Canal Plus: The Latest French Sensation

Rene Bonnell, the director of Canal Plus' film operations, still remembers being snubbed on his first trip to America in 1984. Those were the early days of French pay-TV and getting good movies was crucial to Bonnell's operation. But Universal, Paramount, MGM, and others weren't eager to do business with a puny pay-TV venture that was likely to go bust. "They told me to come back when we had our first million subscribers," recalls Bonnell.

Fast forward to 1991. With 3 million subscribers in France and joint ventures in Belgium, Germany, and Spain, Canal Plus is the most profitable and fastest-growing pay channel in the world. Beams Bonnell, 46, who landed in the movie business by writing a thesis at the Sorbonne on the economics of the film industry: "We're now awash in offers from American producers."

Success came quickly to Canal Plus. From the moment it began broadcasting in November, 1984, its quirky mix of big-hit American comedies, French drama, and late-night erotic films intrigued French viewers weary of the lackluster programming of government-owned TV. The station now shows 365 films every year, with 140 of them coming from Hollywood and costing $100 million.

ITS OWN LOT. To help assure a supply of these movies, the company invested $20 million in a new film production and distribution agreement with Warner Bros. Inc. and Arnon Milchan's Regency Enterprises. It also launched Studio Canal Plus, its own film production company. Studio Canal Plus owns 5% of Carolco Pictures Inc., which is currently making Arnold Schwarzenegger's Terminator II. The studio also is co-producing The Vagrant with Mel Brooks and Homicide by David Mamet, selected to compete at the Cannes Film Festival in early May.

Canal Plus' latest European venture is in Germany, where it has taken a 37.5% stake in Premiere, a new pay-TV station. Its partners are Bertelsmann, the world's second-largest communications company, and Kirch-Beta Taurus, a film and TV group.

If all goes well, Canal Plus believes it will have 6 million subscribers in Europe by 1994. That means that the pressure to supply films and good TV programming will continue to grow. Bonnell wants Canal Plus to own a piece of one out of every three blockbuster movies produced in the world every year. To do that, Canal Plus, like Time Warner Inc., is building grand alliances in the far reaches of the world of entertainment.

      1990 REVENUES
       $1.05 BILLION
       $154 MILLION
    Before it's here, it's on the Bloomberg Terminal.