First announced in May, plans to merge French commercial broadcasters M6 and TF1 have advanced, with the consolidation of the two companies expected to be finished by the end of 2022. The agreement is currently being analysed by local competition authorities, but if executed the new entity is forecast to become the sixth largest content spender in Europe’s big five markets in 2023, and will generate 15% of the total big five TV advertising market, making it the largest regional operator by TV ad revenues.

This concentration of spend and revenues becomes starker when focusing purely on the French market, as TF1 and M6 combined will account for nearly one in every four Euros spent on content nationally, and will generate almost three-quarters of the local TV advertising market. This would be the largest share of any big five advertising market generated by a single company (the next largest, Mediaset, accounts for just over 50% of Italian TV advertising).

The consolidation of these two broadcasters is a move to enable the creation of more quality French programming, and to protect the local media landscape from the increasing influence of global online video players. Streaming giants such as Amazon Prime Video and Netflix have each increased their global spend on TV content since 2016 by over 160%, and are forecast by Ampere to reach a combined total of over €21bn in spend during 2021. Meanwhile, the French content market has remained comparatively static: national spend grew by only 8% between 2016 and 2019, before contracting in 2020 as a result of the COVID-19 pandemic, with spend in 2021 currently anticipated to reach €6.2bn.

In order to remain competitive with global services’ online content libraries and high spend capabilities, national operators will increasingly be forced to seek greater scale through partnerships and local mergers such as this to expand their total ad revenues and production resources. These will ensure their business model remains stable through the production of the kind of high budget and high quality TV programming that will attract and retain viewers.