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NEWS Monday22nd July - Monday 29th July 2002
Scroll down page or click below for news - latest first
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Friday 26th July 2002
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AOL accounts under scrutiny
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AOL accounts under scrutiny
AOL Time Warner's stock plummeted Wednesday following the company's admission that its accounting practices were under investigation from the Securities and Exchange Commission (SEC).
Despite having just reported its first profit since completing its merger, investors unloaded the shares. The stock, which ended the regular session down 1 per cent to E11.40 on Wednesday fell even further after AOL Timer Warner Chief Executive Richard Parsons revealed the investigation.
The investigation is in response to allegations in the Washington Post that the firm boosted online advertisement revenue through a series of unconventional deals between 2000 and 2002.
Among practices reported by the newspaper were selling advertisements for online auctioneer eBay and booking them as AOL revenue, bartering ads for computer equipment with Sun Microsystems and shifting revenue between divisions.
AOL said its second-quarter revenues of E10.6 billion were up 10 per cent from last year, with subscriptions growing 15 per cent to E5 billion due to continued growth from its online and cable services.
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Vivendi reforms Canal Plus
Instead of selling the whole of the Canal Plus group as previously thought, Vivendi Universal is to carry out a complete restructuring of its Pay-TV operation in order to reduce its overall debt, writes Sotires Eleftheriou.
Financial analysts have estimated that the sale of various components of the business could bring in over E3 billion, at least making a dent in VU's E19 billion debt.
New Canal Plus will be very much like Canal Plus was before 1997 when it embarked on an ambitious international expansion plan. One of the assets that will be offloaded is Italy's Telepiu TV service. This is expected to be sold to Rupert Murdoch for E1.3 billion at the end of August.
The new structure, Canal Plus SA, a subsidiary of the Canal Plus Group, will combine the largely French elements of the Canal Plus Group. These include Canal Plus Distribution (subscriber management), Canal Plus Regie (advertising sales), the satellite platform Canal Satellite, channel provider Multithematiques, news channel i-Television, international platform Media Overseas, sports channel Pathe Sport and European film studios Studio Canal. It will also incorporate the company 21.6 per cent share in the Spanish operator Sogecable.
Although Vivendi's stock price dropped 6.4 percent early on Wednesday, traders said that had had more to do with uncertainty over the future of another subsidiary, Vivendi Entertainment, which is possibly slated for a sell-off. The new Canal Plus will be 49 per cent owned by Vivendi Universal and listed on the stock exchange.
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Real Networks: all-format server
RealNetworks Inc. has announced an advanced server that's capable of distributing music and video over the Internet in all formats - even those from rivals such as Microsoft and Apple Computers.
RealNetworks claims its new Helix Universal server will cut costs for buyers and enhance the ability of the company's latest streaming software, RealSystem8, when it comes to sending digital content over the Internet. RealNetworks' Chief Executive Rob Glaser said the new server would help to 'reinvent the industry' as it would allow digital media distributors to put content on a single platform, thereby reducing costs.
RealNetworks claims that the Helix Server is capable of sending Windows Media content to five times as many users as Microsoft's server software does when running on the same hardware.
After the announcement, RealNetworks' shares rose 4.57 per cent to E3.66 on the Nasdaq. However, the company's shares have declined by nearly 50 per cent this year. Declining corporate sales contributed to an 8.6 per cent fall in earnings in the last quarter.
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Liberate acquires Sigma
Interactive TV software company Liberate Technologies has announced it has signed an agreement to acquire Sigma Systems - one of the cable industry's leading service management companies.
Under the terms of the acquisition, Liberate will purchase all outstanding shares of Sigma Systems for around E62.3m. Liberate claims that the acquisition will add-to and extend Liberate's market position in the provision of a digital network infrastructure.
The partnership between both companies will also enable the provision of "triple play" services offering video, voice, and data services. "Combining Liberate and Sigma forms a powerhouse for the support of digital infra-structures and we believe give us broader and deeper technical capabilities than anyone in the marketplace," said Mitchell Kertzman, Chairman and CEO, Liberate Technologies.
Among Liberate's clients are US companies AT&T Broadband, Comcast and Cox and European firms Telewest, NTL and UPC. GNI, Dream City Multimedia and SingTel Optus are understood to have signed similar agreements with Liberate in the Asia Pacific region.
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Adelphia execs arrested
Five former executives of Adelphia Communications, who were accused of treating the bankrupt business like a personal piggy bank, were arrested Wednesday (24/07/02), reports The Guardian.
The company's founder, John Rigas and his two sons, Timothy and Michael were paraded in handcuffs as they were taken to the New York federal court. Two other former executives, the one-time vice president of finance James Brown and Michael Mulcahey, former director of internal reporting, were arrested in Pennsylvania.
The SEC alleges that Mr Rigas and other former executives spearheaded a fraud which "concealed rampant self-dealing by the Rigas family". They are accused of using E13m to build a golf course in their home town, appropriating the company jet for personal use and buying apartments for other family members in New York's exclusive Upper East Side, Colorado and Mexico. They are also accused of using company funds to buy shares.
The company is the sixth-largest cable TV firm in the US.
Meanwhile Democrats and Republicans have reached agreement on the corporate reform bill. Under the bill, accounting firms will be overseen by an independent board, under the auspices of the SEC. Firms will also be restricted in the kinds of consulting work they can do for auditing clients.
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UK approves in-flight Internet
The UK's Radiocommunications Agency has given regulatory approval for Boeing to provide airlines and passengers in-flight access to the Internet, corporate intranets, e-mail and other data services.
Boeing intends to start trialling the new technology in the first quarter 2003 on routes operated by Lufthansa and British Airways between Europe and US.
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Telenor goes for a Song
State-dominated
Norwegian telco Telenor is making yet another inroad into the neighbouring
Swedish market - this time in a complicated deal with the Swedish broadband,
data and telecommunications operator Song, writes Goran Sellgren.
Song Networks is buying TelenorĘs Swedish affiliate Telenor Business Solutions
(TBS). In exchange Song will make a new shares issue, resulting in Telenor
becoming the biggest owner of Song Networks with over 40 per cent of the
shares. Telenor might increase its ownership of Song to 85 per cent within
the next four years.
Song Networks was founded in 1995, with the idea to "offer the best broadband
solutions for data communication, Internet and voice to businesses in
the Nordic region". The company is active in all four Nordic countries
and claims to be "the only pan-Nordic operator investing in local access
networks with broadband capacity for businesses".
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Echostar/Hughes
merger: talks resume |
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Echostar/Hughes merger: talks resume
The Federal Communications Commission (FCC) has restarted a review of the proposed E26 billion merger between satellite TV companies Echostar Communications and Hughes Electronics.
Echostar, which operates the Dish satellite network, and Hughes, the parent company of satellite outfit DirecTV, are looking for government approval for a merger that would create the largest pay-TV company in the US. The Federal Communications Commission halted a review in March because it claimed it needed more financial records to be able to proceed.
"We're pleased the process is moving forward and we are very confident that we will receive the necessary regulatory approval," says George Jamison, Hughes' spokesman. Both companies claim the merger will help to expand high-speed Internet access for rural residents, who lag behind city dwellers.
Meanwhile, bankrupt satellite broadband provider, Starband, has received court approval for an agreement to settle litigation with EchoStar.
The dispute between the companies - involving customer base transition, billing and payment issues - was filed on June 20 but required Bankruptcy Court approval.
Effective immediately, EchoStar will begin transition billing and customer service responsibilities of StarBand's retail customer base. EchoStar will also continue billing and supporting its StarBand wholesale subscribers.
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AT&T's losses balloon
Troubled telco AT&T's losses spiralled to a massive E12.7 billion for the second quarter of 2002, up from E191 billion in the same quarter of 2001. In addition, AT&T was also hit by a 6.2 per cent fall in sales to E12.1 billion.
There was more bad news for AT&T broadband which reported that basic video subscribership declined by around 125,000 - a fall attributed to seasonal service disconnects. AT&T Broadband now has 440,000 customers connected to digital video, high-speed data and cable telephony services.
However, Michael Armstrong, AT&T's Chairman and Chief Executive said things could have been much worse. "Given ongoing weakness in the economy and instability among some players in the telecommunications industry, I'm pleased with our second quarter results."
AT&T shares fell to a new 52-week low of E8.80 during trading Tuesday. Other MSO stocks tumbled, including Cablevision (down E1.80 to E7.00), Comcast, (down E2.65 to E18.40), Cox (down E2.64 to E24.48), AOL Time Warner (falling to E11.55) and Charter (which tumbled to E2.66).
Meanwhile, American Midwest cable operator Insight Communications has announced second quarter revenues of E200 million and a net loss of E6.6 million. In the same period the company's subscriber base rose to 1.707 million, a 9.8 percent increase from the 1.5 million reported in the same period of 2001.
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Vivendi
Chairman confirms break-up
As previously reported in advanced-television.com, Vivendi Chairman and
CEO Jean-Rene Fourtou has confirmed that' significant assets' will have
to be sold in order to reduce the company's level of debt.
"Vivendi Universal's debt is too high. Its reduction will entail significant
asset sales whatever happens," said Fourtou in an official statement yesterday
(24/7/02). Among the key assets that will be sold is Canal Plus, Vivendi
Universal's pay TV operator, which currently offers services to 16.5 million
subscribers in 11 countries.
Vivendi has already negotiated a E1 billion loan from banks to prop up
its short-term finances, but is now looking for a second tranche of about
E2.8 billion. However, Fourtou said Vivendi had yet to draw on the first
line of the E1 billion loan and would not do so until the end of August
and even then only "very partially."
Vivendi's postponed first half results, which had originally been scheduled
for July 26, will now be released on August 14.
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Pacific Century Cyberworks' (PCCW) decision to close down its interactive
TV operation after five years has not stopped the remaining two companies
from operating in Hong Kong, writes Owen Hughes.
Pacific Digital Media of Taiwan said that it was still on track to launch
eight cable TV channels in August, delivered via direct to home (DTH)
satellite. Meanwhile, Yes TV is still planning to complete a commercial
trial of seven broadcast and two video on demand channels which have been
running since February. Yes TV claims its services are technologically
more advanced than those of PCCW's.
Both Pacific Digital Media of Taiwan and Yes TV were among the five companies
awarded licences by the Hong Kong government in July 2000 to run rival
pay TV operations to incumbent operator i-Cable Communications. Two potential
operators have now withdrawn while the remaining service, Galaxy, owned
by Hong Kong terrestrial Television Broadcasts, is still seeking an equity
partner.
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Indies
complain about Beeb power
Independent television production companies are becoming increasingly
concerned about the BBC's growing power, claims Tiger Aspect managing
director, Charles Brand.
"Financially it has gone from pauper to prince. Is it generating a golden
age or is it the BBC's agenda to wipe the opposition into dust?" he asked
The Guardian yesterday (24/7/02). While an advertising recession has left
the company's commercial rivals in financial straits, the BBC's budget
has increased and it has been awarded a digital terrestrial licence.
"The BBC has become very powerful," continues Brand. "No one could have
foreseen the scales would tip like this, and the BBC needs to use its
power creatively and generously. The question is whether Greg Dyke's BBC
can do that."
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ICO
acquires MSS Rivals
ICO Global Communications has unveiled plans to acquire two mobile satellite
service (MSS) rivals - Constellation Communications and a subsidiary of
Mobile Communications Holdings.
ICO said it would use stock and cash to buy the assets of both MSS entities.
The company added that it would immediately acquire 49 percent of both
companies, purchasing the remaining 51 percent following FCC approval.
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ITN
editor: not replaced
Richard Tait, ITN's editor-in-chief who unexpectedly quit the company
Tuesday, is unlikely to be replaced.
Instead it seems likely his role will be devolved to the individual channel
editors of ITN's news programmes for ITV, Channel 4 and Channel 5. It's
also possible that the editor-in-chief role may be absorbed by the current
ITN chief executive, Stewart Purvis.
"Richard has made an outstanding contribution to the company, providing
great editorial leadership to all of ITN's news operations. On behalf
of the board, I would like to thank him for his tireless and visionary
service," said ITN's chairman, Mark Wood.
Last year ITN successively fought off a consortium led by Sky News to
retain the ITV news contract for the next seven years in a deal worth
£216m - £10m a year less than the previous contract.
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Pluthero quits Freeserve
Freeserve's founding chief executive John Pluthero is leaving the UK's biggest Internet Service Provider to become chief executive of the troubled telecoms group Energis.
Pluthero will be replaced in the short term by Freeserve's chief financial officer, Eric Abensur, until a successor is found.
As corporate development director at Dixons, Freeserve's former parent company, Pluthero was one of the Freeserve Four - a group of pioneers who helped to develop the 'pay as you go' business model for the Internet. He then led the company to its spin-off from Dixons and flotation at the height of the dotcom boom.
However he is understood to have become increasingly frustrated with his role since Freeserve was sold to France Telecom's web arm Wanadoo for E2.6 billion in December 2000.
"John Pluthero is one of the most successful young chief executives in Britain. His commercial toughness, customer focus and action orientation will fit well with the new Energis culture," says Archie Norman, Energis' recently appointed chairman and the former chairman of the supermarket chain Asda.
Pluthero, 38, is no stranger to Energis as the telecoms company provides the technical infrastructure behind the Freeserve internet service, making Freeserve Energis' biggest customer.
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Galaxy looks for suitor
The Hong Kong government is to allow prospective pay TV player, Galaxy Satellite Broadcasting Ltd, another eight months breathing space in which to find a partner to take a minimum of 50 per cent in the company, writes Owen Hughes.
Galaxy, owned by dominant Hong Kong terrestrial Television Broadcasts, was one of five groups to win a licence from the government in July 2000 to run a pay TV service for the Special Administrative Region (SAR) of China. However, because of its position in the market, it was mandated to sell at least half of its interest in the project.
Now it has until February 28, 2003 to find a partner after a number of would-be suitors, most notably Malaysian DTH platform Astro, walked away from a deal. There are a number of unconfirmed reports that TVB has dropped the price for a half share of Galaxy to E100 million from the E200 million value of the stake in 2001.
A spokesman for the Hong Kong government said that TVB had only asked for an extension of the selling period, not for a relaxation of the conditions. The extra time had been granted to allow viewers in the SAR to benefit from increased competition and "a wider programme choice."
Hong Kong's pay TV sector is dominated by i-Cable which has been operating since November 1993 and now has around 600,000 subscribers, a penetration rate of approximately 28 per cent.
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Rivera
delivers Edinburgh lecture
US Fox News Channel journalist and presenter Geraldo Rivera is to deliver
the Alternative MacTaggart (Alt.Mac) Lecture at this year's 2002 Guardian
Edinburgh International Television.
Rivera's speech is expected to offer a personal insight into the future
of news and current affairs programming, based on his experiences as one
of the USA's most respected and high-profile TV journalists. He was a
war correspondent, and has regularly hit the headlines with a series of
high profile interviews and reports from Afghanistan and the Middle East.
Guests who have been invited to the festival to debate whether young people's
interest in politics can be increased via the media include Michael Portillo
MP, Adam Bolton (Political Editor, Sky News), Janet Daley (Daily Telegraph),
John Sergeant (Political Editor, ITN) and Sian Kevill (Head of Politics
Initiative, BBC.
The festival will also address the fears of the British broadcast market
with regard to the future of public and commercial broadcasting. "Will
ITV be bought by Americans? Is Sky going to buy Channel 5? These are just
some of the questions we are going to be asking," said Jo Burton, the
festival's editorial co-ordinator at a press conference in London yesterday.
"The BBC is probably the most unpopular broadcaster at the moment, but
this is just because it is doing too well. The balance between the BBC
and commercial TV is crucial for the future of the UK broadcasting," he
added.
The Guardian Edinburgh International Television Festival takes place between
August 23 and August 25. For more information go to www.geitf.co.uk
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Foxtel:
new wholesale division
Foxtel has revealed it will set up a separate wholesale division to sell
its content to third parties if Australian regulators agree to its channel-sharing
plans with fellow pay TV provider Optus, writes Owen Hughes.
Foxtel CEO Kim Williams made the announcement in Sydney as the company
continued discussions with the Australian Competition and Consumer Commission
(ACCC) about the desire of the two platforms to share channels.
Their plans were sent back to the drawing board by the ACCC last month
because the regulator believed they were anti-competitive on four counts.
Although Williams said that discussions were continuing with the regulator,
he questioned why "no other company in no other industry has to make its
assets freely available to competitors."
The proposed changes also see Telstra, the half-government owned telco
with a 50 per cent stake in Foxtel, starting to retail Foxtel as a bundled
offering with telephony and the Internet. Williams said that Foxtel would
still act as retailer, although he did not detail what percentage of customers
would have what he termed as a "strong relationship" with the platform.
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FCC to settle digital dispute?
Members of Congress in the US are urging the Federal Communications Commission (FCC) to settle a dispute between the entertainment and technology industries over how to prevent TV viewers from re-distributing digital content over the Internet, according to a report in the New York Times.
In a letter to FCC Chairman, Michael K. Powell, Representative Billy Tauzin and Representative John D. Dingell wrote that the agency should move quickly to require computer and consumer electronics manufacturers to include anti-piracy technology that would prevent TV content from being redistributed.
"While we had hoped that the industry players would achieve a meeting of the minds on these critical issues voluntarily, unfortunately no comprehensive agreement has been obtained to date," the letter read.
In a separate letter, Senator Ernest F. Hollings, the chairman of the Senate Commerce Committee, also encouraged the FCC to act. "Absent robust protection, copyright owners may increasingly restrict their best television programming to cable and satellite networks," he wrote. Earlier this year, he introduced legislation that would have required electronics manufacturers to build copy-protection technologies into their machines. However, it hasn't yet been acted upon.
The Hollywood studios have maintained that they will not send digital copies of movies and other programming unless safeguards are in place to prevent perfect copies from being redistributed online.
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WorldCom: 'business as usual'?
Beleaguered telecommunications company WorldCom plans to emerge from Chapter 11 bankruptcy protection within six months and is pledging that its services to customers will be unaffected.
John Sidgmore, the chief executive of the second-biggest US long-distance phone company, claimed that WorldCom would emerge from bankruptcy as early as January after cutting three quarters of its E40 billion debt.
"For our US operations, we firmly believe that Chapter 11 is the best and perhaps the only way to preserve jobs, continue to serve our customers and to provide for our company's future," John Sidgmore stated in a full page advertisement for Worldcom in the Financial Times yesterday.
Mr Sidgmore says that the company's reorganisation is not going to be a liquidation. However, few commentators are confident that WorldCom could emerge as smoothly as its chief executive insists. Most analysts believe that with the glut of telecommunications capacity, WorldCom will find it hard to sell enough assets.
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VSATs protected from interference
The Satellite Industry Association in the US has praised the Federal Communications Commission for helping to prevent harmful interference to satellite-based VSAT networks.
Under the terms of the order, radar detectors will be prevented from producing harmful emissions in primary VSAT bands. The FCC move further states that, in future, radar detectors will be subject to a FCC certification process to ensure compliance with new emissions limits.
SIA President Richard DalBello said with the decision, the FCC has sent "a clear signal to other unlicensed technologies that they must test their products against licensed services, or face abrupt removal from the market."
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ND Satcom teams with SkyStream
The Europe-based provider of satellite communications network and IP Broadband solutions, ND SatCom and SkyStream Networks, developer of networking solutions for digital media delivery, are to integrate their products and co-market them into an end to-end solution for service providers.
The solution enables them to offer new services such as managed enterprise data distribution, business TV, e-learning and personalised digital entertainment services
Under the agreement, ND SatCom will integrate SkyStream's software and hardware solutions to provide a turn-key offering called the ND SatCom MCP - IP Mediacast Platform. SkyStream's products in the solution include its Source and Edge Media Routers and zBand content delivery platform.
"With ND SatCom's MCP platform, satellite service providers will be ready to exploit the rapidly growing Multicast and Broadband Internet world," says Gerhard Bommas, CTO ND SatCom.
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BBC
World Service overhaul?
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BBC World Service overhaul?
The UK Government is considering a radical plan to use both public and private cash to extend the BBC World Service from radio to television.
Plans are currently being examined by the Foreign Office to improve the struggling BBC World television channel, which has largely failed to make an impact as a global brand.
By contrast, the World Service radio network broadcasts in 43 languages across the globe and is considered the standard for impartial reporting in many countries - despite a drop in audience figures last year by 3 million to 150 million.
"A World Service Television network that was popular and successful would do more to promote British interests abroad than almost anything I can think of," says Dennis MacShane, the minister responsible for funding the World Service.
However, the use of public money is bound to infuriate some commercial news broadcasters such as CNN.
Under present regulations, BBC World has to rely on advertising cash, while its domestic cousin, BBC News 24, is funded by the licence fee. Merging the two operations would help stem BBC World's losses which have risen from E20.6 million to E24 million in the past year.
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Hong Kong's iTV service closes
Pacific Century Cyberworks (PCCW) is to close the world's first commercial video on demand and broadband interactive TV service in September, writes Owen Hughes.
Hong Kong's iTV was launched over a E130 million network in February 1998 by the former Hongkong Telecom as a VoD, music on demand, home shopping and banking service.
Although it reached nearly 100,000 subscribers at its high point, the lack of content choice and variable service quality meant that it was never a serious competitor to cable TV operator i-Cable Communications which currently has 600,000 subscribers.
When PCCW bought Hongkong Telecom in 2000 the new owners put iTV into "maintenance mode" while they tried to decide what to do with the service. The service was never likely to be given a kick-start as PCCW already had a multimedia service in now.com and, as a result, iTV's subscriber base fell to just a few thousand.
A PCCW executive was quoted as saying ''iTV is not attractive to us, but now.com still is." PCCW initially believed iTV and now.com could have synergies in programme licensing but the content operations continued to operate in separate locations and never merged.
Attempts were made to sell iTV's subscriber base to Yes TV early this year but no deal emerged. Yes TV was launched earlier this year as one of a handful of pay TV licencees challenging i-Cable's dominant position.
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Canal Plus back to basics
Vivendi Universal's new head, Jean-Rene Fourtou, is convinced he can fix the company's crisis by breaking up its French pay-TV channel Canal Plus and selling its other unprofitable non-core operations, French newspaper Le Figaro reported last week.
However, not everyone was as confident as Fourtou about the sale of part of Europe's largest pay-TV operator. Canal Plus shares fell almost six per cent as speculators who had bought the stock last week pulled out. Vivendi shares fell four per cent to E17.45 on Friday and have dropped around 70 per cent in the past year.
Fourtou's idea is to sell Canal Plus' film production and distribution assets as well as some of its non-French subsidiaries in Spain, Portugal and Poland. The Franco-American media conglomerate wants to retain 49 per cent of the remaining core operation, consisting of French pay-tv business and the CanalSatellite digital bundle and will seek to sell the remaining 51 per cent on the market for a total of E2 billion.
Among the units due to be auctioned will be film distribution unit UGC, decoder maker Canal Plus Technologies, the cinema and audiovisual production house Studio Canal and new media and Internet activities, Le Figaro said. It is also expected that the company will sign an agreement with Murdoch's News Corp to sell its Tele Piu Italian pay-tv unit for E 1.3 billion at the end of August. Vivendi declined to comment on the report.
Meanwhile, the company has appointed Jacques Espinasse as Senior Executive Vice President and chief financial officer at Vivendi Universal. Espinasse has taken on a six-month assignment as advisor to Fourtou.
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Malaysia TV dispute end
Malaysia has apparently settled a dispute with neighbour Singapore over the transmission of two Malaysian free-to-air channels via Singapore's monopoly pay TV provider, Singapore Cable Vision (SCV), writes Owen Hughes.
Commercial broadcaster TV3 and government broadcast Radio Television Malaysia's TV2 were both pulled from the schedules of SCV at the start of this week. The official reason cited is that overseas content purchased by the Malaysians did not include rights to other markets.
Sources in Malaysia suggested that government officials were privately unhappy that the two channels were being carried in Singapore without controls over the use of the signal and the use of the channels' materials in promotional literature. The two nations often have testy relations and talks between the two sides to resolve the disagreement ended inconclusively.
SCV had been stripping foreign content from TV2 and TV3 for the last 14 months to avoid rights clashes. Both channels are widely viewed in Singapore because of accidental signal overspills from Malaysia.
SCV is offering TV3 subscribers the Disney Channel as alternative tiered service; TV2 was part of its basic package.
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Callahan in trouble
Callahan Nordrhein Westfalen GmbH filed for insolvency last Friday (19/7/02), writes Dieter Brockmeyer
The company owns 55 per cent of the cable operaror ish in Norhtrhine Westphalia, NRW, but said that bankruptcy would not affect the operators regular operations.
However the company's situation is tight. Earlier this year, ish, formerly known as Kabel NRW, made 570 people redundant and its sister company in Baden Wurttemberg - of which Callahan owns 60 percent - laid off its plans to upgrade the cable systems for multimedia purposes.
Industry sources suggest that John Malone's Liberty Media not only intendes to bid for the remaining six regional cable assets of Deutsche Telekom AG, but is also considering buying Callahan's assets and Hesse cable operator iesy. The latter is controlled by the trouble shot English cable operator NTL.
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SMG to sell broadcast?
Scottish Media Group (SMG) is considering getting rid of its television interests, which include ITV's Scottish TV and Grampian franchises, to reduce its debt pile.
Media analysts at investment bank Merrill Lynch earlier this month valued SMG's media interests, at E618 million. However, SMG believes it could get more for the businesses - possibly up to E750 million - because of their significance to both Carlton and Granada in their bid for ITV dominance.
Although no official approaches have been made to SMG for the assets, Germany's Bertelsmann, as well as the two ITV companies, are understood to be interested.
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AOL Time Warner in lawsuit
Law firm Berger & Montague says a class action suit has been filed against AOL Time Warner Inc and certain of its principal officers for 'issuing materially false and misleading statements.'
Filed in the US District Court for the Southern District of New York on behalf of individuals or entities who purchased AOL securities between Oct 18, 2000 and July 17, 2002, the complaint alleges that the company issued materially false and misleading statements about its advertising revenues between the third quarter 2000 through to the end of the class period.
Similar lawsuits were filed last week against AOL Time Warner and Ernst & Young by law firms Lovell & Stewart and Milberg Weiss in the same court.
Meanwhile, shares in AOL Time Warner slid 7 per cent Friday, a day after a management shakeup and amid widespread carnage in the stock markets. The media giant's stock closed at E11.58 after hitting a 52-week low of E10.82 earlier in the day.
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AOL chief quits |
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AOL chief quits
AOL's chief operating officer Robert Pittman has resigned following a board meeting on Thursday, leaving the company's restructuring plans in tatters.
According to the Financial Times, the advertising market collapse undermined Pittman's ambitious targets for the merged company - the world's biggest media and entertainment group since its E160 billion take-over of Time Warner.
Mr Pittman had been a firm supporter of integrating AOL Time Warner's various divisions and promoting the convergence of internet and 'old media' platforms, despite opposition from Time Warner's highly independent divisions.
As a result of his departure, AOL has promoted two other former Time Warner executives - Don Logan, head of Time Inc and Jeffrey Bewkes, chairman of HBO - in a move which is expected to mark a retreat from the integration policy favoured by Pittman.
The removal of Mr Pittman was broadly welcomed by Wall Street. Nevertheless, shares in the company slid by more than 5 per cent to E12.45 on the announcement.
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French broadcasters acquire TPS
French broadcasters TF1 and M6 have acquired French digital satellite platform TPS, following their purchase of the Suez Group's 25 per cent share in the company, writes Eleftheriou Sotires.
As a result, TF1 now has a 66 per cent share in TPS with M6 owning the remaining 34 per cent.
According to a TPS press release, the move shows TF1 and M6's intention to pool their resources and develop their position in digital television, particularly digital satellite TV. TF1 and M6 would also like to acquire the rival Canal Satellite Digital platform and its premium Canal+ channel.
Emmanuel Florent remains President Director General, while Director General Jacques Espinasse leaves to become the financial director of Vivendi Universal, replacing Guillaume Hannezo. Hannezo becomes advisor to Jean-Rene Fourtou, the new Vivendi-Universal boss.
When TPS was created in 1996, TF1, M6 and Suez each held 25 per cent of the stock with the remaining 25 per cent jointly owned by France Telecom and France Television. Last December TF1 acquired the France Telecom/France Television portion for E195 million bringing its stake to 50 per cent. The amount Suez has received for the latest transaction is believed to be around E160 million.
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Ish cuts cable investment
The German cable operator ish, controlled by the US investor Callahan Associates, is to cut its investments in German cable region, Baden Wurttemberg (BW) - a region with 3.5 million connected homes - writes Dieter Brockmeyer.
The group has stopped upgrading the cable systems for fast Internet access and interactive TV as a result of the services failing to meet the company's targets. So far, only 80,000 homes have been upgraded instead of the 900,000 that were planned for this year.
Callahan only finalised the acquisition of 55 per cent of the Baden Wurttemberg (BW) systems from Deutsche Telekom AG, after previously acquiring 60 per cent of the North Rhine Westphalia (NRW) systems with about 4.5 million homes. In NRW, Callahan only avoided insolvency by Deutsche Telekom postponing Callahan's payments until this fall.
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Australia to abandon HDTV?
Australia looks ready to reverse its policy of using digital spectrum capacity for high-definition TV and instead push its terrestrial channels into multi-channelling, writes Owen Hughes.
Communications minister Richard Alston wants to tie in the push to multicasting with a change in the anti-siphoning legislation that keeps major sports events on the terrestrials to create a source of content for any extra channels.
Two terrestrial channels - the government funded Australian Broadcasting Corporation, and SBS - have already been permitted to run extra channels using digital spectrum. But the Nine and Ten commercial channels have fiercely opposed multi-channelling. They fear they will be forced to find extra programming to fill airtime which will dilute the mass audience that draws advertisers.
Seven Network is an advocate of multi-channelling. It has already operated a sports channel that was carried on the Optus pay TV platform until earlier this year.
In 1999 the Australian government voted to use the spectrum for datacasting, while putting stringent curbs on the genres of programming and how much video could be carried. These measures were to mollify the terrestrials who were worried that datacasters would become de facto new channel operators ahead of the end of the moratorium on newcomers that ends in 2007.
The conditions meant that Alston had to cancel the datacasting auction because of a lack of bidders in May 2000. Alston's department conducted a review of datacasting policy earlier this year and concluded it was not viable because of a lack of commercial interest.
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BBC attacked for digital spend
BBC executives came under fire from MPs on Thursday (18/07/02) following moves by the public broadcaster to sharply increase licence fee spending for digital TV channels.
The FT reports that a government select committee criticised the BBC director-general Greg Dyke over moves to plough E432 million of licence payers' money into new services, including six digital TV channels.
Labour MP Chris Bryant reportedly criticised the rise because it contravened earlier BBC guarantees that expenditure on digital TV channels would not breach a 10 per cent ceiling on revenues generated through the licence fee.
Under the current plans, the BBC's digital spend is expected to be around 13 per cent of the BBC's E3.93 billion revenue accrued through the 2001 licence fee. BBC Four is watched by one in a thousand people yet the BBC spends more per hour on its programming than it does on BBC2 which is watched by one in four.
Meanwhile, the BBC announced it wrote off E2 million to cover the cost of closing Internet shopping and web access business, Beeb Ventures. Beeb Ventures, which comprised the beeb.com shopping portal and beeb.net ISP business, closed in April.
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Microsoft profits soar
Profits at software giant Microsoft soared in Q2, thanks largely to businesses licensing its Windows XP operating system before the 31st July deadline.
The company reported net profits of E1.5 billion, considerably higher than the E65 million earned in the same period last year. Sales also jumped 10 per cent to E7.25 billion.
However, profits would have been much higher if the firm had not been charged E806m after tax for its failed cable investments. Microsoft's latest foray into a new market - the games console business - has also proved problematic.
Around 3.9 million X-Box units were shifted, but that figure was a huge slide from the 6 million boxes Microsoft initially claimed it would sell.
Over the past 12 months, sales of Windows were worth E18.9 billion, a rise of 7 per cent. However, the Seattle-based company lowered its sales forecast for the year to June 2003 to E31.4 billion from E32 billion, reflecting the growing maturity of many of Microsoft's markets.
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