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ACTIVITY REPORT 2008 Sommaire I 2008 2 Message from the Chairman 27 Outlook and Chief Executive Officer 28 • Market trends in the French audiovisual sector 32 • Reorganisation to improve performance 5 TF1 Group 34 • Maintaining our position as television’s market leader 6 • Executive Committee 36 • Establishing the company as a 360° media platform 7 • Board of Directors 38 • Outlook for 2009 7 • Organisation chart 8 • History 39 TF1, corporate citizen 11 • Key Events 2008 40 • TF1’s commitment to sustainable development 12 • Management indicators 41 • Challenges, commitments and achievements in 2008 13 • Key financial figures 42 • Challenge 1 , television for everyone: socially responsible programs 14 • Key trading figures and broadcasting 14 • 2009 Financial Diary 43 • Challenge 2 , A major role in increasing public awareness of social and environmental issues 15 Group activities 44 • Challenge 3 , Virtuous and supportive management of the company’s 16 • TF1 Broadcasting human resources 18 • Thematic channels 46 • Challenge 4 , Action to neutralise the company’s environmental impact 20 • TF1 Advertising 47 • Stakeholders 22 • e-TF1 23 • TF1 Entreprises and Téléshopping 48 Contacts 24 • Internal production 25 • Audiovisual rights 26 • International Broadcasting Activity report 2008 2008 I Message from the President and Chief Executive Officer Message from Nonce Paolini Dear Shareholders Structural changes and a difficult In addition, TF1 was confronted with profound economic climate changes occurring in the media sector, particularly the increasingly rapid spread of DTT in 2008 and 2008 was a year of continued financial and the continued advance of the Internet. Despite all economic crisis, alongside accelerating changes in this, television viewing time has remained at a par - the media sector. ticularly high level, although a share of television support activities revenue has been taken by the The growth slowdown, the fall in household Internet and DTT. We are seeing a new competitive consumption and increasing unemployment all landscape appear, and we have already adapted to affected the situation and the strategies employed it in many ways. by advertisers. Commercial television, an early indicator whose Despite this particularly unstable context, the activity anticipates and accentuates economic channel’s audience figures have kept up well, fluctuation, was affected all over Europe by the achieving a 27.2% audience share for viewers over turndown that became a recession in the second the age of 4 in 2008 and 96 of the 100 biggest au - half of the year. diences of the year. TF1 has remained the most watched and most popular channel for French TF1 could not avoid the effects of this crisis, but viewers and audience levels are unmatched by any the impact on advertising turnover (- 4.1% in 2008) other European channel. was nevertheless limited and significantly less than on the other main commercial channels in Prime time programmes and second time Europe and the United States. programmes continue to attract a large number of viewers. This same deterioration of the economic situation also affected our subsidiaries, particularly those American television series continue to attract large that work in conjunction with the main consumer audiences, regularly achieving 9 to 10 million cycles, such as Téléshopping, TF1 Entreprises and prime-time viewers. TF1 Vidéo, with the latter also suffering from the effects of pirating and the fall in the DVD market. The media sector is undergoing significant change “in a period of economic upheaval. 2 Rapport d’activité 2008 ” Message from the President and Chief Executive Officer I 2008 TF1 news bulletins have maintained excellent All examples of a more cross-disciplinary, ratings of around 8 million viewers since the arrival cooperative and productive management style. Overall this has been a positive year. of Laurence Ferrari. Renewal gets underway We have made significant progress with every one Euro 2008 showed just how powerful the TF1 “ brand is, generating higher viewing figures and New faces have joined the channel. of our objectives. income than any of its competitors. Programmes are undergoing a transitional phase The editorial line of the channels that make up our Finally, TF1 successfully joined the battle for in a complicated competitive environment. Discovery Division (Odyssée, Histoire, Ushuaïa TV) morning audiences with 10h le Mag, a magazine Some are experiencing a quite natural fall in has been subject to review, and distribution format, presented by Julien Arnaud and Sandrine viewing figures at a time when their successors are agreements have been reached with our main Quétier, that deals with matters of daily life and still being developed. Enquêtes et Révélations, 10h partners. In particular, this involved the signing of ” has won the loyalty of an average 500,000 viewers le Mag, Au Field de la nuit, Combien ça Coûte an agreement with Canal Satellite in July 2008 every day. l’Hebdo, all are very promising new products. guaranteeing that Odyssée would be listed and that Ushuaïa and Eurosport would be broadcast 2008, a pivotal year When I arrived in 2007, one of my priorities was to in HD. find new ideas and new formats, calling on both Similarly, we have signed an agreement with In 2008, our four watchwords were: reorganisation, in-house and outside creative energies to renew Numéricâble guaranteeing the broadcasting and renewal, repositioning, returns. the various different television genres. This focus revenue from the Group’s channels on a flat rate has already begun to bear fruit and the results will basis until the end of 2011. Reorganisation of the Group is going well be even easier to see in 2009. The Group’s websites have enabled us to overtake TF1 Production has brought all our production Many positive initiatives have been developed by all other French media group websites, with our subsidiaries under a single legal umbrella, while our subsidiaries, including the HD rollout at unique visitor count growing by 50% in a market the Purchasing Department has got off to an Eurosport, the launch of the new version of that saw only 27% overall growth in 2008. TF1 excellent start. the 1000 Bornes game by TF1 Entreprises, Women is now, with Plurielles, the third biggest Negotiation of major contracts has been success - Téléshopping’s Place des Tendances and TF1 site for women and WAT was the leading legal fully turned over to single individuals working on Vidéo’s 35 DVD Blu-Ray offer. video-sharing website in December 2008. behalf of the Group. This project approach involves all stakeholders in the new programme or activity, TMC’s position as undisputable DTT market leader Nor must we forget the great success of TF1 Films thus increasing our capacity to anticipate and is becoming stronger every day – it has the highest Production’s Bienvenue chez les Ch’tis, or the achieve our aims. ratings of the sector with an average 2.1% share of creation of SPS for Eurosport, which has the national audience and an average 4.2 % DTT penetrated the games sector at European level. In 2008, all our news departments were brought audience share. In December 2008, the channel All of this bears testimony to the vitality of our under the management of a single body: TF1, broke the overall DTT audience record, with teams! LCI and lci.fr now share editorial services and 1,389,000 viewers tuning in to Allo, Maman ici platforms, with news reports being broadcast Bébé. Moreover, it is also the most dynamic on the three channels and no unnecessary channel, with a turnover that is still climbing duplication, which gives an improved overall view strongly and overall positive results and more cost-effective operation. Activity report 2008 2008 I Message from the President and Chief Executive Officer department will be showing results month by month, and we are developing a number of We must combine rigorousness entertainment projects. and creativity with a 60° approach TF1 Digital will continue as before, which, with TMC, Eurosport, LCI, TV Breizh, Histoire, Odyssée “ and Ushuaïa TV, means its offering is unique. Repositioning is gathering speed plus the launch of 16:9 and HD – both a resoun - Our advertising department has to deal with the ding success for Eurosport and Ushuaïa TV thanks challenge presented by the independent radio Our 360° strategy is working: synergies between to the skill and comm”itment of our engineers and stations – its 360° offering including television, the channel and e-TF1 have never been so strong, technicians. radio and the Internet cannot fail to make it more as shown by the considerable success of Secret attractive. Story, both on the television and the Internet. Following several years of effort, in 2008, TF1 The advertising department won the highly sought made significant progress regarding the relaxation Meanwhile, our subsidiaries need to recreate their after commercialisation of the 113 independent of certain legal rules and regulations that restric - former commercial dynamism through innovation, radio stations, demonstrating in very concrete ted its activity, enabling an inter-professional agree - without sacrificing operating margins, in a race for fashion the Group’s determination to become a ment to be reached, after a year of negotiations, revenue in an unfavourable economic climate. global media. LCI has launched its radio online… which turns the producer-broadcaster relationship Three example of the Group’s dynamism. into a partnership, thus giving us more room to Finally, we will not let up in our efforts to sustain manoeuvre. good management practices without sacrificing Returns: a daily concern quality of content. As long as we can combine The new regulations regarding advertising will also rigorousness and creativity, we will be able to Everyone has taken up the challenge of optimisa - bring in extra revenue once the crisis is over. control TF1 grid costs and still maintain high tion and the considerable efforts made with respect audience levels.