Orange lays the foundations for a content push

Orange has unleashed its assault on content, Orange Content, which promises to invest €100 million over five years to support its 100% cinema and series offer.

The new business unit will bring together its current content focuses, which consists of Orange Studio, OCS and OPTV (Orange Prestations TV), and will be responsible for everything from strategic intelligence and acquisition of rights, through to the production and publishing of content, as well as the creation of new services. The new venture forms another arm of Orange’s Essential 2020 strategy, which aims to go beyond the normal realms of telco services.

“Orange Content aims to guarantee the richness of our offer in France and abroad and give more visibility and consistency to our offers in the field of content,” said CEO Stéphane Richard, announcing the new unit.

The move is another which indicates the strength of Orange moving forwards. While some telcos (those in the UK for instance) are still trying to figure out how to pay for fibre, Orange has done all the nitty gritty work already, allowing to focus on the ‘nice to haves’ which will take a business to the next level. The last couple of years saw Orange pump cash into fibre investments, and while it meant slightly lower profit margins, it’s in a good place now.

The multi-play business model is one in which every telco sees the holy grail, but in some cases, CAPEX is being spread very thin. Take those in the UK, upgrades are still being made to the network, both fixed and wireless, while the team are also trying to buy their way into the content game. Orange has a huge fibre network, spreading across France and Spain primarily, and can now focus entirely on other bets.

David Kessler, Director, and Serge Laroye, Deputy Director, will lead the new business unit, reporting directly into the CEO. Over the next couple of months, a new CANAL+ ESSENTIEL offer will be developed for its fibre customers, it’ll beef up the current partnership with CANAL+, expand its partnership with UGC Images, as well as investigate where original content series can be developed.

The Essential 2020 strategy is one which we are likely to hear a bit more about over the foreseeable future, as it is basically Orange’s diversification platform. Cinema content is a big one for the moment, but the Orange Bank is another area which is looking promising (even though there has been a slight delay) and energy services in other markets could be a future value add for customers.

From what we can see, it’s a relatively simple strategy; find out what people want, and attempt to tie them into a single bill. Simple in theory, but very difficult in practise. Many have tried diversification, but like Google, Orange seems to have nailed down the core business (i.e. it’s connectivity efforts through previous fibre investments), which offers a bit more freedom and security to explore new areas.

So the content bet is a tricky one, underinvestment will lead to an absolute and very public disaster, but the foundation is there for Orange to make a crack at it.