marvel and Pixar movies – would be available on an exclusive basis to Canal+, and by logic not therefore available on other French platforms (including Orange, Free, Iliad, SFR), underlines the core value of Canal Plus, suggests that bank’s report.

“Disney+ will be the preeminent streaming service next year and a leading film studio plus discount pricing vs Netflix. That that such a strong stand-alone service is seeking to distribute exclusively through Canal and, seemingly share pricing subsidies, demonstrates the value of the Canal+ platform and the land grab for installed subscriber bases amongst the streaming services initiated with Comcast’s acquisition of Sky last year after rival bidding from Disney,” said the bank.

Such a deal would bring material benefits to Canal+, adds the report, in:
(1) Material net additions (the bank estimates an uplift in subscribers by 7-20 per cent over the next 5 years) and incremental earnings from 2020.
(2) A stronger negotiating position for Canal to play hardball with Mediapro over Ligue 1 rights next year. (3) Highlights the takeout case for Canal+. The bank values Canal+ at €7.6 billion based on recent transaction multiples (MTG Nordics, Sky Europe) versus consensus €3-5 billion. The circa €3 billion – €5 billion difference is worth 10-17 per cent of market cap for Vivendi.

BUY, advises the bank.

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