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Kirch
sells Mediaset share
News
Corp wins China distribution
Comcast
wins AT&T Broadband
Messier a deal-holic
BSkyB
to sell Kirch stake?
Netgem
cuts costs
UPC/Primacom abandon merger
Australia reviews ownership
restrictions
Text
via Canal Satellite
Irdeto wins
China MMDS order
Net access via TV
Kirch
sells Mediaset share
Germany's Kirch Group is continuing its re-focusing strategy on its German
core market and Leo Kirch has now sold back the Group's 1.28 per cent
share in Silvio Berlusconi's Italian media entrprise Mediaset for €120
million. The sale, made through JP Morgan is
part of the German group's attempts to remedy its liquidity problems.
Kirch recently offered to sell its 25 per cent stake in Spanish broadcaster
Telecinco, controlled by Italian Mediaset. Mediaset's President Fedele
Confalonieri is planning to buy another nine per cent in Telecinco, almost
reaching an absolute majority. But the move could be very expensive, as
Kirch wants to make more than 1000 billion lire (€518 million) from
its share, would mean a disbursement of about 350 billion lire from Mediaset.
These moves are part of preparations for the intended merger with Kirch's
own commercial TV holding in Germany, ProSiebenSat.1 Media AG scheduled
to complete by mid-2002. Kirch and ProSieben have appointed two independent
auditors to undertake the valuation process: Kirch has mandated Deloitte
& Touche; ProSieben has mandated Andersen.The auditors will jointly report
on the value of both companies and the exchange ratio.
Neither of the auditors have previously acted for either company before.
The merger report will be available with the invitations to a general
shareholders' meeting to be held in March/April 2002.
The Kirch Group began to falter after the acquisition of TV rights to
Formula One, and now it has debts of about E6 billion: €2.2 billion
with Bavarian Bank, €750 million with JP Morgan, €650 million
with Deutsche Bank and E450 million with Dresdner Bank and Hypovereinsbank.
News Corp wins China distribution
By Owen Hughes
News Corp's Star has been given the right by the Chinese government to
distribute a new Mandarin-language entertainment channel in the south
of the country. Under the agreement signed between Star, state broadcaster
China Central TV (CCTV), China International Television Corporation (ITVC)
and
Guangdong Cable TV Networks Co Ltd (GCTV) will be carried on cable TV
systems in Guangdong province and CCTV 9, an English-language news and
current affairs service, will be carried on US cable systems through Fox
Cable Networks.
In October Phoenix Channel, which is part-owned by News Corp, and the
AOL Time Warner-owned China Entertainment TV were also granted carriage
in Guangdong. The significance of this new development is that these two
channels had been carried unofficially since 1997 in southern China, and
the landing rights were official recognition of their longstanding presence.
Three of the main signatories to the agreement outlined its significance
in a statement issued by Star from its Hong Kong base. James Murdoch,
Star's Chairman and Chief Executive, said the deal was a "landmark agreement"
and "represents a milestone for Star's development in China. It comes
at a most opportune time with China's accession to the WTO, which provides
a unique growth opportunity for the whole broadcasting industry."
Minister Ding Guan Gen, Minister with the Publicity Department of the
Chinese Communist Party's Central Committee, and a member of China's main
decision making body, the Politburo, in charge of ideology, said the agreement
was a "good start for our cooperation, which will be further developed
in steps."
Minister Xu Guangchun, director of China's State Administration of Radio,
Film and Television (SARFT) said "China attaches great importance to this
agreement. The agreement will set a new level of cooperation between China
and News Corporation."
Comcast wins AT&T Broadband
Comcast Corporation announced Wednesday night (18/12/01) that it is merging with AT&T Broadband in a deal valued at about $72 billion including debt, a valuation of $4,500 per cable subscriber compared with the $4,100 per subscriber originally paid for the systems.
The new company, which will be called AT&T Comcast Corp, with Comcast's President Brian Roberts as the combined company's Chief Executive. Michael Armstrong, AT&T's Chairman and Chief Executive, will serve as Chairman of the new company and he will retire in the spring of 2005 - not leaving AT&T in 2003 as planned.
Five months ago Comcast's unsolicited $41 billion bid was spurned by AT&T, but nonetheless spurred a bidding war as AT&T shareholders were alerted to the possible benefits of this alternative route to the planned flotation of the unit.
AT&T will now spin off its cable division and simultaneously merge it with Philadelphia-based Comcast making AT&T Comcast Corp the biggest US TV company. It will have approximately 22 million subscribers - a third of all US cable homes - and a presence in 41 states as well as 17 of the 20 largest metropolitan areas in the country. The new company will also have five million digital video customers, 2.2 million high-speed data customers and 1 million cable telephony customers.
To thwart AOL Time Warner's bid, software giant Microsoft backed the takeover offers by Cox and Comcast and made a separate offer to invest up to $5 billion in AT&T Broadband if AT&T kept it independent. Now Microsoft plans to convert $5 billion of AT&T subsidiary trust convertible preferred securities into 115 million shares in AT&T Comcast. The new company will also assume $20 billion of AT&T's debt. AT&T's shareholders get 0.34 of a Comcast share for each share they hold, valued at $13.07.
AT&T shareholders will hold 56 per cent of shares in AT&T Comcast Corp and 66 per cent of the voting interest; the Roberts family keep the remaining third.
The merger of AT&T Broadband and Comcast is subject to regulatory review, approval by both companies' shareholders and other conditions.
Messier a deal-holic
Jean-Marie Messier, French media group Vivendi Universal's Chief Executive said he has reached an agreement with Rupert Murdoch to buy his loss-making Italian pay-television platform Stream.
Murdoch's News Corporation, which owns Telepiu, is to buy Stream, its Italian pay-TV rival. The company's valuation is based on $600 for each of its at 650,000 paying subscribers, amounting around $390 million.
This has been a very busy week for Messier. Last Friday he bought a 10 per cent stake in pay-television group EchoStar for $1.5 billion, then on Monday he paid $10.8 billion for the acquisition of the entertainment businesses of Barry Diller's USA Networks and the agreement with Murdoch makes this the third major deal in the last seven days.
Messier said that after this last arrangement he will definitely be able to go away on holiday on Friday.
"I am a workaholic, not a deal-aholic," Messier said to the FT. "When I see a weakness, I move fast to address it."
The Italian antitrust authority opposes the merger saying that if two of the world's largest media companies got together they could shut out potential new entrants. Vivendi hopes to overcome Italian regulatory opposition by arguing that Murdoch could always re-enter the market as a competitor because he has been now completely bought out.
Ending competition on sports and movie rights will mean the combined entity will break even before 2003, Messier said. Telepiu on its own did not expect to break even before the end of 2004. Stream lost around €400million ($361 million) last year and Telepiu around €220million.
BSkyB to sell Kirch stake?
The German media giant Kirch Gruppe has said it could run out of money if it has to buy out Rupert Murdoch's 22 per cent stake in Premiere, the German group's pay TV business.
Murdoch has a put option worth DM 3.4 billion ($1.6 billion) and it can force Kirch to pay it. The German media company said that it is prepared to sell a substantial stake in its pay-TV business to honour the commitment with British Sky Broadcasting, Murdoch's UK satellite group. But if BSkyB decides in October or November next year that it wants payment, the already in-debt media group will be in big trouble.
Although Kirch wants to retain Murdoch as a long-term investor it will look for other candidates if an agreement is not reached.
"We are not going to sit and wait to get a letter with a DM3 billion invoice," said Dieter Hahn, Kirch's executive in charge. "We are pursuing potential alternatives, which could be other partnerships or a restructuring of the business."
Hahn suggested that Kirch would aim to resolve the BSkyB option within the next three to four months. All options would be negotiable with a strategic investor looking to buy into the biggest pay-TV platform in Europe's largest media market, he said.
Kirch, which has DM11 to 12 billion debts and more than DM5 billion in contingent liabilities, will also seek to improve its balance sheet. It aims to reduce the number of short-term loans and dispose of non-core assets, mainly minority holdings in non-German businesses. It said it had sold its 1.3 per cent stake in Mediaset, the broadcasting group, generating about €120 million, reported the FT.
Separately, Kirch executives confirmed on Wednesday that Paramount Pictures, a unit of Viacom, had filed a sealed lawsuit against Kirch in New York. According an FT Deutschland report, Kirch is alleged to have failed to meet some of its payment obligations in a long-term output deal with Paramount.
Netgem cuts costs
Netgem, the French supplier of HTML based interactive TV boxes, is to shed around 20 staff. The aim is to reduce costs during 2002 by some €4.5 million. Sales have been flagging considerably, at around €13 million for the first nine months of this year, compared to €81 million for the same period last year. Netgem has a total of 120 staff. Its clients include ITV Digital in the UK, to which it supplies the Internet browser boxes.
UPC/Primacom abandon merger
Pan-European cableco UPC and the German cable operator PrimaCom have finally abandoned their plans to merge their German operations.
UPC in Germany controls the cable operator EWT-TSS which owns about 1.2 million direct German cable homes and holds a stake of about 25 per cent in PrimaCom - which in turn owns about 1.8 million homes - of which about 320,000 are located in the Netherlands.
Just prior to the final meeting some PrimaCom executives explained why such a merger would have made sense after all. Most of the regions were TSS and PrimaCom owned cable clusters located directly beside each other and, compared to UPC, its German holding is financially much healthier than the parent company. Also PrimaCom has some €862 million debt. But the company says it has enough liquidity in hand that it this would not cause any severe problems for the company's strategy.
However, some observers suspect that the failure of the merger is due to the intended purchase of over 10 million cable homes from Deutsche Telekom by Liberty Media. At present German antitrust authorities are taking a close look at Liberty's shareholdings in Germany including Malone's major interest in UPC via its parent, United Globalcom.
Australia reviews ownership restrictions
The Australian government has announced plans to eliminate restrictions on foreign ownership of media organisations, as well as cross media restrictions and a review of the datacasting regime.
Communications Minister Richard Alston, in his first major announcement since his Liberal Party was re-elected in November's federal poll, said that the ownership restrictions would be debated in Cabinet and put before parliament after it resumes sitting in February.
Alston also called for submissions on datacasting by January 25 as he seeks to review the embarrassing cancellation of a proposed spectrum auction last May because there was only a single nationwide bidder.
The auction flopped because prospective players said restrictions on what could be shown made it uneconomic. The government is committed to waiting until 2007 before it introduces any new entrants to the free to air broadcasting community and the current players had argued that the datacasting curbs were needed to prevent the creation of de facto broadcasters.
Among the issues to be discussed are whether regulatory body the Australian Broadcasting Authority can determine if a service is datacast or broadcast and allowing subscription broadcasting and narrowcasting. Alston said that the original datacasting regime allowed mostly information and education services, but that these were unlikely to drive the commercial rollout of digital TV.
The opposition Labor Party and would-be datacasters warned that the government had to walk a tightrope between making datacasting attractive commercially and sticking to its commitment not to allow newcomers before 2007.
Text via Canal Satellite
Canal Satellite in France has deployed text messaging to cell phones from the TV set top box, via its Vizzavi portal. The price of the service is €0.23 per message.
However, it is not yet possible to receive text messages on the TV. The remote control is used to key in the message, which is then sent using the modem in the set top box.
Irdeto
wins China MMDS order
Content protection and management specialist Irdeto Access, a subsidiary
of MIH Limited, has signed an agreement with Hubei MMDS in China for the
delivery of its Irdeto M-Crypt compact content protection system.
The deal was won via Irdeto's strategic partner Sichuan NTC. Hubei MMDS
is under the direct supervision of the Hubei Provincial Administration
of Radio, Film & Television Bureau, providing free-to-air services to
analogue subscribers throughout the Hubei province. With the implementation
of the Irdeto M-Crypt system Hubei MMDS will launch its digital Pay TV
service next to its free-to-air analogue services.
With the launch of the Hubei MMDS pay-TV operation scheduled by the end
of this year, Irdeto M-Crypt will initially secure 30 digital programmes
and stock related information broadcast via five channels to an initial
20,000 subscribers based in Wuhan, the capital city of the province of
Hubei. The pay-TV operation will be expanded to cover the whole of the
province. The customer base is expected to grow to 50,000 subscribers
by the end of 2002. This number is estimated to increase by 10 per cent
every year.
"The province of Hubei with a population of 60 million is of great strategic
value to us and it will be an excellent base to showcase pay media services
in China facilitated by our technology," said Thierry Raymaekers, General
Manager of Irdeto Access North Asia.
"Now that our conditional access technology is localised and developed
to better meet Chinese market needs, we are sure that this deal will increase
the already good reputation of our robust technology, high level of local
service and valuable network of partnerships."
" Irdeto Access already has an impressive portfolio of customers in China,
and we believe that our knowledge of the market bundled with Irdeto Access'
global experience locally applied will lead to the successful completion
of this challenging project," commented Yang Wenan, Vice President of
Hubei MMDS.
Net access via TV
Delta V, a new high-speed service launched by US-based company Clear Channel Wireless, will be available for downstream use, taking advantage of a latent portion of digital television signals to speed delivery of Internet data.
The company, a division Clear Channel Worldwide, said that this service is the first step of a US-wide rollout and will allow home and small business Internet users who cannot get high-speed access to download files from the Internet at 256 Kbps, up to six times the speed of a normal dial-up connection.
The service is provided through digital television signals and translated in the computer through a special PCI card, antenna and proprietary software.
Delta V will be especially useful for those living and working in remote locations who can't get standard broadband connections. Users won't have to change their current e-mail address and ISP, while adding high-speed download capability to their account.
Clear Channel Wireless Chief Operating Officer, Leon Brown said, "As entrepreneurs, we saw the holes in the high-speed Internet service coverage map," and added, "As broadcasters, we saw the opportunity to provide a service to the unserved users in those areas while delivering free, high definition television to the viewing public."
Clear Channel said it plans to offer Delta V in television markets throughout the United States over the coming year. At least for now, Clear Channel is offering free hardware, software and installation. The service itself is being offered at $39.95 a month, and the installation package eventually will be about $250 the company said.
Lauder claims Czech's $690m
NTL revised plan in January
Italian Fashion channel launched
USA interactive Diller launches
Bulgaria's naked truth
Digital TV for 50% of UK
Polsat must drop TVP
$2.8 bn for fibre optic couplers
FT drops streaming
AT&T decision awaited
Lauder claims Czech's $690m
US cosmetics heir Ronald Lauder, whose Central European Media Enterprises saw its Czech TV station Nova taken over by its Czech partner and director of the station Vladimir Zelezny, is claiming $690 million compensation from the Czech government for failing to protect the company's investment.
About $500 million had been invested in the private TV station up to 1999 when Lauder fired Zelezny, who managed to take control the station. An international arbitration court ordered Zelezny to repay Lauder $23 million plus $4 million in interest - which Zelezny failed to pay. In September, a Stockholm-based arbitration panel ruled that the Czech government had failed to protect the business activities of Lauder's company.
CME says that the $690 million now claimed from the Czech government - some 3.3 per cent of the government's projected spending for 2002 - is the value of its investment plus interest, a figure which it says will increase by $217,296 per day until it receives payment.
Last week, the Czech government appealed the Stockholm court's ruling arguing that a Czech representative on the three-member arbitration panel did not get a fair chance to contribute to the proceedings and that the ruling ignored Czech law.
The whole issue is a vital one not just for the media, but to reassure foreign investors that investments in the country will be safeguarded by the rule of law.
NTL revised plan in January
Heavily indebted UK cableco NTL has sought to reassure investors - hit
by plumeting share prices - by reaffirming fourth-quarter earnings - but
the lack of specific 2002 capital spending cuts has reportedly disappointed
market analysts. NTL confirmed that it expects to meet its 2001 target
of £485 million in earnings before interest, taxation, depreciation and
amortisation, a figure which underpins many of NTL's covenants on its
£4.1 billion bank debt.
The company says it can meet all current financial obligations, and that
its revised business plan - due to be unveiled in January - includes spending
cuts and will increase cash flow. At current expenditure and income rates
the company is due to run out of cash in 2003, though an FT report suggested
that some core divisions could run out of cash in six months.
The January plan entails a debt-for-equity swap involving most or all
of NTL's current $17 billion (£11.8 billion) debt.
The company is in a catch 22 situation in that any reduced capital spending
will slow the number of new customers connected and the pace of new service
uptake, such as digital television and fast Internet access, thereby reducing
revenue forecasts. Increased costs may also result from redundancies cancelling
NTL's aim of cost-cutting.
A first cost cutting measure is that Premium TV, NTL's wholly-owned sports
programming subsidiary, reportedly shelved the March launch of a digital
sports channel based on BBC archive sports material.
Up to 50 jobs are believed to be under threat as a result, although Premium
TV is expected to continue providing websites for soccer clubs. A total
of 4,000 job losses are already planned by the end of 2002.
To date NTL has been unable to find a buyer for either its broadcast mast
network or Cablecom, its Swiss cable network, but reports it is continuing
to hold talks on a sale with third parties.
Italian Fashion channel launched
A new Italian digital channel has been launched called TV Moda, entirely dedicated to fashion and glamour, joining Fashion TV in the small circle of channels focused on this genre.
TV Moda transmits in the clear on frequencies 12111 GHzV and can be seen by any receiver which conforms to the DVB standard. The channel's programming comprises fashion shows, interviews with leading designers and latest news from the most important catwalks in the world including Milan, Paris, and New York.
USA interactive Diller launches
Following the $10.3 billion acquisition of USA Networks by Vivendi Universal, Barry Diller will be renaming his USA Networks rump as USA Interactive. It will concentrate on Internet commerce, including it current assets such as HSN.com, Ticketmaster.com, Match.com and Hotel Reservations Network operations.
USA Interactive will operate autonomously from Vivendi and will be headed by USA Networks CEO Barry Diller.
Bulgaria's naked truth
Former UK cable company Live! TV had a stripping newsreader, then came NakedNews.com, a 2-year-old, Toronto-based Web site which got onto Canadian TV, to be followed by in the US, and now the cheeky approach to news has now returned to Europe, at Bulgaria's M-SAT TV, in 'The Naked Truth' where it says it took its inspiration from similar venture in Russia.
Unlike the north American version, which had readers of both sexes, in Bulgaria all five presenters are anchorwomen - aged 19 to 23 - who strip whilst reading the news. The Russian program primarily showcased young strippers with little interest in the news and it went off the air several months ago, as viewer interest flagged. In contrast, say the producers of the Bulgarian version, their broadcast is not only meant to bare all.
"Our approach to the news is absolutely serious," producer Stilian Ivanov is reported as saying. "I don't think that what the Russians did is similar to our show. "It's the first time in Bulgaria that a cable program is outdistancing mighty state TV." Subscriptions to M-SAT cable have doubled.
From January 1 the program will be expanded from 10 to 15 minutes - and newsreaders will strip completely rather than remaining in their underwear as now, with men joining the women from Valentine's Day.
Digital TV for 50% of UK
A new market research report from Jupiter Media Metrix (formed by the merger of Jupiter and Media Metrix) says that half of UK homes will have digital TV by the end of next year compared with only a quarter across Europe as a whole.
As a result, by the end of 2002 the UK will have the world's highest penetration of digital television says the report.
"The rate of growth isn't uniform across Europe," said Mark Mulligan, an analyst with Jupiter Media Metrix.
Southern Europe is seeing slower digital television uptake, with Spain and Italy expecting less than 20 per cent of homes by the end of 2002.
Belgium and Sweden will continue to lead the broadband Internet market at 12 per cent and 18 per cent, respectively. While Europe wide broadband won't even 15 per cent of homes until 2006.
Polsat must drop TVP
Polish private independent broadcaster Polsat must cease airing public television channels TVP 1, TVP 2, TV Polonia and WOT on its digital platform following a ruling by the Supreme Administrative Court (NSA).
The NSA upheld an earlier ruling by the Chairman of the National Radio and Television Council (KRRiTV) following a complaint lodged by TVP. Polsat was given a permit to broadcast these channels in 1998 following amendment of a ten-year license first granted in 1993. No agreement was reached with Polsat and TVP on the terms of the broadcast agreement and in March 2000 the latter filed its complaint.
Polsat, in turn, maintains that the broadcast agreement is valid until 2003 and that any dispute between the parties is civil and not subject to administrative sanctions. The NSA resolved that the KRRiTV had the right to order a cessation of broadcasting and that the concession to air TVP programs was contingent upon a follow-up agreement on terms. To date Polsat has not reacted to this ruling.
$2.8 bn for fibre optic couplers
A market study on the global consumption of fibre optic couplers by ElectroniCast Corp predicts that demand will increase from $602 million in 2001 to $1.18 billion in 2005 and then to $2.8 billion by 2010. The rise will be supported by rising quantity growth, partially offset by a continuing decline of average prices.
"Global coupler consumption will be driven by the accelerating demand for high capacity transport systems such as optical fibre amplifiers, DWDM, and OADM," ElectroniCast President Stephen Montgomery was reported as saying in a Communications Today report.
Applications range from long haul submarine networks, subscriber loop networks, cable TV networks, to test instruments and sensors. The main use of couplers is for splitting or combining signals and is expected to remain so in the foreseeable future.
Predictably, North America leads global coupler consumption with 38 per cent or $229.75 million in 2001. North American consumption is predicted to expand in value to $1.06 billion by 2010.
Europe comes second with 27 per cent or $164.97 million in 2001, increasing to $793 million by 2010. Germany, the UK, France and Italy are the main areas of deployment in Europe.
WDM couplers had a 50.5 per cent market share in 2001 compared to star/tree couplers at 29.0 per cent. Star/tree couplers are forecast to see a strong growth rate of 24.1 per cent annually (2000-2005) and average annual growth rate of 28.8 per cent (2005-2010), to reach a consumption value of $1.17 billion, representing a 41.3 per cent market share.
FT drops streaming
London's Financial Times newspaper has dropped plans to deliver streaming media - radio and television on the internet.
The plan had been to syndicate audio and video FT content across the web, provide video for the FT.com website and audio reports for the FTMobile newsflash service. Some €242,370 has already been spent on a TV studio.
FTMobile will not be affected; this joint venture with Carphone Warehouse sells FT branded handsets and offers services including SMS alerts and audio reports.
AT&T decision awaited
*now made - see update
AT&T Corp was evaluating bids for its AT&T Broadband cable TV unit at
a board meeting Wednesday 19/12/01 (yesterday) while simultaneously considering
whether it really wants to sell the business or keep it.
Comcast Corp, Cox Communications Inc, and, AOL Time Warner Inc are all
bidding and a decision could be made as early as close of play Wednesday
US time. Each of the cablecos, who would merge their operations with those
of AT&T Broadband, are said to be refining their respective bids to meet
a complex series of financial, operational and tax requirements from AT&T.
The fact that industry analysts and commentators are not tipping any one
likely victor suggests that AT&T itself does not have a pre-eminent favoured
bidder. The lack of expressed preference has led many to believe that
the company will eventually reject all the offers and instead keep control
of the broadband operation.
When AT&T said in a statement last week, "there could be no guarantee"
that it would enter into a transaction for AT&T Broadband, investors sent
the stock down more than four per cent - and the result is that many shareholders
now favour a sale.
If AT&T did choose to keep the business independent, it could still sell
its 25 per cent stake in Time Warner Entertainment, AOL's cable unit,
which would raise cash to help reduce debt. It could also try to elicit
a separate investment from Microsoft, which has backed both the Comcast
and Cox bids to thwart AOL - which appears to have made the best bid for
shareholders. AOL offered to spin off its own cable business, and merge
it with AT&T Broadband, giving AOL 40 per cent in the new cable company.
Alternatively, a revitalised AT&T Broadband - still under AT&T control
- could potentially drive profit margins to the industry average, with
the result that it would be valued more in a year or two than it is today.
AT&T's stock is now considered to be low enough that the failure to sell
its broadband division would not affect the stock price.
*Latest news is that AT&T is to sell its cable TV unit to Comcast, abandoning plans to spin off AT&T Broadband as an independent company. Comcast Chief Executive Brian Roberts is to head the new company which will control a third of US cable homes. Further details next update.
Vivendi/Stream
deal close
Mediaset to buy Telecinco share
Thomson and Alcatel in ADSL
BBC bid for Six Nations
Finnish DTT slowdown
Digtal satellite
in Korea
NTL rescue terms
warning
Fox launches interactive
games
Vivendi/Stream
deal close
Vivendi Universal's
Chairman, Jean Marie Messier announced December 18 in a conference call
in Paris, that the French group is close to an agreement with News Corporation
to buy the Murdoch-owned News Corp share in Italian pay-TV platform Steam.
The two pay-TV platforms jointly have 2.5
million subscribers (800,000 of which are Stream's). Telepiu reported
losses of €119 million in the first half of 2000, after a net loss
of €186 million in 1999. Stream, owned by News Corp and Telecom Italia,
lost more than €200 million in 1999 and 2000.
Stream's valuation is put at 900 billion lire (€470 million) hence
under the terms being discussed, Vivendi would pay less than $600 per
Stream subscriber.
Following two months of investigation the Italian Antitrust Authority
previously gave a definitive red light to the merger between Stream and
the second Italian platform Telepiu, opposing two of the world's biggest
media companies and their movie studios joining forces in Italy's pay-TV
market. Murdoch's departure could resolve that problem.
Mediaset to buy Telecinco share
Mediaset, the Italian private broadcaster owned by President Berlusconi
showed its interest in buying Kirch Group's share in Spanish broadcaster
Telecinco. The German group, offered to sell its share on Monday (Dececember
17) in Munich.
Mediaset already owned 40 per cent of Telecinco, valued at €511 million,
and it is has a right of pre-emption: according to Spanish law, the share
cannot exceed 49 per cent.
Thomson and Alcatel in ADSL trial
Yesterday (Tuesday 18/12/01) in Paris Thomson and Alcatel demonstrated end to end ADSL technology to provide triple services of telephony, television and Internet for local operators.
An all-purpose ADSL box in the home will provide simultaneous access of up to 4Mbps bandwidth - which Thomson says is enough for up to four television channels as well as telephony and high speed Internet. The content, comprising TV channels, true video on demand (as opposed to NVOD), would be linked to the head end, generally by satellite.
The ADSL box can be linked directly to the TV, to the PC for Internet access, and to a phone terminal, or via annex 'satellite boxes' to other TVs, enabling different channels to be viewed on different sets in the house. Later versions of the box will use wireless technology to link to the 'satellite' boxes.
The ADSL box may contain an optional hard disc to provide additional PVR functionality. Since all of the content at the head-end is in digital form, it is also possible to implement a 'virtual VCR' at the vortal (video portal), providing stop, forward and replay functions to archives of broadcast programmes stored at the head end. Other applications include t-commerce, on line gaming and web TV services.
The technology can be seen essentially as a means of deploying digital cable services without the need to lay cable, using the existing telephone network copper wires, greatly reducing costs as well as adding a range of new interactive services. Serge Tchuruk, Chairman and CEO of Alcatel, said that an operator could get into business with as little as €50 million (in addition to the costs of the content), plus a linear amount proportional to the number of viewers, about €650 per subscriber, which is a fraction of the costs of coaxial cable and can be deployed almost immediately, without needing to dig up the road.
Thomson said that it is in discussions with a number of companies, including Vivendi-Universal and satellite platform TPS. The set top boxes will be available around the middle of next year for €250 to 350.
BBC bid for Six Nations
British public broadcaster, the BBC in an attempt to secure exclusive broadcast rights to the next 'Six Nations' rugby tournament said that the event would be devalued if there was more than one broadcaster involved.
BSkyB currently has the rights to England's matches at Twickenham but that £87.5 million, five-year contract runs out this season. The new deal will be for the new year. The BBC pays £17 million per year for its three-year deal to show all other matches in the home countries. That, too, comes to an end this season. Club rugby in England is shared betweeen BSkyB and the BBC as a result of a four-year deal signed in August.
Last week the Six Nations committee voted to condense the 10-week tournament into a seven-week period, with effect from next season. The new contract will bring together all six countries (England, Scotland, Wales, N Ireland, France, Italy) for the first time, with monies to be pooled.
BSkyB has good production capabilities but cannot compete with the reach of terrestrial television. The Lions series in Australia drew some 800,000 on BSkyB while 7.9 million tuned in to watch Wales-England on the BBC last season.
Peter Salmon BBC's Head of Sport said, "In terms of cost per viewer, rugby is the most expensive contract in our portfolio." Salmon is expecting a decision to be made on the new contract by the end of March.
Finnish DTT slowdown
Finland, like its neighbour Sweden is experiencing major problems with its introduction of DTT (Digital Terrestrial Television).
Not much has happened since the massive marketing of a national launch on August 27 2001, mainly due to a severe shortage of set top boxes. Finland decided to go for an MHP solution, consequently most manufacturers were unable to supply boxes with the relevant system installed.
Further problems are now becoming aparent. Several of the companies awarded DTT licences now admit that they are not able to meet the official requirements. Three out of eight licences handed to commercial operators will soon be returned to the Ministry of Traffic and Communications (MTC).
Even before the official launch in August, Sanoma WSOY - one of Finland's most influential media groups - officially announced that the company no longer intended to launch the educational channel for which it had been given a licence. Now two other services in the Sanoma WSOY multiplex, the movie channel Swelcom and a channel supposed to be operated by Canal+, have announced their decision to cease 'trial broadcasts' - ie mainly movie trailers. Therefore the licences will revert to the MTC.
As new legislation is about to be introduced, the MTC is not expected to put the vacated licences out for tender until next summer.
But not everyone has lost hope for the Finnish DTT project. VISA, the international credit card company, supports the Finnish decision to go for MHP, and from this coming February it will put out its new 3D Secure applications for public trial over the Finish DTT network.
Also the new Nordic bank giant, Nordea (originally formed by Finnish Merita and Swedish Nordbanken) has decided to enter the world of DTT. The bank will introduce a number of new banking services adapted for DTT use during the third quarter of next year (when MHP services are expected to be more prevalent). Nordea currently has approximately 2.6 million Internet clients in the four Nordic countries.
Digtal satellite in Korea
South Korea's first digital satellite broadcasting platform is expected to begin operating next month after a two-month trial period.
The system, Skylife Broadcasting, is the result of an alliance of the state funded Korea Broadcasting System, Munhwa Broadcasting Corp, Seoul Broadcasting System and Education Broadcasting System. It will offer a free, one-month trial from February 2002 with the full commercial rollout and launch in March.
According to a report from the official news agency, Yonhap, Skylife had been accepting customers since December 3, and 10,000 people have signed up for packages that cost between $6.20 and $15.70 a month.
Skylife is expected to offer pay per view, high definition, and interactivity, although its multimedia capabilities will be rolled out in response to public demand, rather than being offered from the outset. The company says that through digitisation it will be able to offer 74 video, 10 PPV and 60 audio channels and that the number of channels will reach 200 by 2005.
What is not clear is how Korea will be able to provide enough content to fill this capacity, given the problems that the cable sector has had in this area.
Estimates by the Ministry of Information and Communication, in addition to those by the Telecommunications Research (ETRI), project that the digital broadcasting industry would create $23.6 billion worth of business for equipment manufacturers and retailers, advertisers and content providers.
NTL rescue terms warning
UK cable company NTL saw its New York quoted shares fall by 13 per cent on Monday (17/12/01) from 71 cents to 62 cents, leaving it valued at about $160 million.
NTL needs to out line the terms of its planned restructuring for its $17 billion (£12 billion) debt in the next six weeks, warned bondholders. The actual process could take more than a year to arrange.
Part of the company's debt will be swapped for new equity and a likely debt write-off, estimated at $6 billion, reported the FT and advanced-television.com yesterday.
On Monday NTL board met to discuss its rescue plan but bondholders were unhappy because of the lack of information on the matter. Agreed cuts in capital spending could be announced this week.
In February NTL will have to pay an estimated $40 million in interest on bonds issued by two of its divisions.
Although the cable company has the cash to meet this commitment, bondholders are reluctant to see more cash go out of the business before the debt is restructured.
Banks, which had lent a total £4.1bn to NTL at September 30, have senior claims to the bondholders on the assets of the company. So-called Vulture funds and other companies specialising in distressed debt are already circling, buying up NTL bonds, which trade at about 30 per cent of market value.
Fox launches interactive games
Fox Kids Europe NV, the pan-European integrated children's entertainment
company, announced on Tuesday (18/12/01) the launch of Fox Kids Play,
FKE's interactive games channel. The launch follows the signing of a three-year
agreement with brightBlue, Energis Interactive's new service on the Sky
Digital platform.
Fox Kids Play is a joint venture between FKE and Visiware, the Paris-based
interactive-TV games company, to develop a subscription-based interactive
games channels. The games are based mainly on characters and content from
FKE's programme library and will initially feature those from popular
series such as Digimon, Princess Sissi, Power Rangers, Walter Melon, Mad
Jack The Pirate and Diabolik.
Some 5.5 million households will be able to access the games and play
them by using the remote control. The channel will be available to Sky
Digital customers via brightBlue.
Players will be charged via a premium rate service through the subscriber's
telephone bill. The channel will include four games, which will be available
at any one time with new games becoming available on a monthly basis.
An additional 'Pay-to-Play' games will be available through a separate
listing and most games will have multi-player functions.
Fox Kids Play will be promoted on the Fox Kids UK TV channel, currently
reaching six million homes, as well as on the Fox Kids UK website, Fox
Kids publications such as Wickid and both brightBlue's and Energis' marketing
campaigns.
Fox Kids Play launched in France on the Canalsatellite platform in November
2001. The company is also planning to roll-out Fox Kids Play channels
across other European digital platforms.
Natalie Tydeman,
Managing Director, Online and Interactive, FKE said "The launch of 'Fox
Kids Play' is an exciting new venture for FKE that will enable us to capitalise
on our programming assets and characters in order to generate a new revenue
stream. The partnerships with market leaders Visiware and Energis will
provide us with a leading position within a highly lucrative and fast-moving
market in which we aim to participate on a pan-European basis."
Tuesday 18th December
AT&T Broadband new bids
TV reforms in Taiwan
BSkyB 'abuse' verdict nears
UPC/PrimaCom agreement ends
BBC Marketing Chief sacked
Rogers' HDTV improvement
Thai ITV IPO
Alcatel supplies Guyana Space Centre
Thomson acquires Grass Valley
AT&T
Broadband new bids
On Sunday (16/12/01) rival US cable companies Comcast Corp, AOL Time Warner
and Cox Communications Inc submitted revised bids to acquire AT&T Broadband.
Exact details haven't been given, but Reuters sources confirmed that the
three companies made small changes to their initial take-over offers made
two weeks ago, meeting specific issues raised by AT&T.
This Wednesday (19/12/01) AT&T Corp's board is due to meet to review the
revised bids and weigh them against various options including keeping
the operation independent. It is expected that the meeting will provide
some clarity to a sale process begun in July when Comcast offered $44.5
billion in stock in an unsolicited bid to acquire the cable operation.
Microsoft Corp is also participating in the process backing both Cox and
Comcast's bids in addition to offering to inject an additional $4 billion
to $5 billion into the broadband unit if the telecommunications giant
decides to keep it independent.
But while AT&T called for final bids on Sunday, additional changes are
expected to happen after the board meeting. The bidding companies said
that AT&T was not initially forthcoming about what was wrong with their
first bids, lending credence to the theory that several company insiders
were working to try and keep the operation independent.
AT&T maintains that it will stick to certain criteria in relation to price,
ability of AT&T shareholders to maintain equity and adequate voting control,
and the willingness of bidders to assume some of AT&T's massive debt load
and regulatory hurdles.
TV reforms in Taiwan
The Taiwanese Government Information Office (GIO) is to present a proposal
to the Executive Yuan on how to decrease political influence on terrestrial
television stations and address how to improve
the stations' managerial efficiency, reported the Taipei Times.
Feng Chien-San, Executive Director of the Alliance for the Democratisation
of Terrestrial TV, said the integration of terrestrial TV resources into
a public television group is urgent.
"Although terrestrial TV stations still have the advantage, it is gradually
slipping away. If no adjustments are made, the situation will go from
bad to worse," Feng said.
The Public Television Service is the only public television station in
Taiwan. The terrestrial TV stations are: the Taiwan Television Company,
the Chinese Television System, the China Television Company and the Formosa
Television Company which is the only one privately run.
The Ministry of Finance is TTV's major shareholder, accounting for about
30 per cent of shares, while the Ministry of National Defence and the
Ministry of Education are the major shareholders at CTS, holding about
36 per cent of the company's shares.
GIO Director-General Su Tzen-ping said it would be a good idea to help
CTS and TTV work together as a joint venture.
"We're thinking of having less political influence over the two stations
and at the same time helping them survive in an ever-competitive market,"
he said, although he didn't specify any timetable to carry out the plan.
BSkyB 'abuse' verdict nears
On Monday (17/12/01) the UK's competition regulator, the Office of Fair Trading, said it planned to rule against UK satellite TV operator British Sky Broadcasting for breaching competition laws over the price it charges its competitors to carry its channels.
It appears likely that BSkyB will be found guilty of abusing its dominant position in the market for supplying premium sports and film channels to rival distributors according to OFT, which has issued a 'rule 14' letter - which effectively states the case against BSkyB, and is therefore likely to be pursued to court.
BSkyB is able to make a case against the accusation prior to a final decision expected by summer 2002. The case began in December 2000. If BSkyB is found to have breached the rules of the Competition Act, it could be fined up to 10 per cent of its UK turnover for each year, for up to three years (more than £600 million) - and face lawsuits from competitors whose clain for lost revenues would be strengthened if BSkyB lost its case against the OFT.
Sky has long been criticised by both the UK cable companies and DTT service ITV digital for the high 'wholesale' charge it makes for supply of its channels - particularly sport - compared to its own retail charges.
As a wholesaler of content, BSkyB is alleged to undercharge itself compared with the price rival distributors pay to carry its channels such as Sky Sports. Also, discounts BSkyB offers distributors to take more expensive premium channels means they are incentivised to carry a higher ratio of premium to basic channels, such as Sky One, which yield less revenue. These discounts may prevent rival premium channel providers from entering the market says the OFT.
BSkyB responds that the OFT is "simultaneously alleging that BSkyB's wholesale prices are both too high and too low."
The discounts were previously approved by the OFT, which required BSkyB to publish its wholesale rate card for premium channels.
An ITV Digital spokesperson quoted in the FT said that the company was unhappy that the review process would take so long. "We remain concerned at the length of time it has taken to reach this position, and the potential further long delay before any remedies are implemented."
* BSkyB has pulled out of the bidding for the Oscars 'because of the media recession' , and the BBC subsequently won back the rights to screen the Oscars and the Baftas.
The BBC is understood to have paid £500,000 a year for the new contract compared to £700,000 previously paid by Sky.
A Sky source was reported in the Guardian newspaper as saying, "We had a three year deal with Bafta, and the final event was due to be broadcast on Sky One in February 2002. But during our discussions with Bafta this year through the autumn, we were unable to agree on the extent of Sky's financial commitment to the project. We agreed to walk away and they were free to take it to another broadcaster."
The British Academy of Film and Television Arts was reported to be concerned about the low ratings on satellite TV for The Bafta film awards compared to potentially millions of viewers on BBC1.
UPC/PrimaCom agreement ends
PrimaCom AG of Germany and Europe's largest cableco, the indebted and stuggling Holland-based United Pan-Europe Communications (UPC), a subsidiary of United Global Com in the US, reported on Friday (14/12/01) that they are not extending their Business combination agreement to merge Elektro-und Nachrichtentechnik GmbH, Augsburg (EWT) with PrimaCom AG beyond December 15 2001.
BBC Marketing Chief sacked
Jeff Taylor, BBC Worldwide's Director of Global Marketing in Hong Kong - the BBC's commercial arm, was sacked after the opening of an investigation by anti-corruption authorities in Hong Kong on suspicion of taking illegal kickbacks on the sale of BBC merchandise in the former British colony.
Taylor was arrested in October and dismissed last week for, "breaching the company's employment policy on conflict of interests," the BBC said.
It is alleged that he was part of a criminal ring that received between £650,000 and £1.2 million over two and a half years. Taylor was among 12 people seized by Hong Kong's Independent Commission Against Corruption, which is still investigating the alleged fraud against the BBC.
Rogers' HDTV improvement
Canadian Rogers Cable Inc is moving ahead with the launch of its high-definition television service in Ontario, Newfoundland and Nova Scotia the company said over the weekend.
Rogers Cable subscribers can get access to the new service by purchasing a high-definition television ( HDTV) costing some $2,000.
They will also have to exchange their current set-top box for a new HDTV digital set-top box. The new box, which will give customers access to the basic cable package including five HDTV channel, costs $19.95 a month, a $10 increase over previous digital set-top boxes offered by Rogers.
Regardless of the small number of customers, Rogers is moving ahead with the HDTV service and is counting on strong growth in the area during the next two years.
The HDTV sets, which have different dimensions than a standard television, use the 'letter-box format' used in movies. The best HDTV sets feature a more vibrant picture than typical analogue cable television. Rogers says the service will offer the "sharpest, clearest and most realistic broadcast TV images ever seen."
The programmes offered in the HDTV format come from CBS, NBC, ABC, Fox and PBS. In January 2002, Rogers will add The Movie Network and Viewer's Choice Pay Per View.
Despite the limited number of networks offering HDTV, Rogers is convinced customers will be interested in the service, says Michael Allen, Vice-President of Programming.
"This is a very important sector because these people watch a lot of TV," he said. "We want to make sure we're offering them the most current television experience."
The problem facing Rogers may be finding the customers to use HDTV. Allen's best guess is that 60,000 to 100,000 Canadians own HDTV sets, though that number is expected to increase during the Christmas season. He said it is likely that 5,000 to 12,000 Rogers' customers own the new television sets.
Thai ITV IPO
Thailand's local television station ITV expects to raise 1.5 billion baht (€37.5 million) in investment capital after holding an initial public offering (IPO) of shares in the first quarter, ITV President Sanchai Teowprasertkul said.
The IPO price for the shares will be decided in January when the company has completed the reduction of its 10 baht par value.
"The process of changing ITV's par value will be finished by the end of this month," Teowprasertkul said and added, "If foreign players are really interested in ITV shares, then they have to buy them through the IPO like other people. The company has a holding ceiling for foreigners of 25 per cent, as required by law."
As a result of Shin Corp's tender for ITV shares, the holding company of AIS now holds 77.5 per cent of ITV's total shares. Shin Corp is majority-owned by the Prime Minister Thaksin Shinawatra's family.
"Only small-scale investors sold ITV shares to Shin Corp, while major investors still maintain their holdings," Teowprasertkul said, adding that some foreign institutional investors had expressed interest in ITV shares.
Teowprasertkul said that after it completed the IPO, Shin Corp would hold a stake worth 51 per cent of the company's total registered capita.
The firm's President said it still faces a loss of roughly 700 million baht this year despite nearly one billion baht in revenue from the advertisement.
The company is currently negotiating with the government the issue of concession fees, which Teowprasertkul says is the main obstacle to profits.
"If we have to continue paying the concession fee of 700 million baht a year, while other channels pay only 100 million baht, then we do not think we will survive. We'll try our best to clinch the deal with the administration," he added.
"If the company can make a sale volume of around two billion baht, then it will be able to make some profits," he said.
Alcatel supplies Guyana Space Centre
French space agency CNES has awarded a €150 million contract to Alcatel Space, which will head up a European consortium of companies from France, Italy and Spain, to provide technical services for the Guyana Space Center in Kourou, French Guyana.
This major five year contract gives enhanced operational responsibility for the Ariane family of launchers, reflecting Alcatel Space's service offering and expertise, especially in satellite and launcher control. In line with CNES's request for greater involvement by European industry, the participation of co-contractors Vitrociset (Italy) and GTD (Spain) will raise the percentage of industrial return for non-French companies to more than 37 per cent.
Alcatel Space has been in charge of these technical services since 1996, and has operated in French Guyana since 1970. It continues to deliver both its operational system and professional, experienced staff. Alcatel Space will help CNES carry out the necessary changes at the launch base, while enhancing competitiveness and minimising risks.
There are three main aspects to the contract:
The contract primarily covers the operation and maintenance of the weather forecasting, radar and telemetry/command systems which play a direct role in the success of Ariane launches. These systems are activated during the countdown to check out the satellite, and at launch to ensure range safety. During the launch phase, all operational data (flightpath, altitude, etc), is collected, processed and sent to the Operations Manager, giving a complete mission overview. S-band and a Ku-band tracking stations, integrated in the CNES control network, ensure satellite orbital positioning and station-keeping.
The contract also covers the operation and maintenance of all information systems, namely: the telecom networks which provide all links at the launch base and at CNES's technical centre; the camera systems (still and video), used during liftoff in particular; operational information systems and CNES's office systems, including the Help Desk.
The third major facet of the contract is the Operational Coordination Office, which provides logistical help for activity planning at the Guiana Space Center - over 1,000 tasks must be scheduled every day - and also distributes the schedule to all departments concerned.
Thomson acquires Grass Valley
Thomson multimedia of France has entered into an agreement to acquire the Grass Valley Group, a privately held digital media company headquartered in Nevada City, California, USA.
Grass Valley Group is a supplier of digital broadcast equipment including for Internet streaming markets. It offers hardware and software solutions for creating, storing, manipulating, and distributing high-quality video content. Its installed base of servers, switchers, routers, modular products and digital news production solutions affect nearly 80 per cent of the worlds television signals. The company had revenues of approximately $200 million last year (2000).
Valued at $172 million, the transaction remains subject to regulatory approvals and is expected to be completed in the first half of 2002. After synergies, Thomson expects this transaction to be accretive for its shareholders in the first full year of operation.
"There will be a significant gain in this combination for our customers in professional content creation, editing and distribution - no matter where they are in the digital media chain. The Grass Valley Group's video expertise will leverage our capacity to help video professionals work on any content, any time, any place," said Marc Valentin, Vice President Thomson Broadcast Solutions business.
The proposed transaction fits into the development strategy of Thomson's Digital Media Solutions (DMS), a business segment focused on business-to-business solutions for content providers, broadcasters and network operators. Early this year, Thomson enlarged its broadcast activities when it acquired a majority interest in the Philips Professional Broadcast Group.
NTL
meets to restructure
Vivendi
buys USA Networks TV
Vivendi's
Echostar stake
HK
subs pay piracy price
Egypt's
Hebrew broadcasting
NTL
meets to restructure
The sale of its tower transmission business by the UK's largest cableco,
US-listed NTL, is now in doubt as the company struggles to reduce its
$17 billion debt. NTL's board meets today to discuss a major restructuring,
with the FT newspaper reporting expectations that debt-holders will have
to write off about $6 billion of the company's $17 billion debt.
A New York meeting of NTL directors plans a cost cutting restructure,
but there are concerns that reduced capital expenditure will hit ability
to achieve earnings targets. Consequently a radical debt-for-equity swap
and write-off will also be discussed.
NTL's biggest shareholder, France Telecom, could be asked to completely
write off about $5 billion in NTL convertible bonds which it holds before
the middle of next year, and postpone payment $500 million due from May
for NTL's 27 per cent stake in France Telecom's internet subsidiary Noos
say FT reports. Smaller bondholders are also expected to write off a share
in the debt.
Such a restructuring would leave senior bondholders owning most of the
company's equity.
Alternative routes out of the debt quagmire include the sale of its Swiss
cable network Cablecom, and its broadcast mast network - the latter sale
now reportedly run into problems.
Most of NTL's high-yield debt is issued by NTL Communications Corp and
secured against the main assets of the company.
Total bank lending stood at £4.1bn ($5.9 billion) on September 30 according
to the FT. Lenders include Morgan Stanley, JP Morgan, Royal Bank of Scotland,
Bank of Scotland, and a consortium of Swiss banks. Another area of speculation
is that were the banks to take control of NTL, the merger with number
two UK cableco Telewest would occur in 2002 - but there are few takers
for the suggestion that NTL would not survive its debt problems.
Vivendi
buys USA Networks TV
Vivendi
Universal has made its move to be a true global media player with the
$10.3 billion (cash and shares) acquisition of Barry Diller's USA Networks
Inc entertainment assets. Vivendi gets cable networks USA Network and
Sci-Fi, in return for ceding its 43 per cent stake in USA Networks
- valued at $7 billion - plus a further $4 billion in cash and bonds.
Vivendi's EBITDA is forecast to rise full-year 2002 by €600 million
and net profit by €200 million on sales of €32 billion.
Universal Studios and USA Networks entertainment activities are to be
combined in a new company, Vivendi Universal Entertainment (VUE), 93per
cent owned by Vivendi, with USA Networks Chief Executive Barry Diller
as Chief Executive of VUE - the latter considered a remarkable coup on
its own.
USA is not
selling its Home Shopping Network and Internet companies, which include
Ticketmaster. And Vivendi plans to keep Universal Music Group, the world's
largest music company, and its publishing operations separate from the
Diller-controlled company.
Vivendi's
Echostar stake
The USA Networks move follows a decision last week (Friday 14/12/01) by
France's Vivendi Universal to pay $1.5 billion for a 11 per cent stake
in US satellite company EchoStar - seen in the US as a vindication of
satellite's new challenger status to the incumbent cablecos.
The deal also provides EchoStar with a cash injection for its struggle
to forge a merger with competing US satellite platform Hughes' DirecTV.
EchoStar also receives the input of Vivendi's interactive technology -
and gains a programming partner with content from Vivendi's television
and movie studios.
This will both put the pressure on US cablecos to introduce new technology
such as video on demand, as well as potentially causing a price war which
could reverse the trend of regular rate increases - up 35 per cent since
1996.
Gene Kimmelman, co- director of the Washington office of Consumers Union
commented, "The hope is that ž we'll finally see some pricing pressure
on cable." EchoStar has offered low-end packages, including a $9-a-month
package for 100 channels. A merged company with a larger subscription
base would also have a stronger negotiating position vis-a-vis the programming
producers.
For Vivendi the Echostar stake represents an additional distribution channel,
both for its video content - and for its technology. The deal secures
an alliance that provides an eight-year distribution channel for Universal
to EchoStar's 6.5 million US homes. "When EchoStar's merger with
Hughes Electronics is approved, EchoStar subscribers will reach nearly
15 million households," commented Vivendi Chairman Jean-Marie Messier
.Vivendi would also be keen to provide EchoStar with its interactive television
technology from its subsidiary Canal Plus Technologies, including its
MediaHighway set top software.
However, the move is a gamble on the part of Vivendi, as several US states
may file lawsuits to block the merger with DirecTV on antitrust grounds
as the two satellite companies control some 90 per cent of the US satellite
television market.
If the Echostar merger does not go through, Rupert Murdoch, Chairman of
News Corporation, is likely to renew his interest in acquiring DirecTV
to create his global satellite operation. For this reason - among others
- national legislators are wary of a decision either way.
* EchoStar has also seen UBS Warburg the investment bank it earlier rejected, commit to providing $550 million of a $6 billionn facility needed for the merger with Hughes Electronics' DirecTV. UBS originally committed to provide $3 billion of the $ 6 billion facility sought, but dropped out after EchoStar and Hughes parent General Motors, said conditions attached to its loan were too onerous. That loan was eventually supplied by Deutsche Bank and Credit Suisse First Boston, which took up UBS's portion after the Hughes deal was signed.
HK
subs pay piracy price
Hong Kong's single pay TV platform, i-Cable is to charge new subscribers
to fund the fight against piracy.
Issuing the new set top boxes will cost new sign ups $3.85 on top of the
$38 a month subscription fee from January. The company expects that 200,000
of its 550,000 subscribers will have the upgraded boxes by April of next
year. Among the features of the new boxes is a light that flashes when
a householder attempts to use a pirated smart card and i-Cable sends out
a signal to root out those with illegal equipment.
The company remains the only pay TV option in the city of nearly seven
million people 18 months after the government issued five licences to
prospective newcomers. Only Yes TV appears to be remotely close to rolling
out a commercial service, although it is understood that the company has
just started a second round of trials to a limited number of homes.
i-Cable plans to cement its position in 2002 by predicting its net earnings
will grow by a factor of five times more than the $2.6 million total for
2000. Much of the growth is predictated on sign-ups of new subscribers
anxious to watch the World Cup, as well as advertising packages sold on
the back of its rights to show the tournament.
Egypt's state-owned Nile TV is to begin broadcasting Hebrew-language TV programmes to Israel for two hours in the afternoon on the country's regional Nilesat satellite from 1 January. Hala Hashish, director of national television's satellite stations, told the state-owned Al Ahram Hebdo that the move was to present to the Israelis the Arab point of view.
Hashish comments, "It is time to act so that our opinions do not reach them only via the Israeli media, which is far from being impartial." According to the Head of the Nile TV project, Hassan Ali Hassan, the broadcasts will include news, current affairs discussions and cultural slots.
Up to 50 Egyptian Hebrew speakers will be involved. Egypt's Information Minister Safwat el-Sherif reportedly made the decision to launch a Hebrew television channel following the Arab Information Ministers meeting in August when they agreed to inject cash into media backing for the Palestinians.
The Israeli government reported in May that it is to increase its Arabic-language broadcasts and transmit them across the region, partly to counter the effect on Arab public opinion of the Qatari based al-Jazeera satellite channel.