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NEWS Monday 22nd April-Monday 29th
April2002
Scroll down page or click below for news - latest first
| Tuesday | |||||
Friday 26th April 2002
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Messier
survives shareholder backlash
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Messier survives shareholder backlash
Vivendi-Universal
boss Jean-Marie Messier got through Wednesday's (24/4/02) Paris annual
general meeting in front of 6,000 shareholders more or less unscathed
as he did not resign and was not sacked from his post as President-Directeur
General.
The shareholders were particularly worried about the way the share price
has tumbled - it has fallen 35 per cent since the beginning of this year
and divided by three over the last two years. The majority of the questions
were implied criticisms of the directors' salaries and bonuses, particularly
in view of the questionable performance of the company. Criticised that
the stock options mechanism implies little risk, Messier undertook to
use the whole of his bonus immediately to purchase V-U shares.
Messier made five management strategy undertakings in order to bring V-U
back into financial health:
No new significant acquisitions
To reduce the debt
Concentrate on the day to day running of the company
Maximising synergy
Tackle the sources of losses.
The last point refers specifically to Canal Plus and to the group's Internet
activity. Messier promised to all but eliminate the losses in the coming
weeks.
Asked as to why he had sacked Lescure, Messier reiterated the poor financial
state of Canal Plus and that Canal Plus' number two, Denis Olivennes,
had resigned.
Although there were some vociferous criticisms of the way Messier had
handled Canal Plus, the majority of the Assembly backed Messier. Bruno
Gaccio, author of the Canal Plus flagship satirical programme Les Guignols
said that his 8,000 Canal Plus shares were now worth only a fraction of
the original E280 each, nevertheless he was committed to the spirit of
Canal Plus. The majority of the Assembly did not share his view and he
was told in no uncertain terms to "take your puppets and sell them to
another channel. I've had enough of seeing a them spit in the soup every
night," referring to the way the Guignols regularly satirises Messier.
Almost all the resolutions were passed without any difficulty, including
one extra one added at the request of a shareholder to remove Lescure
from the Board which was passed by 55 per cent, with only 0.12 per cent
voting against. However, two resolutions did not go Messier's way, concerning
the creation of stock options. Messier said that they were an essential
part of his strategy and that an extraordinary general meeting would be
called in order to adopt these resolutions.
Vivendi has seen its share price plummet, despite sales rising ahead of
forecasts, due to negative sentiment about Messier's acquisition blitz
and resulting debt - a spree which Messier has now vowed has come to an
end. The figures were bad: E13.6 billion (£8.4billion) in losses in 2001,
E34.6 billion in debts, and a share price 40 per cent down on a year ago.
Back to top
Kirch
demise boosts Niche TV
The crisis in Germany's Kirch Group is causing a run on new TV ventures
in the country.
Digital niche channels in particular are now receiving increased interest,
primarily from the public broadcasters.
At a convention of the music industry ARD Program Director Guenther Struwe
surprised the audience with plans to launch a thematic music channel focusing
on Jazz and Rock music. At the ARD head office a speaker confirmed that
there were such plans. However, the project still had to be agreed upon
by the board of the member networks' General Directors that form the ARD
body.
Also the new General Director of ZDF started an offensive to launch a
second ZDF channel to open up the benefits of a network family such that
at ARD or the German commercial ventures.
However, public opinion about such plans is not very promising. Most feedback
from politicians and regulators does not appear to promise any quick success
for such plans. Commercial niche companies, such as TeleMunchen Group,
TMG, are also trying to benefit from the Kirch crisis by regaining TV
market share.
At the end of this month, TMG is re-launching its advertising-funded Tele
5 channel which was shut down about ten years ago; the Kirch sports channel
DSF will take over all of its distribution.
RTL 2, a channel where TMG - with Disney - is one of the main shareholders,
has announced that next year it will launch a free satellite channel with
Japanese animation, disregarding the doubts voiced by co-shareholder RTL
Group.
However, TMG's plans for several thematic cable channels to be launched
this year had been put on ice because there none of the planned new cable
businesses in Germany have come to fruition to date. But the time is considered
ripe for taking strategic steps to prepare for better times. "And that's
what we are doing", says TMG CEO and main shareholder Herbert Kloiber.
*Mediaset
eyes ProSiebenSat.1
Italian commercial broadcaster Mediaset SpA could take a stake in Kirch
Media's broadcasting company ProSiebenSat.1 Media AG says Mediaset Chairman
Fedele Confalonieri - as reported yesterday - further details follow.
At a shareholders' meeting on Wednesday (24/4/02) Confalonieri said that
looking ahead he, "could see us involved in a situation in which we are
co -protagonists" with the broadcaster.
Kirch Media which filed for insolvency on April 8 is a key part of Kirch
Group, and owns 52.5 per cent of ProSiebenSat.1.
ProSiebenSat.1 is one of Kirch Media's more desirable assets.
Mediaset has a 2.28 per cent stake in KirchMedia, while its parent company
Fininvest holds another 2.58 per cent. Mediaset is 48 per cent controlled
by Italian Prime Minister Silvio Berlusconi.
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Taiwan's digital CATV deployment
Digital set-top box technology company Advanced Digital Broadcast has become the primary digital cable set-top box supplier to China Network Systems (CNS) Taiwan, the Koo's Group and News Corp-controlled STAR's joint venture cable TV operator.
ADB will supply the boxes over the next four years in a deal making it a major supporting partner in CNS's plans to become Taiwan's leader in developing interactive TV.
Taiwan, with close to five million cable TV subscribers - some 80 per cent of the nation's TV households - has the highest penetration of any pay-TV market in Asia Pacific. STAR, Asia's leading multi-platform content and service provider, and the Koo's Group, one of Taiwan's leading business conglomerates, created CNS in May 2001. Headed by CEO Nelson Chang, CNS plans to deploy a fully interactive digital cable TV network by 2005.
ADB will supply its low-cost digital cable ABQ6H44 set-top box, incorporating the Sti5512 multimedia chip processor from ST Microelectronics, and an in-house designed tuner incorporating the MT2040 IC from Microtune.
"CNS's impending rollout of digital set top boxes will be a major milestone for cable TV development in Taiwan. Viewers will benefit with innovative digital interactive TV services, premium programming, enhanced picture and sound quality and TV functionalities like parental control and Chinese-language electronic programme guides," says Daniel Cheung, COO of CNS.
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SES new TV and Internet platform
SES Americom Inc, an SES Global Company, has filed a petition with US regulator, the FCC, to allow it to offer to US television program owners and consumers a new satellite platform through which any programmer or content creator could provide satellite television services directly to the public.
Dean Olmstead, President and CEO of SES Americom, speaking this week at the Satellite Entertainment 2002 conference in Monterey, California, said, "These television services will be provided via a new satellite that we intend to launch into the 105.5 degrees West Longitude orbital slot. Another new SES Americom satellite, at the adjacent 105 degrees WL slot, will enable us to provide high-speed broadband connections to US residences.
"All of these services - TV and broadband - will be available to US consumers who purchase a single, small satellite dish and related equipment, into which the latest two-way digital technologies will have been incorporated."
SES Americom intends to offer the new platform, named " Americom2HomeSM", using a licence granted to its affiliate by the Government of Gibraltar, relating to an orbital location over the United States at 105.5 degrees WL. This 'slot' falls directly between orbital positions used by DirecTV and EchoStar at 101 degrees and 110 degrees, respectively. Both A Americom2Home and the existing satellites use frequencies in the 12.2-12.7 GHz range, which is set aside internationally for direct broadcasting to the home. SES Americom also holds FCC licences for both Ku-band and Ka-band satellites at the 105 degrees WL location.
Olmstead explained that the new Americom2Home system will be different from the current satellite television services offered by EchoStar and DirecTV. Unlike these providers, SES Americom itself will not offer any retail services to consumers. Instead, Olmstead explained, "We will create a best-in-class DBS satellite platform, on which we expect a wide variety of content providers - large and small, established and start-up, mass market and niche, advertising-supported and pay-per-view - will lease capacity in order to offer their programs and interactive entertainment directly to American consumers."
This open DBS platform approach is modeled on the success of SES Americom's sister company in Europe, SES Astra, which operates 12 DBS satellites on which broadcasters and content owners provide numerous 'free-to-air,' pay television, and broadband offerings directly to residences throughout Europe.
In Europe, the programmers manage the on-going relationship with the end viewer (offerings, subscription plans, billing, etc), while SES Astra provides the satellite capacity, transmission services and general marketing support.
SES Americom expects the Americom2Home system to encompass multiple satellites at the 105 degree/105.5 degree WL orbital slot, creating a satellite 'neighborhood' at that location. "We should be able to offer both television programmers and Internet service providers a range of satellite service options at the 105 degree/105.5 degree location," Olmstead said. "No one in the US market has ever been able to offer the flexible and unique configurations of satellites in one 'neighborhood' that we will make available to our customers."
If prompt FCC approval was given, the Americom2Home system could be in operation as early as 2004 says the company. Meanwhile, the company expects to develop its plans in more detail through discussions with a wide range of television programmers, broadcasters, Internet service providers, satellite equipment manufacturers, and others.
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MTG Q1 profit boost
Swedish media company Modern Times Group MTG AB said Wednesday (24/4/02) that its first-quarter net profit increased to SEK32 million (E3.5 million) from SEK24 million (E2.6 million) in the first quarter of 2001, despite a six per cent decline in sales. (1SEK = E0.108226 as at 24/4/02)
Its net result was helped by SEK56 million (E6 million) in net exchange rate gains. Sales fell to SEK1.42 billion (E153.7 million) from SEK1.51 billion (E163.4 million).
Sales for its broadcasting unit - which includes its free and pay-TV operations - were SEK1.01 billion (E109.3 million), down from SEK1.03 billion (E111.5 million) in the year-earlier period.
MTS, the leading satellite television broadcaster in the region, said its pay- TV sales were up 13 per cent, but it didn't provide a specific figure. The operating profit for the pay-TV operations, which include the Viasat and Viasat Sport channels, doubled to SEK61 million (E6.6 million), the company said.
For the quarter, MTG's overall operating profit was SEK20 million, down from SEK66 million. Its pretax profit was SEK61 million, against SEK38 million.
MTG's sales were nearly 11 per cent below the general forecasts of SEK1.59 billion compiled by SME Direkt. Its shares closed down SEK37, or 16.8 per cent, at SEK183.
MTG was one of several Swedish companies controlled by financier Jan Stenbeck that saw its shares fall sharply Wednesday.
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Greenland launches Digital Terrestrial
Greenland's national telecom company, TELE Greenland, is about to roll out a digital terrestrial TV operation (DTT) based on the DVB standard to 12 communities on the West coast of Greenland. Distribution will consist of a program package of two to five channels covering all regions, in addition to a number of individual channels, which will differ from town to town.
To secure the program content, digital-TV and IP streaming conditional access technology supplier Conax AS in Norway has been awarded a contract to supply the Conax-CAS3 conditional access solution for Digital TV operations.
This scaleable and 'well-proven' encryption technology is based on the DVB platform. The contract with TELE Greenland includes a central delivery of Conax-CAS for nation-wide distribution as well as encryption at the local head-ends. Also supplied is Conax'-BMS Blue modular and flexible Business Management System, which can be tailored by local TV operators to manage their customer base as it supports various forms of encrypted pay-TV services.
"Conax is pleased to be selected as the CA supplier for Greenland, which we see as part of our home market. The scalability of our CA technology makes it just as suitable for customers with small niche operations as for large-scale operators distributing content to millions of subscribers", says Shahzad Abid, Vice President Sales & Marketing in Conax AS.
"Greenland, being in the forefront of offering advanced telecom services, makes it a particularly interesting market for Conax with regard to deployment of new services, such as interactive TV, IP streaming, E-gaming and payment solutions."
"It has been a pleasure to work out the plans for implementing the CA technology in Greenland together with Conax. TELE Greenland is convinced that Conax is the right choice for Greenland," says Anton M Christoffersen, CEO, Board of Management, TELE Greenland.
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AOL
share value disappears
Changes in the way US companies report their finances, by not allowing
companies to amortize goodwill following mergers, have resulted in AOL
Time Warner reporting a E60.3 billion quarterly loss - the biggest in
US corporate history. This compares to a net loss of E1.52billion the
previous year.
Excluding this 'good will' write off, the company saw turnover increased
to E11 billion - some four per cent up compared to the year before, with
a 14 per cent rise in subscription revenues to E5.23 billion, helping
to offset a 13 per cent decline in advertising sales to E2 billion. Ebitda
rose three per cent to E2.28 billion.
One report noted how by Wednesday night, the combined company was worth
E105.2 billion - roughly the value of Time Warner before the E118 billion
AOL/Time Warner acquisition, suggesting AOL's market value has evaporated.
Back
to top
Video
Networks seeks finance
Simon Hochhauser, Chief Executive of UK VOD via ADSL provider Video Networks
directly blames former PTT BT's 'uncompetitive wholesale pricing' for
its need to seek new financing.
The company is reported by the FT to be in survival funding talks with
investors to end a year's stagnation that has seen it cease marketing
to potential customers. Branded Home Choice, the company's video-on-demand
service is delivered via BT Group's high-speed broadband telephone lines
in London. But the wholesale pricing by BT for access to the network costs
£50 (E81) a month for each line while customers pay as little as £6 (E9.7)
a month. Consequently the reguluator Oftel is being urged to put pressure
on BT to reduce its prices.
Hochhauser was reported by the FT as saying, "We need to raise money over
the next three or four months, but it will be less than £150 million (E243
million). There is strong interest and we are talking to financial institutions
and possible strategic partners."
Building of its 15,000 subscriber base has cost £220 million (E356 million),
raised by the privately-owned group, whose backers include Sir David Frost,
Lord Owen, GE Capital and a Microsoft founding executive.
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ITV Digital sale to proceed
The UK TV regulator, the Independent Television Commission ruled yesterday (25/4/02) that it has not been able to secure additional funding for ITV Digital on terms that would enable it to commit to a long-term sale. The digital broadcasting licences owned by ITV Digital will be revoked and can be transferred to another operator by the ITC which has produced a tender document, made available yesterday, and will formally proceed to an accelerated re-tendering process if pay services cease to be broadcasting - but few see signs of any buyers.
"I've had the privilege of seeing the business model, and its difficult to see how the platform can be made to work," said Phil Lines, controller of development at Granada Sport, talking about ITV Digital in the Metro newspaper. Nonetheless, Nick Dargan, the administrator from Deloitte & Touche, is believed to have received at least six approaches for ITV Digital's assets - but not the company as a whole.
In fact the prospects of a single buyer have receded still further with the administrator saying that an additional £100 million (E162 million) would be needed by ITV Digital to break even, on top of the £900 million (E1,457 million) spent acquiring its 1.26 million customers and the additional £300 million (E486 million) due to be spent in the original Carlton Communications and Granada business plan.
The accelerated sales process is expected to last six to eight weeks - compared to six to 10 months normally taken for even a routine licence renewal. The ITC is required to approve any licence applicant.
Free-to-air digital terrestrial channels such as BBC Choice, BBC News 24, BBC4, ITV2 and S4C will continue to be available to ITV Digital subscribers, but paid-for services such as Sky Sports and ITV movie channels will not.
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Finnish licence financing 'obsolete' |
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Finnish licence financing 'obsolete'
Licence financing for public service television is now being questioned in Finland. Kimmo Sasi, Conservative Minister for Communications, and thus in charge of television, stated his belief that licence financing of the country's public service broadcaster, YLE, is about to become obsolete.
"With all
the new transmission technologies in view I can well foresee a development
whereby YLE might transform itself to a system of pay-TV services, where
viewers pay just for what they want to watch."
The time perspective for Sasi is, however, rather distant: an implementation
of such a pay TV system could, according to Sasi, happen in ten to twenty
years.
DTT was introduced in Finland on a massive national scale last August.
As in neighbouring Sweden, the introduction has so far been a very slow
business, initially mainly due to the shortage of functioning MHP set-top
boxes.
Now Suvi Linden, the Minister of Culture (in charge of television content,
as opposed to Sasi, who is supervising technical development) wants to
give the ailing DTT operators (YLE, the two major Finnish media groups
Alma Media and Sanoma-WSOY, and Canal Plus) a helping hand by coupling
up transmitter network rental fees with the size of bandwidth uses, or
the number of STBs or digital TV sets shipped.
The MD of transmitter operator/ owner Digita (51 per cent owned by by
YLE), Pauli Heikkilae, rejects this idea, claiming that it is not Digita's
mission to "act as a bank for the programming operators," but this is
the situation already today. YLE pays a full price for the transmission
of its multiplex, while the commercial operators pay according to their
use of bandwidth, ie today only some 50 per cent.
"We have invested some E30 million in the digital transmitter network,
and it will take us at least seven to eight years to recoup that investment,"
Heikkilae points out. Soon YLE will also step down as the majority owner:
according to a deal made some years ago France's TDF will acquire a larger
share in Digita next year and become the majority owner.
Kimmos Sasi vehemently rejects all suggestions of the state subsidising
the DTT boxes, despite the fact that, so far, only some 20,000 boxes have
been shipped. A first delivery of 500 fully MHP-compatible Sony-manufactured
boxes, is expected next month, but full scale distribution is not expected
until December at the earliest.
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Kirch's next move
Leo Kirch may loose the majority of his empire's core business, Kirch Media AG, to Rupert Murdoch's NewsCorp and other investors suggest recent reports.
On Tuesday (23/04/02), it leaked out that Kirch had finally agreed to give up 60 per cent of his Kirch Media venture, including the TV production and distribution units and 52 per cent in the commercial free TV holding ProSiebenSat.1 Media AG for a bridging credit of up to E800 million.
This credit will also give some breathing space to the debt¯laden platform Premiere, at least until September, sources say. A payment of E1.7 billion to BSkyB is due by October, which makes the option of backing out from Premiere World more appealing. This could pave the way for Murdoch in the German media market.
Murdoch is not the only media player interested on KirchMedia. Mediaset SpA Chairman Fedele Confalonieri said Wednesday (24/04/02) that the Italian commercial broadcaster could take a stake in Kirch Media's broadcasting company ProSiebenSat.1 Media AG
But not everything is lost for the 75-year-old founder of what was once Germany's largest TV broadcasting and film rights group. It seems that the best person to help administrators handling the collapse of his German media empire is no other than Leo Kirch himself.
It is rumoured that Kirch could be getting between E2 million and E3 million as a consultant. Kirch has resigned as Chief Executive of KirchMedia, whose other top managers are now also acting as advisors to the insolvency team. Kirch's consultancy agreement is due to be discussed at a meeting of creditors on Friday, reported the FT.
Although Dieter Hahn, Kirch's second-in-command, remains Managing Director of TaurusHolding, the group's holding company, there are understood to have been informal discussions about a similar contract in the likely event of the holding also filing for insolvency.
But the expenditure on Kirch Media does not end here. Michael Jaffe, the administrator appointed by the courts, is to be paid an initial E5 million for managing the insolvency process, KirchMedia investors have been told. This figure has been decided by the German court, they said, while the payment to Kirch was being brokered by Wolfgang van Betteray, the insolvency expert and former Kirch advisor who is now Chief Executive of KirchMedia. It is reported that investors weren't very happy with these plans.
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Messier expected to stay
Jean-Marie Messier was expected to get board support at Vivendi Universal's annual meeting yesterday (Wednesday 24/4/02) despite the company's share price slump and a negative public reaction to his sacking of Canal Plus head Pierre Lescure - thanks to better-than-expected first quarter results and Vivendi reducing its debt target and reiterating forecasts for the rest of the year.
In addition the unexpected electoral success of right wing politician Jean-Marie Le Pen and resulting political upheaval is reported to have made it less likely that French board members would vote to fire Messier. They are reputed to have previously privately discussed replacing Messier with the relatively low-profile Thiery Breton, Chief Executive of Thomson Multimedia, who was described as having the right credentials for the job.
A majority of the North Americans on the board are also believed to be opposed to keeping Messier in place, but will support him in public for now.
Le Pen had sought to link his opponent President Jacques Chirac, with Messier to cash in on Messier's negative public image following the sacking of Pierre Lescure, MD at Canal Plus, Vivendi's loss-making pay-TV arm.
Unions representing thousands of Canal Plus employees and anti-globalisation groups promised "surprise action" at the meeting that will call for Messier's resignation.
Vivendi's first-quarter results are expected to show the overall operational strength of the group's businesses, but a further deterioration at Canal Plus. Vivendi said its net media debt fell to around E17 billion at the end of March from E19 billion at the end of 2001. Vivendi Universal shares pulled back earlier losses of 1.8 per cent after the results and were down one percent at E38.65 ahead of the shareholders meeting.
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ITV Digital shutdown starts
ITV Digital's future may be uncertain, but the prognosis is certainly bleak with the broadcaster's pay-per-view film channels - ITV Select - taken off air so quietly on Monday (22/4/02) that none of the other media (including us) appeared to notice.
The four channels of Hollywood films and adult entertainment went off air on Monday after ITV Digital's administrators decided to stop funding it and the business was seen as no longer viable without ITV Digital's financial support.
At the time of going to press there were no more details on potential partners for The Football League, which is reported to be seeking a broadcaster to join it in bidding for ITV Digital. The League is owed it £178.5 million (E290 million) by ITV digital and is consequently planning to sue parents Carlton and Granada for payment.
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NDS fights in court
Rupert Murdoch's pay-television software subsidiary NDS called on a Californian judge to throw out a $1 billion (E1.12 billion) hacking lawsuit issued by rival Canal Plus Technologies.
The case was filed on Tuesday (23/04/02) and although NDS did not try to refute the allegations made previously by its competitor it denied any wrongdoing. NDS made a string of technical arguments which, it said, were each enough to justify striking out the suit.
Canal Plus alleges NDS compromised its own pay-television security software during 1999 and had copies of it distributed on the internet.
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Comcast gets SVOD
US cable and satellite-delivered premium movie channel, Starz Encore Group LLC, a wholly-owned subsidiary of Liberty Media Corporation said that its Starz On Demand subscription video-on- demand (SVOD) service is now available as part of an early trial in Comcast Cable's Willow Grove and Lower Merion, Pennsylvania systems.
Starz is one of the largest providers of cable and satellite-delivered premium movie channels in the United States, owning 15 US channels with approximately 114 million pay units.
As the single premium SVOD service in the markets, Starz On Demand is currently bundled at no extra charge for Comcast Digital Cable customers with the Starz Super Pak, Starz Encore's collection of digital hit movie channels.
"Comcast now has more than three million VOD-ready homes nationwide, and this early trial of SVOD provides our digital cable customers in Willow Grove and Lower Merion with even more viewing choices and convenience," said Ed Pardini, Regional Vice President for Comcast Cable. "Starz Encore has provided us with a collection of hit movies that offers our customers an enhanced entertainment experience complete with the added convenience of being able to pause, rewind and fast forward selections with their existing digital cable service."
Meanwhile on Tuesday (23/04/02) the members of the Senate Antitrust Subcommittee discussed the E53 billion ($47 billion) AT&T Broadband and Comcast merger. The transaction would combine two of the US largest cable providers, and is still awaiting regulatory approval. Senators were particularly concerned that the merger could positively or negatively affect cable rates that since 1996 have risen at three times the rate of inflation, and last year at more than seven per cent.
Comcast President Brian Roberts and AT&T CEO Michael Armstrong emphasised that the satellite TV industry is providing competition to cable. "Promoting facilities based competition - telephone against cable, cable against satellite, satellite against wireless - was a cornerstone of our nation's pro-competitive communications policy of 1990s," Roberts told the subcommittee.
"Our industry certainly has got the competitive message," with competition leading the industry to invest $55 billion in network upgrades. Comcast alone has invested more $5 billion in new communications technologies, Roberts said.
Comcast also agreed a deal with Motorola Broadband Communications Sector in which Motorola will provide VoIP customer premise equipment products for Comcast's Voice over IP trial in Detroit.
Motorola will provide its SURFboard SB3500 embedded Multimedia Terminal Adaptors (eMTA) to support the ongoing trial and initial 2002 market deployment objectives that may result from the trial.
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League
adds to ITV Digital options |
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League
adds to ITV Digital options
The administrators may have put ITV Digital up for sale, but the situation
is far from resolved, with the Football League - who were always convinced
the move was just a negotiating ploy - now apparently preparing its own
bid for the Digital Terrestrial platform, in conjunction with a broadcaster
(not decided upon) who would handle the non-soccer channels.
The industry
at large had been considering who would potentially both want and be able
to buy which assets - or if there really anyone who would buy the operation
as a not-going-concern. Now the speculation includes 'who would partner
the League? The League plan is that it would set up its own TV channel
in return for a share of future profits - and presumably use the £178.5
million (E290 million) it is owed as its stake in any joint bid - more
than double anything offered by ITV Digital.
Talks held yesterday between ITV digital
and the regulator, the ITC, focussed on facilitating a quick sale of the
business with the ITC saying it would do all it could to make the sale
a speedy process - with an announcement expected tomorrow (Thursday 25/4/02).
The package put up for sale does not include ITV Digital's biggest debt,
the E290.7 million owed to the Football League for the final two years
of its TV rights deal. The urgency for a sale by ITV Digital is because
as subscribers desert - at a rate of 4,000 a day from a total of 1.2 million
- so the value of the company declines.
June is put as the earliest date such a sale could be legally processed
- though the Football League - potentially filing a E518 million lawsuit,
says that it would appeal against any decision that left them unpaid.
"(ITV Digital parents) Carlton and Granada have a combined market capitalisation
of E8.14 billion. I suspect we will today see a rise in their share price
because of yesterday's (Monday's) announcement. They can afford to pay
their debts," says David Burns of the Football League.
Burns added, on UK radio, "Round about the beginning of March, when Carlton
and Granada first approached the Football League to seek a price reduction,
what became very apparent was that their business plan was to close the
pay TV element of their digital platform. They are not contemplating closing
the free-to-air platform, because over the next 10 years they will pick
up from the government over E3.25 billion in straight profit, known as
the digital dividend."
However, the rest of the market is considering the move at face value,
evaluating potential bidders. Top of the touted options is a management
or ex-management buy-out backed by venture capitalists. ITV Digital chief
executive Stuart Prebble would head faction one, while Stephen Grabiner,
former chief executive of the platform's precurssor, On Digital, is reported
to be backed by Apax Partners as another potential bidder.
BSkyB - the UK's only successful Pay-TV operator - has indicated it isn't
interested in buying its rival, and would face severe regulatory hurdles
as it was forced out of the original DTT consortium for fear of increasing
its market dominance. But Sky could well step in to buy up any neglected
sports rights - at a somewhat lower price than paid by ITV Digital. BSkyB
would lose E 97.7 million in the sale of programming rights if ITV Digital
shuts down - and though it would benefit in subscribers over the longer
term - it may prefer to seek both.
The Independent Television Commission's licensing of The BBC mitigates
against the corporation as it could not run a Pay-TV service - yet moves
elsewhere in Europe to promote a free-to-air future for Digital Terrestrial
would lend themselves to BBC involvement, as would a 'public service'
salvation of the platform to aid the UK's move to digital services. Without
Digital Terrestrial, the government will not achieve its aim of switching
the whole country over to digital television by the year 2010. And the
BBC is launching several digital-only channels: CBBC; CBeebies; BBC4;
BBC Choice plus the existing BBC News 24 and BBC Parliament, all designed
to encourage digital take-up, hence it has a stake in the development
of the platform - and the existing set tops remaining in the market, along
with the new E162.8 (£100) box from Pace.
The BBC could temporarily provide a sustaining service for DTT on a short-term
basis, possibly in conjunction with BSkyB, while a long-term solution
is found.
Even with restructured bank balances - cable operators NTL and Telewest's
financing problems do not put them in the acquisition frame - unless a
very deep pocketed media industry investor like John Malone overcame management
resistance and took part in cable's expansion.
Kirch's financial collapse and Vivendi's criticism over management and
losses mean that neither are on the takeover trail right now, and Bertelsmann
is also ruled out by many commentators with its RTL owned channel 5 reported
to favour digital terrestrial as a free-to air service.
AOL Time Warner may want to boost its UK presence, but DTT may not be
the vehicle.
Although ITV Digital's owners Carlton and Granada could theoretically
acquire the business without its current debts, such a move would face
huge political hostility - led by the Football Association whose rage
would be fuelled by the expected financial collapse of some of their members.
The ITC must approve any deal that involves a change in ownership of ITV
Digital's licence.
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Sweden's Digital TV future
Sveriges Television (SVT), Sweden's public service broadcaster - and its new dynamic MD, Christina Jutterstroem, is now launching an 'alternative strategy' for the digitisation of Swedish television.
Plans for the fledgling Swedish DTT network are an affair of the heart for the present Labour-dominated government and its ardent left-wing Minister of Culture, Marita Ulvskog. But Jutterstroem and her board instead advocate a combination of DTT, satellite and cable to achieve a more rapid close-down of the analogue terrestrial network than was earlier proposed by the parliamentary digital committee, ie a close-down in 2005 instead of 2007, as the committee has recommended.
Jutterstroem and co now advocate an "investment strategy," including support of the ailing DTT network. After more than three years in operation the state-operated DTT network has, so far, only managed to attract some 100,000 subscribers.
The new concept from Jutterstroem is to introduce a 'value cheque', issued to all licence-paying households, a cheque that could be used as payment for a digital set-top box, regardless of its being satellite, cable of DTT.
"This would be a natural consequence of SVT being totally neutral when its comes to distribution," Jutterstroem comments. "Currently we are in all distribution systems, and intend to continue that way, ie we are also aiming at being represented in future broadband networks."
Again, Jutterstroem advocates the introduction of a simple, easy-to-use, 'people's STB', offering more services than the present analogue network, but not much more. A condition, however, is that this 'people's box' should contain a conditional access card. Should more features be included, Jutterstroem then rcommends that commercial operators could 'add to the value' of the value cheque.
Digital interactivity, a super-hot issue during the last few years in the Swedish media industry, has, according to SVT, turned out to be a failure. Interest from the public is, so far, very limited. To change this, Jutterstroem and her colleagues now advocate a common, open standard, along with recently recommended EU rules.
Simultaneously SVT's major rival, the privately owned TV4, is openly attacking the parliamentary digital committee, and therefore also the government, and its recommendations. The main target of the TV4 attack is the plans to impose a concession fee on TV4, similar to that of the analogue network, also for the DTT network.
"If this happens there would be very little incentive left for TV4 to further support of the DTT project," TV4 claims, referring to the situation in several other European countries.
TV4 is also highly critical of the plans to shut-down the analogue network as early as in 2007, pointing at the "financial consequences for the individual house-holds." The same arguments have recently been voiced by organisations like the Swedish Consumer Agency and the Swedish National Audit Office.
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Digital Interface against piracy
The two main satellite operators in the US, EchoStar and DirecTV, have agreed to support a next generation digital interface standard aiming at defeat piracy.
The High Definition Multimedia Interface (HDMI) working group has formed to define an uncompressed digital audiovisual interface for consumer electronics devices.
Electronics manufacturers, including Hitachi, Matsushita Electric, Philips, Silicon Image, Sony, Thomson multimedia and Toshiba are developing the interface for future products such as digital televisions, DVD players, set-top boxes and other digital A/V products.
The HDMI specification, which combines high-definition video and multi-channel audio into one digital interface, has been designed to prevent consumers from pirating digital movies off their satellite dish.
The Executive Vice President of DirecTV, David Baylor remarked that,"this is an important step toward delivering consumers a more robust selection of high-definition content and digital receiving devices."
Major studios are reluctant to provide digital content to satellite providers for fear of piracy,.
"We can't get the big movies to give us HDTV movies," said EchoStar spokesperson Marc Lumpkin is reported as saying by Sky Report. He added, "And we want their content." The company will include the standard in future set-top boxes, Lumpkin said. EchoStar has a high-definition recording device coming out later this year or early next year that may include the standard, he said.
The standard may be getting ahead of congressional action. Last month, Commerce Committee Chairman Fritz Hollings (DSC) introduced a bill that would require that the content, technology and consumer electronics industries work with consumer groups to set a digital media device standard to protect digital piracy.
Meanwhile, DirecTV and Showtime Networks said that from April 30, DirectTV will carry the East Coast SHO HDTV channel. This will be the third high-definition channel to be carried on the DirecTV service and will be available 24 hours a day on DirecTV channel 543.
DirecTV will broadcast the SHO HDTV channel from its satellite at the 110 degree West Longitude (WL) orbital slot location. To receive this new channel, consumers may purchase an HDTV set with a built-in DirecTV system receiver or a DirecTV-enabled HD set-top receiver and an multi-satellite dish with three LNBs. In addition, customers will also need to subscribe to one of DirecTV's programming packages plus the "Showtime Unlimited" package.
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EgyptSat to provide broadband
Broadband satellite solutions provider Hughes Network Systems Europe (HNS) is to offer high-speed broadband access via DirecWay to EgyptSat customers throughout the Middle East and Europe.
HNS' advanced communications systems are based on VSAT satellite technology and DirecWay, a two-way satellite broadband service. These networks transmit high-speed IP multimedia, data, video and voice, enabling businesses in Africa and the Middle East to improve operating efficiencies while offering a wide range of customer services. HNS has a more than 50 per cent share of the African VSAT market.
EgyptSat will be an authorised HNS agent and will offer high-speed Internet access to consumers and enterprises. In addition, EgyptSat will develop distance learning applications that will be offered over DirecWAY.
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Vivendi shareholders meet today
Vivendi Universal's annual shareholders general meeting today (Wednesday 24/4/02) is expected to be far from dull, with Chief Executive Jean-Marie Messier under pressure to explain losses, justify the sacking of Pierre Lescure, Chief of subsidiary Canal Plus, and update members on the lawsuit against alleged software piracy by Murdoch subsidiary software company NDS.
Minority shareholders' representative group ADAM has already submitted a list of written questions in advance calling on the media company's board to fulfill its obligations in monitoring management.
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NTL
execs sued |
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NTL execs sued
James Haber, an NTL investor, is the named plaintiff in a class action US lawsuit filed against NTL Chief Executive Barclay Knapp and other senior company executives by shareholders in UK cableco NTL who face potentially loosing their equity to bondholders. The law suit alleges that senior NTL executives misled investors over the true state of the indebted cable company.
Filed by Manhattan-based lawyers Milberg Weiss Bershad Hynes & Lerach on Friday, the complaint claims that Knapp and Chairman George Blumenthal, Chief Financial Officer John Gregg and Chief Operating Officer Stephen Carter, issued a series of materially false and misleading statements reports the Guardian newspaper.
The defendants were motivated to "conceal the true financial and operational condition of the company because they owned millions of options to purchase shares of company stock and sought to artificially inflate the price of NTL shares for long enough time as to allow them to capitalise on the exercise and sale of such options and stock," says the claim.
It is also alleged that NTL was not fully funded until 2003 despite statements to the contrary and, as a result of its massive debt burden the company was already out of cash by the end of 2001and unable to meet its debt obligations.
The class action covers any investor who bought shares between August 2000 and November 2001.
After last week's rescue package was announced Knapp said, "We have been working through night and day to ask forgiveness and fix this [debt] problem." NTL's shares have plummeted from a high of $136 in January 2000 and are now unsaleable.
Another allegation in the lawsuit is that the company distorted its rate reporting by failing to report "terminations and by continuing to bill customers for accounts which they had terminated, thereby creating the false impression that the company was retaining customers longer and that migrations were decreasing."
NTL is also alleged to have improperly delayed the writedown of billions of dollars of impaired assets, thereby artificially inflating the company's operating. Last month NTL reported fourth quarter net losses of $12.9 billion after writing off $11.1 billion of its assets.
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Simply TV acquires Phoenix TV
UK infomercial broadcaster Simply Television has acquired London-based producer and distributor Phoenix Television Ltd for an undisclosed sum to aid its original programming expansion plans. Phoenix Television, which has its own studio complex and editing facilities produces in London, produces and distributes television news and current affairs programming. Simply Television will move to the Phoenix premises at 150 Great Portland Street which will become a division of Simply Television.
Simply Television currently operates seven Shopping Channels shown 'Free To Air' on the Sky platform. These interest-based Shopping Channels include Simply Jewellery, Simply Music, Simply Holiday tv and Simply Health & Fitness.
The Pheonix acquisition will enable Simply Television to expand its television production offering and combine its 'Direct Response Television' on-air style, with Pheonix's more traditional editorial programming production.
Simply Television is currently negotiating with several Retailers for channels dedicated to 'Point Of Sale Television' - simultaneously broadcast throughout a store's branches and on air via satellite. Simply Television will offer retailers and brands a full service 'end to end' television channel as either a sales or marketing tool. It is planned that this latest acquisition will make the provision of such services even more comprehensive. Managing Director Henry Scott comments, "Right now, within weeks, we can put a retailer or brand on air for a test period starting for an all-in price of less than £250,000, including transmission and production. That's going to revolutionise DRTV and the television shopping sector over the next year or two."
Scott adds, "Simply Television is already the UK's largest broadcaster of Shopping Channels as well as being the most prolific producer of English Infomercials. Investing in our brand by creating a real point of difference means that our shooting requirement is increasing and the Phoenix studio and facilities will enable us both to get into live transmission, and to materially increase our production throughput. We're also interested in developing some of Phoenix' initiatives and innovations as they have a proven track record in the TV production arena. I intend that Simply Television will also very shortly be involved with creating, and working with editorial Channels requiring greater production facilities. Right now there are tremendous opportunities in this sector for a company that has low overheads - something close to my heart. We want to deliver both low cost facilities and production to retailers and manufacturers as well as continued low prices to our TV shopping customers."
Gerry O Reilly, founder of Phoenix, said, "Phoenix has become an established provider of programming, especially news, and is well set up to provide live transmission and production facilities. The company will be much more profitable however as part of a larger operation which can usefully share a combined overhead."
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Norman General Manager VH1
Christine Norman has been appointed Executive VP and General Manager of VH1. Judy McGrath, President of MTV Networks Music Group, which includes MTV, MTV2, VH1 and CMT announced the appointment to fill the vacancy left by departure of John Sykes in March. Sykes moved to Infinity Radio as chairman and CEO and McGrath was appointed to her current position. Norman, an 11-year veteran who was previously the Senior VP of marketing and on-air promotion at MTV, will assume the day-to-day operations of VH1 - marketing, business development and human resources - and its sister digital networks VH1 Classic, VH1 Soul, VH1 mega Hits and VH1 Uno.
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12 DOCSIS 1.1 Modems certified
Twelve more DOCSIS 1.1 high-speed cable modems were certified at the conclusion
of the third certification wave for DOCSIS 1.1 testing. The companies
receiving DOCSIS 1.1 certification status in the latest wave of testing
are Accton, Arris, Askey, Conexant, Quanta, Samsung, Scientific-Atlanta,
Tellabs, Terayon, Thomson, and Xrostech.
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Satellite/DSL combo in US
EchoStar Communications Corp in the US is combining its EchoStar DISH Network digital satellite television offering with DSL Internet access from EarthLink to provide a satellite television/Internet access package.
EchoStar will offer bundled service packages through DISH Network sales efforts and through DISH Network's US-wide network of retailers. Buyers of the bundled services package will get credits of up to $10 on monthly service charges for a package of EarthLink DSL Internet and DISH Network satellite television programming.
The EarthLink DSL service from DISH Network will begin this summer, following introduction of a next-generation satellite TV set-top box later this spring, combining DSL broadband and satellite TV for VOD.
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FCC delays Echostar review
The proposal by EchoStar Communications Corp to offer local-television channels in all 210 markets if the government approves the proposed takeover of Hughes Electronics Corp has caused the US comms regulator, the Federal Communications Commission to delayed its review of the deal until at least early June.
Further public comment and commission analysis is required - and even then delays could extend beyond the FCC's internal 180-day timetable according to the speed with which the companies fully comply with the commission's document requests.
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Vivenid/Thomson anti-piracy move
While the headlines concentrate on the sacking of Canal Plus head Lescure, and the prospects of Messier surviving as head of Vivendi Universal, and the court case against Murdoch subsidiary NDS, behind the scenes work goes on and the company has just agreed a deal with France's consumer electronics giant, Thomson Multimedia, to work together to develop anti-piracy technology.
The two French companies will focus on copy protection of broadcast, satellite television, broadband and video-on-demand services as well as products such as DVDs, Thomson and Vivendi will also cooperate in standards bodies and encourage other technology companies to adopt and implement interoperable standards-based content protecting digital works.
In the US the Video Watermarking (VWM) Group, which combines consumer-electronics companies Hitachi, Macrovision, NEC, Philips Electronics, Pioneer and Sony, has been promoting the introduction of an electronic 'watermark.' Unique code inserted into a video file would make it difficult to copy or play without permission from copyright holders.
Thomson and Vivendi initially intend to focus on DVD replication, then Internet distribution.
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ITV
Digital up for sake
(updated 23/4/02 10.30 am)
Nick Dargan
and Nick Edwards, joint administrators from accountancy firm Deloitte
& Touche, hav put the ITV Digital business up for a sale - though they
failed to make an announcement at 2.0 pm yesterday as anticipated - leaving
the League holding onto their prepared response to any announcement of
a sale - they then announced that it had 'not been possible to restructure
the cost base of ITV Digital despite having moved to halve daily operating
costs of nearly £1m a day by cutting some 900 jobs - half the company's
staff.
Formal talks with potential buyers are expected this week as ITV Digital
has effectively run out of cash - squeezing the last few days from what
remains. 'Six or seven' expressions of interest are reported to have been
made by buyers interested in the licence to operate the UK only digital
terrestrial television platform - though BSkyB has claimed it is not interested
and the cablecos have their own severe financial difficulties (see top
of page). The terrestrials - the BBC and Channel 5 remain prospects, though
it is not clear how the BBC would tackle Murdoch et al reviving the 'tax
supported commercial competitor' criticism. The actual name ITV Digital
is not for sale.
However the subscriber base, and thus value of ITV Digital, is falling
rapidly - by more than 20,000 people a week due to cancelled subscriptions
- and potential new subscribers are holding fire. The 1.26 million customers
base will evaporate quickly if the crisis is not resolved soon.
ITV Digital owes £179 million to the Football league under a three-year
deal. ITV Digital's parents Carlton and Granada are deemed liable by the
league which is threatening a £500 million lawsuit for breach of contract
if the issue is not resolved. ITV Digital and the Football League failed
to reach an agreement yesterday, though David Burns, League Chief Executive,
appeared on UK radio today (23/4/02) to still believe that it was only
the sports channel which Carlton and Granada wished to dispose of, and
that they would want to retain the digital platform for their own future
development - a view not shared by industry analysts who appear convinced
that an asset sale will take place.
The Independent on Sunday claimed that the League believes it has found
a loophole in the legal shell protecting ITV Digital's owners, Carlton
Communications PLC and Granada PLC. It will argue that ITV Digital made
its broadcast rights deal in partnership with ITV itself, jointly owned
by Carlton, Granada and SMG PLC and Ulster TV PLC, making all four jointly
and individually liable.
The Sunday Times reported that the League is willing to settle for just
the first of two £89 million payments - as long as it gets the TV rights
back.
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Liberty's
NTL bid rebuffed |
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Liberty's NTL bid rebuffed
It appears that a reported predatory proposal by John Malone's Liberty Media Corp in the US to buy a 30 per cent stake in UK cableco NTL's bonds, and thus gain control of the company, has met the same fate as earlier advances, with outright rejection - but it could get the support of creditor banks. NTL had announced a tentative debt-for equity deal to slash its $17 billion (E19 billion) of debt. Under the proposal NTL bondholders would get 100 per cent of NTL's UK and Irish assets in return for $10.6 billion (E11.9 billion) of bonds and some $500 million (E526 million) of new cash. Bondholders would also get 86 per cent of a group of NTL's less viable European assets.
Malone was reported to have sent a letter sent to NTL Corp Chief Executive Barclay Knapp late Wednesday (17/4/02) requesting company support to purchase $1.5 billion (E1.7 billion) of NTL bonds to give him a stake of as much as 30 per cent under an alternative restructuring plan. Such a share would make Liberty Media the largest single shareholder, providing the opportunity to seize management control.
The bid is reported to have also included a $500 million (E526 million) cash offer from Malone to take 100 per cent control of NTL's indebted Swiss subsidiary of Cablecom, for which NTL has breached its covenants, and which is currently seen as a potential obstacle to securing bank support for the bond swap deal.
Malone also has a stake in UK number two teleco Telewest Communications PLC, and is seen by many as the catalyst that could merge the two. But Malone's earlier moves to take an NTL share with this aim in mind were rebuffed by NTL bondholders and the early indications are that his current approach has also been rejected. The reason for this rejection is that Liberty's overall package values all of NTL below the $10.5 billion total enterprise value which forms the basis of NTL's bondholder-led restructure.
However, Liberty's terms reportedly do appeal to Cablecom's creditor banks, which have lent $2 billion (E2.1 billion) and face a potential write-off of several hundred million dollars under the current restructuring plan. Liberty Media cannot approach NTL's bondholders or its banks directly until the end of June following an agreement signed whilst doing due diligence on NTL, and the restrictions may block Liberty from buying NTL's bonds in the open market.
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Canal
Plus' NDS suit accelerates
While most of Canal Plus's current publicity is around the sacking of
former chief executive, Pierre Lescure, the company is also in the middle
of a second drama, facing News Corp subsidiary NDS in court over piracy
claims.
Canal Plus
issued a statement on Friday (19/4/02) confirming that the United States
District Court, Northern District of California, San Francisco Division
has agreed to accelerate the discovery process in the company's dispute
with software company NDS over alleged software piracy - breaking and
publicising the security codes of its smart cards.
The in the case has judge ordered that the discovery process should begin
immediately - something which had been sought by Canal Plus and opposed
by NDS.
"The judge's ruling allows Canal Plus to quickly move to preserve important
evidence in this case and we look forward to presenting our case in Court,"
says Canal Plus in its latest official comment on the case. (See archive).
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Singapore fibre deal agreed
Singapore's monopoly pay TV provider, Singapore Cable Vision (SCV) has come to an agreement with the dominant telco, Singapore Telecom (SingTel) over the lease of fibre optic lines leases.
The accord will allow the merger of SCV and Starhub, a rival to SingTel, according to reports from the island republic. SCV leases the lines to relay its services around Singapore from headends before they are distributed via hubs to customers. The new entity is expected to use the lines to offer voice services in order to create a bundled service offering to consumers in order to reduce churn.
SingTel's agreement was necessary in order to change the shareholding structure of SCV. Launched in 1995, SCV has 305,000 subscribers among the approximately 1.3 million households in Singapore. StarHub has a fixed and mobile business, and is also an ISP.
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S-A ships Explorer 8000 servers
Scientific-Atlanta has made the inaugural shipment of its new Explorer 8000 home entertainment servers for customer trials, a device it describes as the world's first complete personal entertainment platform for cable. Volume shipments are due in June.
From this week trial participants will be able to access personal video recording functionality via Scientific-Atlanta's Explorer 8000 home entertainment server and digital interactive network.
The Explorer 8000 home entertainment server offers 'next generation personal TV services' such as the ability to pause live TV, record one channel while watching another, record two channels and play back another simultaneously, and use picture-in-picture (PIP) on any consumer television set.
The Explorer 8000's PVR uses an 80-gigabyte hard drive capable of recording up to 50 hours of programming without a phone line. Future added home networking capabilities will allow sharing a wide range of entertainment related content throughout the home such as video, music and digital images.
Jim McDonald, Chairman, CEO and President of Scientific-Atlanta comments, "The Explorer 8000 home entertainment server, with its built-in hard drive, opens the door to exciting opportunities for both local media storage and the sharing of content throughout the home. It represents a powerful weapon for cable operators in their on-going fight against satellite competition."
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Scots' Sky soccer talks
Following the Scottish Premier League (SPL) scraping plans to launch its own TV channel, it is once again in negotiations with BSkyB.
Roger Mitchell, Chief Executive at SPL will be holding talks with BSkyB next week about a two-year TV rights deal.
But in the meantime the SPL will have to heal a deep split among its members. First the top two clubs, Rangers and Celtic, sought separate arrangements, then the other clubs rejected Rangers and Celtic's plans. In a bid to ensure the two clubs did not sign a separate deal with Sky they resigned from the league and effectively sent Rangers and Celtic off to play on their own - with the result that neither side's proposals can to get the required 11-1 majority.
The SPL was believed to have rejected an earlier $67.9 million, (E76 million) three-year bid from BSkyB for a renewal of its current exclusive live rights contract.
The SPL's only current televised coverage scheduled for next season is a highlights package for free-to-air television proposed by BBC Scotland.
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Belgian
immigrant channel supported
Flemish Equal Opportunities Minister Mieke Vogels says he supports a proposal
that the Flemish government finances the launch of a TV channel for immigrants
in Belgium - based in Vlaanderen.
Johan Op de Beeck, Director of Kanaal Z, had been seeking government subsidies
to establish the channel.
Beeck was reportedly inspired by a similar project in Madrid. The channel
would provide relevant information and a continuous repeat of the same
news broadcast
Dutch would be used, potentially with subtitles in English, Arabic or
Turkish.
Recent research shows that immigrants do not watch Flemish TV due to both
language and cultural barriers hence the new channel would be a way to
ensure the immigrant community is better informed.
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Vivendi 'raider' swoops
Vincent Bollore, described in the FT as 'France's foremost corporate raider' is reported to have begun building a stake in Vivendi Universal, buying a 0.5 per cent stake last week at a share price of around E37 to E38.
Bollore reputedly has E1 billion to spend, enough to acquire about 2.4 per cent of Vivendi's capital, enabling him to pressure the E19 billion indebted media group to speed up divestments. On Thursday (18/4/02) Vivendi concluded the E1.2 billion sale of its healthcare and business publishing assets.
The market reaction to Messier's earlier consolidation of power via the sacking of subsidiary Canal Plus chief Pierre Lescure has been more favourable than that of the staff and public - who have protested loudly including on screen. The company's stock rose for four consecutive days, up 13 per cent to E40.05.
Messier has emphasised, "The departure of Pierre Lescure as chairman of Canal Plus Group is not because of personal reasons. The decision was taken purely on the basis of business considerations ... as Vivendi Universal's role is not to continue to bankroll Canal Plus indefinitely, vigorous strategic and operational measures need to be taken." However, in reaction to mounting criticism, Messier told regulator the CSA it would uphold all its commitments and the channel would keep its editorial freedom. Last year the channel suffered a $439 million loss whereas Vivendi Universal's music and film divisions had a successful year.
A board meeting of Canal Plus directors on Wednesday supported Messier's decision in a 3-2 vote. Jorge Semprun, a writer, and Canal Plus union representative Philippe Gildas opposed the move with Semprun saying he would step down as vice president of the board if Lescure left.
Messier has also suggested that Canal Plus' survival would be threatened if it were not part of Vivendi, a future proposed by some analysts.
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On Demand's triple play
UK-based ON Demand Group has formed a joint venture with broadband technology company Tripleplay Services Limited to provide technical and implementation support for ON Demand's interactive television solutions.
Tripleplay Services Limited is a broadband communications industry specialist handling the design and delivery of complex broadband solutions around Video on Demand, interactive TV and Voice over IP.
The deal, signed by On Demand's Chairman Andy Birchall and Tripleplay's joint Managing Director Andrew Bolton, will combine On Demand's content aggregation and management, with full technological backup supplying the technology to integrate and develop VOD. On Demand will provide a full service offering to cable and telecoms partners and clients throughout Europe.
On Demand's Chief Technology Officer, Simon McGrath said, "It has become increasingly apparent that companies interested in developing or investing in broadband and other new media products are looking for one-stop implementation solutions. This alliance makes enormous sense as it will allow the On Demand Group to provide a framework encompassing our traditional marketing and content aggregation skills with a fantastic technical product pioneered exclusively via our new relationship with Tripleplay."
Bolton commented, "Customers are now looking for a rapid return on their technology investments. Rather than take on the risk and expense of implementing projects themselves, they are looking for experienced business partners who can share the load and provide the resources required to deliver new, appealing and profitable broadband services. The combination of Tripleplay's technical and delivery capabilities coupled with the ON Demand Group's content aggregation experience provides the perfect formula for communication companies wishing to deploy 'On Demand' services in this way."
ON Demand launched and manages Front Row Television, cable near-video-on-demand (NVOD) services. Front Row's customer base has increased twelve times since its launch three years ago, from 300,000 to more than 3,600,000 and it is now the only UK NVOD operator with movies from every major Hollywood studio.
On Demand has also launched Mirador, a Spanish pay-per-view service, into 11 Spanish cable companies.
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