NEWS Monday 29th April-Monday 6th May 2002

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Friday 3rd May 2002

Telewest cuts 1,500 jobs
Finnish DTT controversy
Prebble quits ITV
World Cup PVR from TPS
Astra delivers German Internet
HD iTV for Seol
UPC withholds interest
Teleste in UK surveillance win
MBN-CNBC Korean Launch
Production Show/Mediacast clash

Telewest cuts 1,500 jobs

UK number two cableco Telewest is to cut 1,500 jobs mainly from its networks division, reducing its workforce to 9,000 in bid to save up to £50 million (E81 million) per year. Further measures are planned to cut the company's E8.54 billion debt. These include further cuts in capital expenditure, which will remain less than E810 million- up to E890 million had been budgeted - and its consumer and business divisions are merging into a single operating unit.

Telewest has recently found it difficult to raise finance from the banks, and its shares have fallen 83 per cent since the new year in the expectation of a debt-for-equity swap along the lines of that at NTL whose restructuring its E19 billion debt saw shareholders loose out as it eliminated E12 billion of its E19 billion debt. John Malone, who owns 25 per cent of Telewest, would be expected to be a major beneficiary in any debt-for-equity swap and boost his European cable ambitions. Telewest shares saw a modest 3.6 per cent recovery this week, from last month's low of 8p to 10-3/4p.

In a bid to reassure the markets that no restructure is planned, Telewest's Finance Director Charles Burdick, confirmed that the company has enough cash to last for at least 15 months even without further lending. Since March Telewest has raised about E78 million in cash of the E537 million it estimates it needs to reach break-even at the operating level. But the latest job cuts are designed to ensure targets are met to encourage further lending.

Telewest Chief Executive Adam Singer commented, "The steps we have taken are aimed at helping stabilise our financial future...I believe they will enable Telewest to operate more efficiently going forward. But as would be expected given the current state of the capital markets, the company continues to explore options to address its funding requirements."

Telewest's content division, Flextech, has suffered a lesser blow, having been hit by ITV Digital's collapse to the tune of some E9.7 million a year which was paid for its joint venture channels with BBC Worldwide. Singer has refused to rule out selling Flextech as a revenue generating option. In a move to recoup the ITV Digital loss, the company has offered half-price installation to about 200,000 ITV Digital users living in its franchises. NTL has made a similar move (see below)

*Telewest first-quarter results are in line with analysts expectations with ebitda of E147 million for the three months to the end of March, a 34 per cent rise on last year's E110 million. Pre-tax losses were E270 million, down on last year's E337 million loss. Revenues were E541 million, up from E520 million in the same period last year.

A bright prospect for the future was broadband subscriptions, up to 148,000 at the end of the quarter from 107,000 two months ago, but still relatively low in the UK hence offering further growth potential.

Monthly household revenue rose slightly, by 30p (E0.5) from the previous quarter to £41.97 (E67).

*NTL has also reduced the price of installing a cable line by 50 per cent - to £37.50 (E61) - and is targeting ex-ITV digital subscribers in its franchise areas by advertising in the national press asking, "If ITV Digital is history, what's the future?"

The half-price installation offer for a year-long subscription runs out at the end of the month.
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Prebble quits ITV

The UK ITV chief, Stuart Prebble (51), is to quit following the collapse of subsidiary ITV Digital which has cost the ITV companies E1.3 billion and could eventually cost up to E2.4 billion.

Prebble was formerly the Chief Executive of ONdigital which went on to be relaunched as ITV Digital. In April last year he replaced Richard Eyre and became overall Chief Executive of ITV with responsibility for ITV Digital, ITV's channels and ITV.com. The company described his role as bringing together the various strands of the business, but the underlying role was widely seen as overseeing the practicalities a merger between Granada and Carlton Communications.

Prebble said "I came back to the ITV Network Centre a year ago to try to bring together ITV's channels and platform businesses. Unfortunately that role is now not available, and this therefore seems like an excellent moment to move on."

Two of ITV's most senior broadcasting executives are now to become joint managing directors; Mick Desmond, Managing Director of Granada Broadcasting & Enterprises and Clive Jones, the Chief Executive of Carlton Channels. This move is seen as also in line with the aim of creating a single ITV company.

An Evening Standard newspaper report quoted sources describing the move as an attempt to deflect blame from Carlton Chairman Michael Green and his Chief Executive Gerry Murphy and from Granada's Chairman Charles Allen and his Chief Executive Steve Morrison.
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Production Show/Mediacast clash

The Production Show, which takes place in National Hall, Olympia from May 21st - 23rd 2002, will be covering production, post-production, broadcast, new media, audio and video technology. However, while not addressing exactly the same market due to the clear Production focus, it could suffer from an overlap in audience from the larger Mediacast being held in Docklands on the same dates.

In preparation for the show the organisers have released news of new launches at the event. "The Production Show provides a valuable UK launch pad for brand new products and technologies, as well as showing products that have just been launched at NAB. We are excited about the variation of this year's exhibitors, which range from high-end post-production technology developers to shooting locations from around the world. " comments Toby Wand, Event Director, The Production Show.

Exhibitor launches at the show include:

Advanced Production News launching 'Radio Essentials' which it says is a PR Guide to every single radio programme on every single station all over Britain.

AKM is launching five new CD releases including the first of its Professional Sound Effect Range.

Autograph Sales will launch its Q700 Radio Communications systems and show the recently released i-stations for the Matrix system.

Bal Broadcast is launching its stand alone digital extractor which works with the Sony J3 Unit.

DK Audio is launching its new input module for the MSD600M(MSD600-Input-SDI) which enables the audio to be de-embedded from an SDI input and monitored.

Edifis is launching its StingKey for broadcast presentation allowing the user to perform integrated transition wipes with key and fill in one box. Edifis will also be launching the Assembler, which manages EDL-based auto-conforming from an Edifis system. Conforming in faster than real time, Assembler takes existing media from an Edifis system and creates a 'virtual on-line'. This on-line can then be made available to other suites or tools within a facility, allowing a more productive workflow. Clients in a Telecine suite can view material 'in context' during a grading session.

Eve Trakway will be launching its new Cable Management System. The cable and hose protection system protects electrical cables and hose lines up to 3.25 inches in diameter from damage and abuse. At the same time also ensuring a method of safe passage for vehicular and pedestrian traffic.

FOCAL International, the non-profit trade organisation of the commercial film and video library industry, has created a new website to help programme makers and others seeking content to interact more with 100+ member film, video and photographic libraries and the research community www.focalint.org.

Front Niche is launching what it says is the world's first Pixel to Pixel TFT lCD from Vultrix. Widescreen. The TFT screen is 15.3", 16 x9, and can be desk or back mounted. Using SDI ( Serial Digital Interface) the picture will be viewed entirely in the digital domain, for better picture quality and higher image definition.

Film New Zealand is launching a new website www.filmnz.co.nz showing locations for TVCS as well as production infrastructure for Film and TV.

Flat Displays, along with Alis technology is launching its new FD42 plasma display giving 1024 x 1024 resolution. New TFT's are also to be launched.

Hamlet, specialists in signal analysis and test and measurement equipment will be displaying its Advanced Monitoring Unit (AMU), a combination unit consisting of a Monitor Scope or LCD Scope with high quality monitor speakers.

The Liverpool Film Studio, the first Merseyside based film studio facility with supporting production offices will be at the show, in preparation for its launch on 11th June 2002.

Network UK, distributors to systems integrators is launching the company at The Production Show and will be showing its Network Viking Routers and Network Flashlinks Optronix. Network UK is a new company, set up in 2002 and this will be their first exhibition.

Panasonic will be offering visitors the chance to win two tickets to the British grand Prix, courtesy of Panasonic Toyota F1 Racing Team.

Skillset is launching a new national telephone helpline. The new telephone helpline has been established to offer careers advice for all those wanting to either get into the media industry or improve their career opportunities if they already work in the industry. The helpline ¯ 08080 300 900 - will offer media careers information to all those in the UKbetween the ages of 16 and 65.

Top Teks, a major supplier of digital broadcast cameras is launching its new UK Importer for Camplex.

The Knowledge is launching the 2002 edition, with over 17,500 entries (1,000 more than in 2001) and new additions to the 'Know-How' production guidelines section.

Vizrt is launching Viz-fx, in association with Virtual Video Solutions and Joe Dunton Cameras. Viz-fx will provide real-time graphics interaction with actors in visual effects shots giving directors and cinematographers a real-time graphics preview facility while in the studio or on location.
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DTT box give-away
UPC in $200 m lawsuit
Vivendi deals rebound
Sony buys RealNetworks share
DirecTV 5 to launch
Bets off on racing deal
Sex tech sells
Teleste MD quits

DTT box give-away

In the wake of ITV Digital's collapse, when screens went blank on its pay TV services at 7.0 am yesterday (1/5/02), the UK government is being urged to give away digital terrestrial set-top boxes to salvage its goal of switching off the analogue TV signal by 2010.

"We believe that consideration should now be given to the government conducting analyses of the costs and benefits, and market impact, of providing free digital set-top boxes to enable analogue switch-off to be achieved," said a report by Labour MP Gerald Kaufman's media select committee on the new Communications Bill. The bill is due to be published in draft form next week, and scheduled to become law next summer.

The report also called upon the government to, "accept responsibility" for ensuring that free to air channels remain available via DTT.

In contrast, the government's Culture Secretary, Tessa Jowell had earlier said the government would not intervene in the DTT issue. She also hoped that the re-tendering process by the UK's TV regulator, the ITC, would result in, "A group of public service broadcasters and two or three commercial operators coming together to offer a much more realistic package than ITV Digital did in the first place," and also suggested that the 2010 analogue switch-off date could still be met.

Opposition shadow culture secretary, Tim Yeo called on the government to publish its plans for cross-media ownership laws as soon as possible, to encourage possible bidders for the licence to come forward.

The the ITC expects to announce any new bidders by June 12. Any new applicants for the DTT licences (see archive 1/5/02) are expected to demand a higher signal power to ensure reliability of coverage.

Ofcom remit

Another of Kaufman's select committee recommenations was that the approval of new BBC services should be the subject of published statutory advice from new combined communications regulator Ofcom to ministers.

Ofcom will be created under the bill to combine the ITC, the radio authority, the broadcasting standards commission, the radiocommunications agency and the telecoms regulator, Oftel, in a single organisation.

At the ITC (Independent Television Commission) Chief Executive Patricia Hodgeson has also been seeking to influence the forthcoming communications bill, calling on the government to guarantee investment in original programming for Public Service Broadcasting, especially independent television news.

Hodgson also called for Ofcom to be given the power to ensure broadcasters such as ITV and Channel 5 fulfil the terms of their licences and deliver high-quality programming.

BBC role

It is the BBC which is expected to provide the nucleus of any attempts to form a coalition of free to air DTT players. With the licence being split into three, more than one company could take a share of the DTT platform. The BBC is already reported to have put in a bid to buy ITV Digital's electronic programme guide software.

The BBC's Director General, Greg Dyke, and other senior executives are also accelerating plans to launch a multimedia (print, TV, radio and online) marketing campaign to reassure former ITV Digital customers that they can still receive the BBC's free digital services such as BBC Choice and BBC4 via their set-top boxes. Viewers will also be able to watch Channel 4 pay TV services, FilmFour and E4, until May 24, as they are broadcast on part of the digital terrestrial multiplex owned by Channel 4.

ITV Sport channel continued as one of the remaining free-to-air channels ¯ and not just for digital terrestrial viewers, but NTL cable viewers too.

The Nationwide Football League will now get many extra viewers for their climactic end-of-season play-off games ¯ but no money. In addition to tonight's and tomorrow night's return leg division one matches, the division three play-off final will be shown on May 6 and the division two final on May 11, then the division one play-off on May 12 will be screened on ITV1.

"Given that the pay TV system has been switched off on digital terrestrial, we have to make it free to air between now and the play-offs. We will assess the situation after that," an ITV spokeswoman was quoted in the Guardian newspaper as saying.

While BSkyB is forecast to be the main beneficiary of ITV Digital's demise, revised estimates are no longer talking about 1.2 million subscribers, but 300,000 of the 700,000 remaining, with another 300,000 forecast to opt for Telewest or NTL cable services. Any new bidder may be able to buy the ITV Digital subscriber list, but that is far from assuring that any former subscribers would choose the same technology again.

A new liquidator will now be sought by creditors, who will want to ensure that full market value is paid for any assets transferred within the ITV group.
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Vivendi deals rebound

French media conglomerate Vivendi Universal Chief Executive Jean-Marie Messier came under more pressure this week following shares hitting four-year lows, falling 2.8 per cent to E35.39 - having dipped as low as E34.

The fall followed revelations in La Tribune newspaper that Vivendi sold put options last year on tens of millions of its own shares to raise money to pay for stock options it awarded executives. Vivendi committed to buy back shares from the option holders at prices well above Vivendi's current share price, an off-balance-sheet liability that could cost it hundreds of millions of euros, and has further damaged Messier's deal-making credibility.

Its 42.5 per cent share price fall - an 1E7bn write-down since the beginning of the year - makes Vivendi one the worst-performing large-capitalisation stocks in Europe.

Vivendi has 18 million put options outstanding that the company sold to undisclosed parties for E12 each and that carry an exercise price of E69. The impact on the company's balance sheet was estimated at E50 million to E1.2 billion. At its current share price of around E35, the buyback obligation could raise Vivendi's E 31.3 billion debt by E600 million - and more if the share price falls further.

Vivendi says the liability was partially disclosed in the annual report Vivendi released two weeks ago, but the company is accused of having glossed over the issue.
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Wednesday 1st May 2002

ITV Digital closes, assets up for grabs

Yesterday (Tuesday 30/4/2) at 5.20 pm ITV Digital's administrator Deloitte & Touche announced that the UK's Digital Terrestrial platform would cease broadcasting Pay TV channels at midnight last night, as it could no longer afford to keep the operation going without a buyer, effectively closing the operation.

Some 1,500 staff, including 1300 call centre staff, have lost their jobs and up 1.2 million subscribers (or possibly just 750,000 remaining depending on whose figures are used) loose their a pay TV service. Following the loss of some 25 pay services, including Sky Sports, MTV, Discovery, UK Gold and Sky Movies, which were scheduled to cease transmission at midnight last night, the UK regulator, the independent television commission (ITC), is now expected to revoke the company's broadcast licences, with the administrators commenting, "Arrangements have now been made for the surrender of the multiplex licences to the ITC. We understand the ITC will issue invitations to re-tender those licences on a more flexible basis tomorrow (1/5/02)."

This will leave digital terrestrial viewers with just 14 free-to-air channels, including BBC Choice, BBC4 and CBBC plus the five terrestrial channels, which will continue to be broadcast. The company will now be broken up with its assets sold to pay off creditors.

The new licences will be offered on a more flexible basis than those awarded to Carlton and Granada, with applicants, "Able to apply for any combination of the three (digital multiplex) licences on offer or propose any mixture of free-to-air, or pay-TV services and interactive, or data services," according to an ITC statement.

The platform's parents Granada and Carlton Communications, have seen their £800 million investment fail to create a competitor to BSkyB, and perhaps permanently sour their own relationship with the country's football authorities to whom ITV Digital owed £178.5 million, precipitating the final crisis. Now the Football League is expected to sue Granada and Carlton Communications for the £178.5m outstanding from the £315m three year contract for Nationwide League broadcast rights.

Sky had been supplying its channels for free for the past few days in the hope of a credible buyer appearing, but it decided that it was no longer prepared to do so - and it was suggested that telco provider BT was about to pull the plug too. Other companies such as MTV had been willing to make their programming available free for a further month.

Administrators, Deloitte & Touche had reported that they consider two of the potential 60 bidders as serious contenders to buy ITV Digital whole - but even serious potential buyers were more likely to wait for ITV Digital to be put into liquidation, then buy the assets without the debts.

Sky is under investigation by the Office of Fair Trading for abusing its dominant position in the pay-TV market, with a preliminary finding that it over-charged competitors for its content, thus this move which helped finally bring down a competitor could increase scrutiny of its own operations. The same competition concerns mitigate against Sky as a buyer - notwithstanding Sky's own statements that it has no interest in the company.

ITV Digital used to buy more than E100 million worth of Sky programming per year, but its 1.26 million former subscribers are now up for grabs - with Sky forecast to be the main beneficiary - though many may be lost to Digital TV entirely.

Among the loosers are pay-TV channels FilmFour, MTV and Nickleodeon with research from Starcom Motive using Barb figures showing FilmFour being particularly hit - in February 29.2 per cent of its viewers watched via ITV Digital. Also, 10.5 per cent of Viacom's MTV viewers and 8.7 per cent of Nickleodeon viewers watch on ITV Digital. And the loss of 1.2 million pay-TV homes would obviously hit all pay-TV channels, but especially those dependent on advertising. FilmFour says its revenue is primarily subscription rather than advertising revenues and just 15 per cent of its subscribers come from ITV Digital.

Given ITV Digital's failure, BT chairman Sir Christopher Bland and former Channel 5 boss David Elstein had, the previous day, entirely dismissed the UK government's plans for analogue switch off in 2010. A combination of political interference, poor technology, the need to convert old televisions to digital and the huge costs involved are claimed to have dealt a fatal blow to DTT in the UK.

In a Guardian newspaper report Elstein estimated that it could take 27 years and cost £3.3 billion (E5.33 billion) to complete the task of simply checking that every household in the country had the right technology so that the analogue signal could be switched off.

Even the purpose of pursuing switch off was dismissed, with Elstein saying, "There are no obvious spectrum shortages or willing buyers," adding that DTT had also failed in Spain and Sweden.
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Microsoft renews set top ambitions

When you are sitting on $40 billion (E44 billion) in cash as Microsoft is, its inevitable that there will be rumours about what you might do with it - because the chances are, you will be doing something with it.

Now, in addition to Microsoft kicking the flat tyres on ITV digital - an interesting prospect on its own - it is also reported to be considering new deals with UK cableco NTL in which it once had a significant share - which would have be lost in the current restructure had it not quit early, and in Germany's indebted and collapsing KirchGruppe.

Any of these moves would be a revival of Microsoft's earlier failed strategic investments in television operators that it was expected would then use its set-top box iTV software - but the operators wanted a cheaper low end fix that was available immediately. Microsoft had put some $5 billion (E5.5 billion) in AT&T and about a $500 million (E550 million) into UPC, and despite some backtracking, still has around $5 billion (E5.5 billion)invested internationally in cable TV.

The company now has new low-end technology - launching at the National Cable and Telecommunications Association show in New Orleans, USA. But that may not be its real answer to the problem of deployment. Another rumour - with no apparent substance other than many people putting the same two and two together - is that Microsoft might want to buy market share directly - and technology along with it, by purchasing Open TV which leads the market with about 25 million set-top boxes deployed world-wide.
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NTL restructuring hitches

UK cableco NTL was expected to have won its bank lenders' support on two key elements of its restructuring by the end of yesterday (30/4/02) to ensure its $10.6 billion (E11.7 billion) debt rescue plan progressed.

The offer to swap $10.6 billion (E11.7 billion) of its bonds for new equity is essential to stave off a full bankruptcy. There have been predictions that NTL could sign such a banking deal within the next week.

Last night saw the end of a 30-day 'grace' period from NTL's April 1 failure to pay $97 million (E108 million) in bond interest, after which enough bondholders could combine to force NTL to file an early Chapter 11.

This is unlikely because funds which hold a majority of NTL's bonds support the operator's aim to file Chapter 11 only with the consent of its creditors including banks - but that consent is urgently required.

Separately, NTL had until last night to re-open credit lines to its Swiss subsidiary Cablecom to avoid Swiss insolvency proceedings as it had breached convenants on its $2 billion (E2.2 billion) of loans. This too could hit NTL's Chapter 11 timetable and overall debt restructuring plan. Short term finance is not seen as a problem, with a year's credit in place, but the longer term is less clear. Bondholders do not want to put any new cash in, but without it Cablecom could fail and the banks loose several hundred million dollars.

Cablecom is be grouped with NTL's other European assets into a new company with at least $100 million (E110 million) of funding under the restructure plan and France Telecom, already the biggest looser under the restructure, would put a further $25 million (E28 million).
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Due dilligence underway at Kirch

Germany Kirch Gruppe's biggest subsidiary KirchMedia, whose minority shareholders offered to inject E800 million into the company, have began diligence at its headquarters near Munich on Monday - seeking to avoid the problem of hidden liabilities which hit earlier rescue plans a month ago.

"It should take four to six weeks for the capital increase to be agreed, barring any nasty surprise," one of the investors was quoted in the local press as saying.

Wolfgang van Betteray, who took over KirchMedia's management after its insolvency filing earlier this month, and Michael Jaffe, the court-appointed administrator, are expected to appoint an investment bank as adviser this week. UBS Warburg and Goldman Sachs are beleived to be interested in the mandate.

KirchMedia's minority shareholders' main target is the profit making ProSiebenSAT.1, a 52.5 per cent-owned free-TV subsidiary of Kirch. ProSiebenSAT.1 has a 30 per cent share of the German free-TV market. This week the company reported a net profit of E5.7 million for the first quarter, 65 per cent down on the previous year's level due to the weak advertising market.

ProSiebenSAT.1 Chief Executive, Urs Rohner said he did not expect recovery before the fourth quarter but had taken measures to ensure flat profits this year compared with 2001.
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iTV Gambling White Paper issued

Wireless interactive television technology TVcompass has published a White Paper in association with GamCare, the charity that promotes social responsibility in gambling, titled 'Design Guidelines for Interactive Television Gambling'.

The objective of the White Paper is to promote social responsibility in the interactive gambling industry.

According to the Gambling Behaviour in Britain Prevalence Survey 2000, 72 per cent of the population over 16 gamble, or about 33 million people. Whilst for the majority of players it remains an occasional social activity, some find that it escalates out of control.

Bringing gambling to a TV set in the home carries with it a special social responsibility. Tvcompass' intention in issuing these guidelines is to make available best practice guidelines, so that all vendors can act responsibly.

TVcompass says all its products adhere to these guidelines.

The White Paper aims to provide design guidelines for interactive TV gambling. By following these guidelines vendors can demonstrate that they take seriously their social responsibility in this burgeoning new market.

Stephen Voller, CEO of TVcompass and author of the White Paper, said, "This White Paper was produced as guidance for our own engineers. We are taking the unusual step of putting this information in the public domain because we want all technology vendors involved with interactive gambling to act responsibly."

Paul Bellringer, Director GamCare said, "We welcome this initiative from TVcompass. Ahead of any new legislation, it is important that the new technologies take into account responsible gambling guidelines at the
design stage."
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EuroNews on Nilesat

EuroNews and Nilesat have concluded an agreement for digital, free to air satellite distribution of the European news channel on Nilesat 101.

Nilesat 101, 7 degrees West, provides full coverage on the Arab and Middle Eastern countries. Launched in June 1998, Nilesat offers more than 150 TV and 35 audio channels including a wide variety of Egyptian, other Arabic and international channels.

The French and the English versions of EuroNews are now available to more than 500,000 homes equipped with a digital receiver.
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Nextream, Thales, Thomson wireless launch

Thales, Thomson multimedia and Nextream (a joint venture between Alcatel and Thomson multimedia dedicated to interactive video networks) have formed a partnership called WIMUS (Wireless Multimedia System), to be jointly owned by Thales and Thomson.

WIMUS will be dedicated to developing and marketing what it says is the first integrated very high-speed broadband wireless access solutions, to provide new multimedia services to business and residential customers. The venture will draw on Nextream's experience in content processing and transmission, Thales' expertise in microwave base stations and receivers, and Thomson's broadband access technologies and products.

The commercial launch of the solutions developed by WIMUS is scheduled for autumn 2003. They will be priced to compete with current multi-channel satellite reception equipment and will offer subscribers very high-speed interactive multimedia services.

The deployment of the WIMUS offering is intended to speed the development of multimedia via the Internet in both broadcast and interactive modes by facilitating access to an extensive array of new services. WIMUS solutions will consist of very compact base stations distributing bi-directional waveforms supporting images and Internet access within a two or three km radius, in compliance with the DAVIC standard.

Subscribers will have an external receiver, a small 15-centimeter cylinder placed on their television antenna mast and connected to the television set-top decoder and computer by standard cable.

Services delivered via the WIMUS solutions will include conventional television, video-on-demand services (VOD and NVOD), and interactive television, as well as interactive multimedia services such as distance learning, telemedicine, teledesign and online shopping. Users will have very-high-speed return paths via the Internet for all of these programs.

Back in 1997 Thomson multimedia and Thales set up a consortium dedicated to research programs with CEGETEL. With help from the French Ministry of Industry, a first technical demonstrator was built at the Thales Broadcast & Multimedia site in Conflans-Sainte-Honorine. Then, within the framework of the National Telecommunications Research Network (RNRT), the same consortium, expanded to include IRCOM, among others, launched a service demonstrator at the Limoges high-tech industrial park. A similar project is currently being prepared for the metropolitan area of Brest.

In addition, the European Conference of Postal and Telecommunications Administrations (CEPT) has already allocated 3 GHz in the 40 GHz range for broadband wireless applications.

Olivier Lafaye, General Manager of Innovation Projects at Thomson, "This partnership will deliver a unique offering of unmatched quality that will eliminate the bottleneck in the last mile between the network head end and the subscriber to allow for optimum deployment. This is perfectly in line with Thomson's strategy of providing global end to end solutions for program broadcasting and multimedia solutions."

"The WIMUS project is perfectly in line with Nextream's strategy of providing video and multimedia services for all types of networks for an ever increasing number of users. After satellite, cable, broadcast networks and most recently ADSL, Nextream is thus in a position to increase its offer with WIMUS", added Bertrand Mabille, CEO of Nextream.

"WIMUS will draw on the expertise of the Thales Defence and IT&S business areas, and in particular on the experience and know-how of Thales Communications in the area of radio technologies, to bring future commercial customers access to these advanced technologies. The same technologies will then be quickly available to develop new high value-added military applications. This is a perfect illustration of the benefit of dual technologies used throughout the Thales Group," explained Francois Magne, Deputy Director of Thales Research & Technology.
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Sky News in APTN deal

Sky News says its pictures will now be used by nearly every national broadcaster in the world after a distribution deal with leading TV news agency, Associated Press Television News (APTN.)

The three-year contract will make live and edited video from satellite channel available to 500 news broadcasters supplied by APTN around the world. The London-based news agency provides TV companies with news, sport and entertainment video via a permanent international satellite network, using material from its 100 camera crews around the world and from selected broadcasters.

Britain's Royal Television Society (RTS) awarded APTN a special commendation this year for the coverage it provided of the World Trade Centre attack on September 11th and Sky News was named News Channel of the Year at the same ceremony. This month (April) it also won a British Film and Television Academy award (BAFTA) for its September 11th coverage and was recently commended by Britain's Independent Television Commission for "the most comprehensive coverage" of the terrorist attacks on America.

Ian Ritchie, Chief Executive of APTN, said, "Sky News has come of age and is repeatedly at the cutting edge of UK and international coverage. We believe our customers will benefit greatly from our use of Sky material, particularly in a world where there is an ever-increasing demand for live, breaking news."

Nick Pollard, Head of Sky News, said, "I am delighted that such a respected news agency as APTN has chosen to distribute Sky News' material as a main source of breaking news coverage. Sky has spent the best part of a decade and a half providing high quality news, and this deal underlines Sky News' importance as a global newsgathering force."
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Video Arts/Kingston alliance

Video Arts has formed a strategic alliance with satellite-based broadband provider Kingston inmedia to evaluate satellite broadband technology use in the delivery of e-learning.

Jeet Khaira, CEO, Video Arts said, "Broadband and the benefits it will bring will revolutionise e-learning for all businesses whatever their structure. We intend to be at the cutting edge and push the boundaries of e-learning to its limit. Our alliance with Kingston inmedia is part of Video Arts' strategy to realise this. We are looking ahead to ensure that we deliver inspirational e-learning to all our customers, wherever they may be."

Nick Thompson, Managing Director, Kingston inmedia said, "The alliance of Kingston inmedia's market leading storage, management and distribution expertise with Video Arts e-learning expertise offers organisations the fully-featured, end-to-end learning infrastructure they have been looking for. We are currently seeing e-learning taking-off in a big way, and are excited to be working with Video Arts to create the groundbreaking e-learning solutions that enterprises are increasingly demanding. Together we will enable them to develop a more powerful and convenient method of training personnel, whilst ensuring an easy transition from their existing training procedures."

Jeet adds, "Video Arts will be announcing further developments later in the year. This is one stage of a number of developments which will further position Video Arts as number one provider of all e-learning solutions."
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BBC/Beeb consolidation

The BBC's Beeb Ventures are to be wound up with its main sites being transferred to the BBC's commercial arm, BBC Worldwide along with Beeb.net, the company's ISP business.

"Websites including those relating to Radio Times and Top Gear will be run by Worldwide's magazine business. A number of other magazine-related websites, for example Top of the Pops, will no longer be transactional and will operate as marketing sites for the relevant magazine," said the corporation in a statement.
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Tuesday 30th April 2002

Vivendi AGM pirated

The votes at last weeks' AGM of French media giant Vivendi Universal revealed a number of discrepancies.

They were particularly apparent when a number of large shareholders' votes against a motion were displayed as abstentions. Jean-Marie Messier stated that all of the resolutions that were adopted would in any case have been adopted, albeit with a slightly smaller majority. Vivendi stated that it would file a legal complaint against the piracy of the electronic voting system.

A new AGM was to be convoked following the rejection of two motions concerning the attribution of stock options to staff and a share issue of E3 billion.

The new AGM is set for June 3. Its role is solely to put all the resolutions to the vote, enabling shareholders to express their view.
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Possible salvation for Premiere

Premiere, the loss-making pay-TV arm of Germany's Kirch Gruppe, could avoid imminent bankruptcy if a debt-for-equity deal from a consortium of the main Hollywood studios is agreed within the next 10 days.

The discussions yesterday (29/4/02) involved Rupert Murdoch's British Sky Broadcasting and Bertelsmann, Germany's biggest media group.

The studios planned to renegotiate their multi million dollar deals to sell films and TV programmes in return for equity.

The FT reports that Kirch owed E500 million at the end of 2001 and faced between E900 million and E1.3 billion in contractual commitments until the end of this year. Output deals worth nearly E4 billion are believed to have been signed for free-to-air and pay-TV up to 2006. Analysts view the move as an outside possibility.

*Publisher Axel Springer has initiated a law suit to make KirchMedia honour a E767m "put" option exercised in January, forcing it to buy Axel Springer's 11.85 per cent stake in ProSiebenSAT.1, a German TV broadcaster, by midnight today (30/4/02).

The damages equal the original claim minus the E240 million market value of the ProSiebenSAT.1 stake, which Axel Springer would now retain.

The claim against KirchMedia is apparently being pursued primarily to exchange for a bigger stake in ProSiebenSat1.
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EMTV cuts losses, may expand

German media company EMTV, which disposed of its Formula One stake to German media peer Kirch in 2001, reports that it has cut its 2001 pre-tax losses by more than 75 per cent to E331 million ($298 million) from E1.34 billion in 2000 as last year's restructuring measures take effect. Werner Klatten, EMTV chief executive said the group is hopeful that it will reach break-even at a core level in 2004.

EMTV announced E240 million in exceptional write-offs due to the weak advertising market, including a E138 million write-down in the value of its Junior TV children's television unit, and a E50 million write-down of the assets of the Jim Henson company which created the Muppets.

Klatten even suggested that EMTV could make further acquisitions as its rivals shed assets.
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Multi-platform iTV creation

An enhanced TV product from Mindhouse has been designed to allow broadcasters to create and manage interactive content across all digital TV platforms.

The company says that previously cost-effective solutions for broadcasters have been hampered by the inability to easily manage content for individual digital platforms, both in the UK and abroad.

Mindhouse adds that its new technology for the interactive television industry will enable broadcasters to create and update a central library of enhanced content and publish it simultaneously to any DTV platform across the world.

It is intended that viewers will be able to use the enhanced features to access additional information about the broadcasters most popular programmes, check programming schedules, read articles about their favourite stars and view related merchandise.

Another advantage cited for the Mindhouse software is that it allows programme makers to create interactive content themselves, without the need for additional technical support. Also, content can be updated from any broadcaster site, anywhere in the world.

Mindhouse's product is intended to eases the issues of platform incompatibility for broadcasters, which has hindered digital channels who need to create interactive content which works across all platforms in any given market.
Mindhouse Director, Steve Scott comments, "Incompatibility has been one of the major issues facing interactive television in this country and worldwide. In the UK for example, we have three different platforms, which has been like having three different Internets, none of which can speak to each other."

"This has been a serious problem for channels which are broadcast on more than one platform. If they've developed interactive content, chances are it's only been deployed on one platform, in the UK this usually means Sky. Now they'll be able to create and update content for all platforms and not just in this country, but around the world. That means the revenue generating potential of enhanced TV has been dramatically improved."

In the coming months, Mindhouse envisages its technology being used to allow digital viewers to buy programme-related merchandising and services directly from their televisions.

Steve Scott adds, "Our solution is an important step along the road of making enhanced TV profitable."
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AOL may float TW Cable

AOL Time Warner Inc's top executives are quietly discussing selling a minority stake in Time Warner Cable through a public stock offering.

The move reported in the WSJ would create a publicly traded entity valued at
about $45 billion (E50 billion) in stock. The prime reason for such a move is to help resolve a longstanding dispute concerning AOL's cable and content
partnership with AT&T Corp.

AT&T Corp. has been trying to shed its 25.5 percent stake in Time Warner Entertainment for the past two years, but it has been unable to agree a deal with TWE parent AOL Time Warner.

A public offering would enable AOL Time Warner to compensate AT&T for its stake.
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US operators miss digital deadline

Almost three-quarters of US commercial broadcasters that were supposed to be offering a digital signal by Wednesday May 1st will fail to make the deadline.

Hundreds of stations have been filing requests for extensions citing a variety of financial and technical reasons, making the missed deadline no surprise, despite slowing the federally mandated digital switchover.

The General Accounting Office reports that 74 per cent of stations that were supposed to be transmitting a digital signal by the May 1 regulatory deadline would be unable to do so. The high cost of new technology was the most common factor cited, with costs averaged at 63 per cent of annual revenue with no discernible additional income. Low consumer interest, high prices of digital TV sets and tower construction issues all contributed to the tardy response.

However, 95 percent of the major network affiliates in the top 30 markets are already offering digital broadcasting, and their signals reach about half of the population.

Once digital penetrates 85 per cent of the US viewing market, the law requires broadcasters to surrender their analogue-spectrum licenses back to the government to be reissued to other commercial ventures at auction.
Michael K Powell, the FCC chairman, has called for the major industrial players to impose their own voluntary deadlines to get the project moving. During NAB he urged the four major networks and other major programmers to digitally broadcast at least half of their prime-time shows by this Autumn, and asked cable and satellite companies to carry some digital programs by the beginning of next year at no extra cost to subscribers. He also proposed deadlines over the next four years for television makers to increase their production of sets that include digital tuners. Critics argued that voluntary deadlines would not work, and that the government needed to take the issue in hand and resolve it.
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iTV user survey issued

Canal Plus Technologies, a subsidiary of French digital TV firm Canal Plus, has issued the results of a user survey for its interactive TV viewers in France.

The survey reports revenues of E150 million for interactive TV services in 2001, and says that iTV services such as Mosaic Navigator, Pari mutuel horse race betting, custom portals, t-commerce and pay-per-view events were identified as the biggest draws for subscribers.

The survey of CanalSatellite subscribers in France, showed that 21 million visitors each month access its Mosaic Navigator screen, the gateway to its interactive services; the survey also showed the company sold 11 million pay-per-view events in 2001 and opened 58,200 horse betting accounts.

Canal Plus Technologies CEO David Moss was reported in EuropeMedia as saying, "This survey only confirms what Canal Plus Technologies has asserted all along, that iTV services in Europe translate to lucrative partnerships, and the cable TV industry and our content rights holders should aggressively be looking to deploy similar services in the US."
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Canada's grey market sunk

Last week Canada's Supreme Court supported calls by satellite broadcasters and the federal government to tune out a 'grey market' for capturing direct-to-home TV signals from the US.

Some hundreds of thousands of Canadians watch US based programming from services such as DirecTV rather than Bell Canada's ExpressVu. Companies who connect Canadians with American signals - providing US addresses for subscriber accounts or selling hacked descramblers - cite free-speech grounds to condemn any law change.

It is estimated that there could be as many as 700,000 Canadians with grey-market dishes.

The country's Radiocommunication Act, drafted in 1985 prohibits decoding of "an encrypted subscription programming signal or encrypted network feed (without) authorisation from the lawful distributor of the signal or feed." However, grey market satellite TV providers say the US companies were not 'lawful distributors' in Canada under Canadian broadcasting rules, so that provision of the Radiocommunication Act could not be applied.

The new intepretation of the law is that because the US broadcast is not authorised, all decoding of American signals is illegal, even if Canadian subscribers are paying for the service via mailing addresses in the US.
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Conax supplies Slovak TV

Digital-TV and IP streaming Conditional access technology supplier Conax AS for has signed a contract with SaTVcard s.r.o (part of Strong group) to provide the Conax-BMS Blue Subscriber Management solution for its Call Centre operations in Bratislava, the Slovak Republic.

SaTVcard s.r.o. has acquired the Call Centre facilities in Bratislava from Telenor Coloursat. More than 20 multi-lingual operators are currently handling the customer care through Conax' subscriber management solution, Conax-BMS Blue. The contract includes licencing and operation of the subscriber management solution and the call centre's clients. SaTVcard's call centre operation is connected to Conax' conditional access solution, Conax-CAS3 in Norway for handling of PrimeTV clients in Western and Central Europe.

Conax-BMS Blue is tailored to support various forms of encrypted pay-TV services, or encrypted services delivered over the Internet. Conax-CAS3 is a full Conditional Access System for DVB/MPEG-2 transmissions, designed for applications like satellite feeds to cable head ends, contribution links, closed user groups and large DTH operations.

"Central Europe is a primary target market for Conax, and we are delighted to experience a growing demand for our innovative security and CRM solutions in this area. Conax is particularly pleased with SaTVcard's decision to use the Conax-BMS Blue Subscriber Management Solution and CRM functionality at the strategically positioned call centre in Bratislava," says Shahzad Abid, Vice President Sales and Marketing at Conax.

SaTVcard supplies technical and business organisational services to the media industry in a 'one-stop shop'.
The company reports that broadcasters and other content owners are concentrating on their core-activities and thus are looking to outsource the complex ability of such a technical operation. These operations are sought by SaTVcard which aims to manage, install and maintain all service aspects for their client/broadcaster.

"Historically, all the separate aspects and disciplines are widespread over several industries and this is the reason why in today's interactive media market there are no independent service providers in Central & Eastern Europe who can offer the media rich services in one full service company. This is why SaTVcard aims to offer such complex services, and the choice for using the Conax-BMS Blue subscriber management solution from Conax has proven popular and easy to use amongst our international team of operators," says Wouter Peetsold Jr, General Manager of SaTVcard.
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Monday 29th April 2002

ITV Digital shakes up UK media

ITV Digital parents Granada and Carlton Communications are once again discussing the terms of a £5 billion (E8.5 billion) merger, with the exact share divide of any new company the main point of contention. Funding of ITV Digital was a major hurdle when talks between the two collapsed two months ago - but liquidation - or possibly sale - of ITV Digital is now expected within days hence that aspect of negotiation will be removed.

The other obstacle is government regulations - but the companies, along with their advisors Lazard and UBS Warburg are reported to have formed a corporate structure which they believe will overcome the competition regulator's objections - though these may be added to due to government dissatisfaction with the way the ITV Digital/Football League dispute has been handled. Rules limiting one company to 15 per cent of the UK television audience are due to be scraped in the new UK Communications Bill to be published after Wednesday's (1/4/02) local elections, theoretically facilitating the creation of a single ITV company.

*A report in the London Metro newspaper today says that Microsoft is putting together a consortium to bid for ITV Digital, and is among 60 potential bidders to have requested information packs from administrators Deloitte & Touche.

*Greg Dyke, Director General of the BBC has renewed his argument over the weekend that, in the absence of a commercial broadcaster running ITV Digital, a free-to-air digital terrestrial service should be established - which would ensure the BBC's digital channels were not dependent on BSkyB and the cable companies for distribution.

*An FT report today says that the new Communications Bill (see above) will retain sufficient cross-media ownership restrictions to prevent Rupert Murdoch from expanding in to free-to-air terrestrial television - though he would be able to acquire up to 20 per cent of local radio. Murdoch's News Corp owns national newspapers The Sun and The Times and 36.3 per cent of satellite TV company BSkyB. If competition is seen to increase, then the Communications regulator, Ofcom, says that it could review restrictions on tereastrial Channel 5's ownership - which would allow News Corp, or rival publisher Trinity Mirror, to buy more than 20 per cent of the channel.

On Friday (26/4/02) UK Culture Secretary Tessa Jowell made a statement in Parliament to "bring MPs up to speed ," on the ITV Digital crisis, confirming that there would be no government bail-out for ITV Digital or the Football League, and declaring, "Digital TV is more than ITV Digital," describing it as the failure of a company, not a technology and reafirming the Government's plans to switch off analogue broadcasting in 2010.

Court-appointed administrators Deloitte & Touche said on Thursday (25/4/02) that they had run out of money to keep the broadcaster going beyond early next week - so services are expected continue service over the weekend, allowing showing of the first division soccer playoffs, but the plug will be pulled soon after.

When pay services such as Sky One, Sky Premier, and Sky Sports cease broadcasting on the DTT platform - currently being supplied for free - the ITC will revoke the licence and begin offering the licence out to tender - expected to take six weeks. The digital terrestrial licence is a key asset of ITV Digital and its loss would hasten liquidation of assets rather than a complete sale. However, as many as 60 prospective buyers for all or part of ITV Digital are reported to have approached the administrators with Jowell commenting, "There are established and new industry players wanting to have a go at making this proposition work," and avowing that ITV Digital's failure will not deflect making digital future a reality.

In addition to a supermarket bid for the Monkey puppet 'mascot', television set top boxes would be up for sale to ITV Digital subscribers - who are themselves the prime asset.

Assuming liquidation went ahead, the Football League would pursue its legal battle over the £178.5 million (E289 million) owed by ITV Digital in TV rights, with a £500 million (E800 million) suit covering consequential damages including sponsorship. The rights for televising League games would revert to the clubs, who would be free to find a new buyer for the contract.

The ITC said it would continue liaising with Government and broadcasters to ensure the continued availability to viewers of digital terrestrial free-to-air services. The BBC and other free-to-air digital terrestrial channels such as BBC Choice, BBC News 24, BBC4, ITV2 and ITN News have agreed to continue providing their channels and paying Crown Castle for their transmission.
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Viacom Posts $1.1 Billion Loss

US media conglomerate Viacom Inc, owner of CBS and MTV, posted a $1.11 billion (E1.24 billion) net loss for its first quarter Thursday (25/4/02), compared with a net loss of $7.3 million (E8.1 million) in the same period a year ago - the loss being attributable to a write-down of goodwill at its Blockbuster video rental unit.

Blockbuster became 81 per cent owned by Viacom in 1994. The write-down was to conform with new US accounting rules which consider whether any premium paid to acquire a company, has lost value.

Excluding this $1.48 billion (E1.65 billion) charge, earnings were better than analysts had been expecting at $367.4 million (E409 million). Viacom's overall revenues fell one per cent to $5.67 billion (E6.3 billion) from $5.75 billion (E6.4 billion) in the same period a year ago, primarily due to the slowdown in advertising which provides about half the company's revenues.

Earnings before taxes, interest payments, depreciation and amortisation fell five per cent to $1.09 billion (E1.21 billion) from $1.15 billion (E1.28 billion) a year ago.

Cable networks including MTV, VH1 and Nickelodeon, had a 12 per cent rise in pretax earnings on a five per cent increase in revenue.

The company has forecast a double-digit increase in earnings for 2002 with Sumner Redstone, the Chairman and Chief Executive, suggesting that the advertising market was picking up, saying, "The bad news is behind us."
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Vivendi shares fall

Vivendi Universal shares fell three per cent on Thursday (25/4/02) as plans to sell Vivendi Environnement were cancelled, throwing doubt on CEO Jean-Marie Messier's intended media focus for the group.

During the annual shareholders' meeting of the water business in Paris a chastened Messier confirmed that he had put on hold moves to deconsolidate the 63 per cent-owned subsidiary following political and union pressure.

Messier had reportedly intended to use the proceeds from the sale of a 14 per cent stake in Vivendi Environnement towards the cost of acquiring minority interests in Cegetel, Vivendi Universal's 44 per cent-owned telecommunications unit.

Messier is to stay at the head of Vivendi Environnement, and Henri Proglio will remain management board chairman, with planed management changes now shelved.

Canal Plus AGM

As expected, the Canal Plus annual shareholders' meeting on Friday (26 April) morning voted Pierre Lescure off as president.

He is replaced by Dominique Farrugia, generally seen as a move by Messier to appease feeling among staff, subscribers and shareholders. The general atmosphere was much less tense than the Vivendi Universal AGM two days earlier.

Lescure presided over the meeting, the motion to displace him being the last one to be voted upon. He expressed his confidence in Farrugia, who said he would continue Lescure's line. Farrugia has long been with Canal Plus, primarily as a comedian. He went away to create the Commedie! Channel before returning to Canal Plus as Director of Programmes.

Lescure said that there had been an element of confusion in the press which didn't always distinguish between Canal Plus SA, the company operating the premium channel in France, and Canal Plus Groupe, which operates pay TV in several European countries.

Canal Plus SA has been doing well, despite increased competition from new sectors: new channels on cable and satellite, the Internet and most of all DVD. Churn rate is the lowest of any pay TV service in Europe, he said. Familes stay an average of 11 years with Canal. Almost half the subscribers take it in a digital form, via either cable or satellite and the aim is to increase this proportion.

Asked about the problem of piracy, Marc-Andre Feffer, Canal Plus Vice President, said that viewing cards had just been fully swapped out in Spain and were about to be swapped in Italy. The swap out of French viewing cards is planned for the autumn. He said that piracy was less of a problem in France than Spain or Italy, mainly due to stricter legislation. Some 2000 cases had been brought to court in France and about 300 were pending.

Asked whether there were plans for a merger between Canal Satellite and TPS, Lescure said that he had said last year that such a merger would make financial sense. The situation has evolved: Canal Satellite is now profitable, indeed possibly the only digital satellite TV platform to be profitable in Europe, so does not need to seek a merger with its rival. If such a merger ever did occur Canal Satellite would have the leading role.
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