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NEWS Monday 18th - Monday 25th November 2002
Scroll down page or click below for news - latest first
| Tuesday | |||||
Friday 22nd November 2002
Vivendi rejects E15 bn offer
UK media open its doors
Bertelsmann gets E1.5bn loan
SkyPerfecTV reports profit
Canada OKs SpaceWAY
Satellite TV may show political broadcasts
NTL Broadcast on real time conference
Vivendi rejects E15 bn offer
Debt-laden Franco-American media group Vivendi Universal turned down an E15 billion bid for its entertainment assets received from an investor group which includes oil billionaire Marvin Davis.
The group wanted to buy Vivendi's assets, including Universal Studios, Universal Music and the group's networks and theme parks.
But it's been reported that Vivendi was not interested in the proposal allegedly saying that the price does not correspond to the value of the assets and that they are not for sale.
Meanwhile Vivendi's CEO Fourtou keeps selling the company's non-core assets to reduce its huge debt. Fourtou recently announced plans to dispose of assets worth E7 billion by the end of the year, and a further E16 billion by the end of November 2004.
Already Electricite de France is expected to buy four per cent of Vivendi Environnement, Vivendi Universal's water and waste management group, as part of the French government-backed plan to prevent the company being taken over by a foreign bidders. Electricite de France will pay around E400 million, which will allow it to bid for another four per cent stake in two years time.
Vivendi has also made a move towards generating new revenue by launching into the online music market. The company would make about 43,000 tracks available for internet download from the songs owned by its Universal Music Group unit, with plans to take its entire catalogue online.
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UK media open its doors
After months of consultation with the industry, consumers and regulators, the UK Communications Bill was published in final draft form on Wednesday (20/11/02). One of its key issues is the reshaping of the media industry with more liberal ownership laws.
A new super-regulator - the Office of Communications, will oversee the media sector. Ofcom gathers into one body the Broadcasting Standards Commission, the Independent Television Commission, Oftel, the Radiocommunications Agency, and the Radio Authority. Ofcom will have an unprecedented range of powers and be given the task of regulating broadcasting and telephony's three great powers: the BBC, BT and BSkyB.
The bill lifts the ban on non-EU companies owning prime UK media assets. The culture secretary, Tessa Jowell was reported as saying, "Britain is already one of the world's leaders in the communications industry. This bill will give companies an even better environment to develop their businesses."
"With the publication of the Communications Bill, we hope to create a market that thrives on competition to provide the best in information and entertainment for the UK."
The Communications Bill also introduced a special provision for Ministers to intervene in newspaper mergers and acquisitions on public interest grounds.
A joint Committee of both MPs and Peers, headed by Lord Puttnam, shaped the bill which is expected to become law by autumn 2003. There were almost 150 recommendations to change the Bill. The Government accepted 120 of them.
One of the things public service broadcasters have been lobbying about was to impose a "must carry" obligation on Sky. However the Government decided to maintain the existing regime for carriage on Sky and it imposed an additional obligation on the public service broadcasters to put their content on the satellite platform. But a clause in the Bill suggested that the public service broadcasters may be able to recoup the money they pay to Sky from a reduction in the licence fees paid to Government every year, as a tax for using the airwaves.
Jowell commented, "This bill went through an almost unparalleled process of scrutiny and consultation leading up to its publication today. This has been democratic debate at its very best and has played an essential role in shaping its final form."
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Bertelsmann gets E1.5bn loan
German media conglomerate Bertelsmann has closed a five-year E1.5 billion Syndicated Credit Facility.
The loan comes from a consortium of 19 European and American banks. The deal was arranged by BNP Paribas, Citigroup and Commerzbank Securities with the three banks acting as joint Bookrunners.
The company said that the loan is a further step in Bertelsmann's finance strategy to centralise group funding with the intention of preserving a conservative financial profile. The money will go to help finance its operational business, indicating the cash is not earmarked for any of the company's big-budget acquisitions. These include Bertelsmann's E150 million to E170 million buyout of Clive Davis' J Records and the planned takeover of Zomba Music Group, which could cost the German group up to E3 billion.
The new credit line will partially replace an E2.5 billion bridge loan Bertelsmann secured in June this year.
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SkyPerfecTV reports profit
By Owen Hughes
Japan's largest digital satellite TV platform, SkyPerfecTV, has reported the first operating profit in its history after recording a record loss in its previous results.
The third quarter results showed a E4.24 million profit for SkyPerfecTV. This came three months after the April to July quarter revealed a net loss of E162.9 million. The loss was despite an increase in sales of nearly 23 per cent thanks to live coverage of the football World Cup in Japan and Korea in June.
Given that the company had booked about E154 million in expenses and writedowns as the cost of its exclusive World Cup coverage, a loss was expected. But the colossal volume of red ink increased the quarter loss six-fold compared the results a year earlier, and caused SkyPerfect Communications shares to fall 3.6 per cent on the day of the announcement.
SkyPerfect has around 3.3 million subscribers.
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Canada OKs SpaceWAY
Industry Canada has granted approval to Hughes Network Systems to use its future SpaceWAY North American satellites at 99 degrees and 101 degrees for broadband services within Canada, according to Sky Report.
SpaceWAY will be able to use its Ka-Band spectrum for advanced broadband services delivered to earth stations licensed in Canada. SpaceWAY's footprint will exceed 80 per cent of Canada's population, including many geographically dispersed and under-served areas throughout the large country, the company said.
Scheduled for launch in 2003, with commercial service beginning in 2004, SpaceWAY will provide connectivity for high-bandwidth, multimedia services. SpaceWAY applications include high-quality, secure videoconferencing, telecollaboration, Internet access, telemedicine and distance learning-on-demand.
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Satellite TV may show political broadcasts
UK satellite, cable and digital television channels would be obliged to screen party political broadcasts under proposals being considered by the Electoral Commission, reported News Telegraph.
Existing rules only require terrestrial channels to show the broadcasts. But a report from the commission, due to be published in late December, is expected to recommend this be widened to include the largest of the newer channels - such as Sky 1 and UK Gold.
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NTL
Broadcast on real time conference
UK cableco NTL Broadcast* provided this year's News World conference with
one of its new 'speaker support package' production trucks. The package
includes a team of engineers who will film, mix audio/visual feeds and
playout both live and pre-recorded material for big screen coverage throughout
the conference.
This is the first time that News World has provided coverage of the speakers
at the conference. The package combines an outside broadcast and production
unit with satellite up linking and downlinking capabilities.
NTL Broadcast is also launching the Feltham Playout Centre's dedicated
'news drop-in'facility. Designed with its proximity to London Heathrow
in mind, it is able to swiftly film, edit and uplink a news or celebrity
interview piece for international broadcasters.
*NTL Broadcast
operates as a separate division alongside the cable division of NTL (NTL
Home).
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Thursday 21st November 2002
Telenor acquires Swedish Utfors
Netgem launches DTT/Internet box
PM pledges broadband by 2005
TPS files complaint
Plug pulled on F1 Digital +
Australian pay TV dispute
Nokia, Matsushita team up for networking
Goldshield launching TV shopping channel
SEC probe into Vivendi set to grow deeper
Telenor acquires Swedish Utfors
By Goran Sellgren
Norwegian Telenor made further inroads into its Eastern neighbour Sweden following recent investment in cable TV, telephony and broadband. Telenor is now targetting new media via its investment, made public on Tuesday (19/11/02), in Swedish IT/ IP and broadband supplier Utfors.
Telenor is paying 264 million krona (E29 million) for 34.4 per cent of Utfors, which has struggled for some years with financial difficulties and had faced bankruptcy. Telenor might end up with controlling over 90 per cent of the Utfors shares via an imminent financial restructure.
Utfors was founded in 1995, in the Northern University city of Umeaa, as a means for students to establish a cheap way of communicating with the central mainframe computer of the university. Utfors' business idea was created as a result of offering cheap links to the Internet, and Utfors was the first company in Sweden to offer free Internet services to its customers. Utfors soon grew to become a national operation.
Since then Utfors has invested over two billion krona in building its own fibre glass networks, which have delivered 5,000 kilometers all over Scandinavia. Utfors now has some 2,000 subscribing business customers.
"One could of course never be too happy over such an arrangement; Utfors has been driven into a liquidity crisis where the banks would not support continued operations," Jan Werne, MD of Utfors commented.
By acquiring Utfors Telenor now gets access to this giant network - and its customers - at one tenth of the price it took to build. By integrating Utfors into Telenor Business Solutions Telenor now becomes the biggest in the Swedish business market after market-leading Telia.
Utfors now has 200 staff in Sweden, while Telenor Business Solutions has some 300.
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Netgem launches DTT/Internet box
Yesterday (Wednesday 20/11/02) French set-top-box manufacturer Netgem launched its i-Player, a £150 (E235) box that will give customers access to all Freeview digital terrestrial channels plus connection to the Internet and e-mail via the phone line.
Joseph Haddad, Netgem's Chief Executive said that the I-Player was designed with Freeview's service in mind. The box finds and sets up channels automatically and it also offers channel lists and an EPG service to see what's available at the time of viewing and what's next. A box was set up during the demonstration and sent a still photo in an email, captured from an add-on camera to a second TV and box at the back of the room.
The device's software allows for upgrades through the telephone line - including any later addition of premium pay TV services - and a USB port enables a range of accessories to be added. These include an external hard drive to store movies or MP3, audio outputs for an external speaker system, web camera and printer – using compatible non-proprietary products.
During the launch Anwar Choudhury, Director of Markets, Technology and Innovation at the Office of the e-Envoy, Cabinet Office announced that the UK government had asked every government department to consider digital TV as a key channel for the delivery of information services. Choudhury explained the rationale, "Some 60 per cent of the population have PC access, 75 per cent mobile phones and 98 per cent TVs, therefore it is through the TV that we will get access to the most socially inclusive delivery of services, which is very important." (also see UK government announcement below).
Barry Cox, Head of the Digital Television Stakeholders' Group, an independent forum for those involved in the future of digital television added, "The UK is unique in provding so many TV channels without a subscription – the first horizontal TV market, with a range of suppliers and little support from broadcasters." He also said that the speedy delivery of set tops such as Netgem's had greatly contributed to the success of UK DTT service Freeview.
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PM pledges broadband by 2005
Speaking at the E-Summit this week UK Prime Minister Tony Blair promised every school and doctors' surgery in the UK would have a broadband connection by 2005. He claimed the efficiency gained would more than justify the investment and would lift services out of "the Dark Ages". The government is reported to have allocated some E9 billion to achieve its plans for the development of e-commerce in the UK (also see Netgem launch above).
At the same event E-minister Steven Timms announced formation of a Broadband Taskforce to deliver the initiative. Meanwhile BT CEO, Pierre Danon told the summit his company would be delivering broadband to 80 per cent of the UK population by 2005 and he foreshadowed a new service called Midband that would delivering 128Kps to areas where broadband would be difficult to deliver.
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TPS files complaint
By Sotires Eleftheriou
French digital satellite platform TPS has filed a complaint with the Conseil de la Concurrence, the French competition authority, over the deal reached between CanalPlus, Kiosque, Canal Satellite PPV platform, and the LFP, league of professional football.
The complaint, for alleged "abuse of dominant position", was filed by TPS Star, TPS's own sports and movies channel set up last year to counterbalance Canal Plus, and Multivision, TPS's PPV service.
TPS considers that it was penalised by the LFP in the auction for the awarding of football transmission rights for 2004 to 2007. The LFP has postponed the final decision for this award, but has nevertheless shown a definite preference for the Canal Plus bid, for E480 million a year for the first three lots (out of a total of seven). However it is prepared to pay a lower price of E430 million if lot three (PPV rights) is on a non-exclusive basis, ie shared with TPS Multivision.
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Plug pulled on F1 Digital +
The pay-per-view Formula One service available through Sky Digital in the UK, F1 Digital Plus, has been closed down.
Not even a year old, Bernie Ecclestone's innovative channel, which offered a choice of eight video screens and information feeds was just too expensive to attract subscribers at E18 a race.
The production operations included flying two jumbo jets full of equipment around the world for each race.
Similar services to Sky's had been running with other European pay-TV operators including in Germany - where it was launched in 1995 - and France. But now all the digital broadcasts have been halted.
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Australian pay TV dispute
By Owen Hughes
Australian terrestrial Seven Network has continued its attack on the country’s pay TV sector by taking the largest pay TV platform to court and accusing it of colluding with its free-to-air rivals to take away its rights to the national winter sport.
In a statement of claim to the Federal Court in Sydney, Seven accuses Foxtel's three partners, Telstra, News Corp and Publishing and Broadcasting (PBL) of working together to win the rights to Australian Football League (AFL) or Aussie Rules football.
Seven lost the rights to the most popular winter sport in the country after the end of the 2001 season after 45 years as the incumbent broadcaster. The winning bid was lodged by Foxtel and Seven's two commercial rivals, Ten and Nine. Nine's owners are PBL.
Seven said the move was also designed to make it harder for its cable TV channel, C7, to broadcast live sports. C7 was effectively taken off the air when third-ranked pay TV platform Optus reached a tentative channel sharing agreement with Foxtel earlier this year when it was replaced by one of the two Fox Sports channels. The full channel sharing agreement was approved by Australian regulators last week.
Seven has come under pressure as its ratings have fallen over the past year compared to market leader Nine, with Ten often claiming the number two spot. This has led to pressure from advertisers to cut its tariff for commercials.
The breaches regarded the parties' pursuit of a common alleged objective: to enshrine a monopoly in subscription television infrastructure and content, and to seriously damage Seven, according to the company.
Other respondents to Seven's case included Foxtel, Fox Sports, National Rugby League, Australian Football League, Ten Network Ltd, Optus Vision and Austar United Communictions Ltd.
Seven said it would seek "substantial damages" for the alleged collusion.
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Nokia, Matsushita team up for networking
Nokia and Matsushita have agreed to jointly exchange data between mobile phones and home appliances. This tie-up aims to make it possible to offer services such as in-home monitoring.
Mobile phones, consumer electronic devices and home appliances are expected to be able to use the system to exchange text, images, audio and video through Multimedia Messaging Service.
Nokia and Matsushita intend to develop common Java APIs so that users can use the same application on both a mobile phone and a home electronic device. They will also work on interface technologies for data exchange between these devices.
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Goldshield launching TV shopping channel
Goldshield Group PLC and Ideal Shopping Direct PLC said they have signed a Letter of Intent whereby Goldshield will launch the Goldshield Vitality TV Shopping Channel via digital satellite in Q1 2003.
Under the proposed agreement, the companies said Ideal Shopping Direct - which already runs the Ideal World TV home shopping channel - will provide Goldshield with expertise and broadcast facilities to help develop this business for Goldshield.
Ideal Shopping Chief Executive Paul Wright said the agreement with Goldshield is further affirmation that the business is firmly back on track following the fire that destroyed its premises 20 months ago.
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SEC probe into Vivendi set to grow deeper
The US Securities and Exchange Commission has intensified its investigation into France's Vivendi Universal - previously classified as 'informal', and now described as formal, thus the SEC can subpoena third parties such the company's accountants and law firms.
Vivendi is already undergoing separate investigations by the US attorney's office for the southern district of New York and by regulators in Paris.
Reports speculate that this SEC inquiry will range from Vivendi's method of disclosure of its financial statements to the accounts themselves.
The Commission des Operations de Bourse, France's stock market regulator, has also launched a wide-ranging inquiry into Vivendi's accounting.
Two French judges have been appointed to investigate whether Vivendi published 'false' balance sheets for 2000 and 2001. The inquiry is also examining whether it had issued 'false or misleading' information on its financial prospects at that time.
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Wednesday 20th November 2002
Liberty-Casema deal called off
World's biggest cableco created
Star results up
BBC Three to launch Feb 9
FCC Restore Dish Ka-Band license
Scientific-Atlanta buys ChanneLogics technology
Bond film, buy another day?
Liberty-Casema deal called off
US cable company Liberty Media Corporation has pulled out of a E750 million agreement with France Telecom for the acquisition of Dutch cable operator NV Casema because the companies were unable to come to terms on a new agreement acceptable to John Malone's Liberty Media.
Dutch regulators have been reviewing the deal and recently started an in-depth investigation. However Liberty was said to be confident with the deal. But the regulatory delay was an issue for France Telecom, which is carrying a heavy debt load of E70 billion and wanted to close the sale before the end of the year so it could pay down some of its debt.
Liberty said that under the terms of the original agreement with France Telecom, each party has had the right since November 1, 2002 to terminate the agreement because the parties were unable to close the transaction by October 31, 2002.
Although this is a setback for Liberty in its efforts to expand its European cable operations, the company is already a major presence in European cable through its indirect control of Europe's largest cable operator, United Pan-Europe Communications NV.
Casema has 1.316 million subscribers in the Netherlands. Adding it to UPC's existing interests would have given Liberty nearly a 60 per cent share of the Dutch cable-TV market.
On another front, post-production powerhouse Liberty Livewire, a subsidiary of Liberty Media, is doing a major rebranding campaign in an effort to raise its Hollywood profile and unify its businesses under the name 'Ascent Media Group' as from Wednesday (20/11/02).
The name comes from Ascent Entertainment Group, a pay-per-view service provider bought by Liberty Media in February 2000. The designation will be used as the corporate identity name as follows: Ascent Media Creative Services (formerly Liberty Livewire Pictures), Ascent Media Network Services (formerly Liberty Livewire Networks) and Ascent Media Management Services (formerly Liberty Livewire Media).
The name change also comes because of a trademark infringement lawsuit where ElectroPix which was doing business as Live Wire, claimed in US District Court for Central District of California that Livewire infringed on its trademark. Liberty then agreed to stop using the Livewire name by November 25, 2002.
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World's biggest cableco created
The world's largest cable company has been created in the US following the merger of Comcast and AT&T Broadband - the latter cable unit having been spun-off from telecom giant AT&T last Friday. The merged entity, known as Comcast, covers 39 million homes with 22 million current TV customers and 3.3 million high-speed Internet subscribers.
The E31 billion merger, which took effect at market close Monday (18/11/02) US time, has an aggregate value of about E60 billion, including stock and debt.
The combined company will have 59,000 employees and a presence in 41 US states. Michael Armstrong, retiring Chairman and CEO at AT&T, is now Chairman of Comcast. Brian Roberts is CEO of the new company.
Comcast said it has assumed more than E24 billion in debt from AT&T and its subsidiaries, as well as E5 billion of AT&T subsidiary trust convertible preferred securities held by Microsoft, which will be converted into 115 million shares of Comcast.
AT&T also completed its reverse stock split, becoming the first component of the Dow Jones industrial average to pursue such a move. The reverse split boosts the price of AT&T's common stock by cutting the number of shares outstanding to about 770 million from about 3.85 billion.
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Star results up
By Owen Hughes
Asian regional pay TV platform Star said that its quarterly operating loss for the period to the end of September this year was 27 per cent better than the same time 12 months earlier.
The News Corp-owned company did not reveal any figures, but it said that the gain was due to 15 per cent revenue growth mainly provided by Star plus in India. The earnings report also highlighted that joint ventures in India, China and Taiwan, respectively Hathway Cable, Phoenix Satellite TV and Taiwan Cable Systems, reached a total of E4 million, up from E1 million for the same period in 2001.
Phoenix reported a net loss of E2.6 million for the first quarter of its financial year in 2002. Although analysts called the results encouraging the failure to gain carriage for the Infonews service in China and Taiwan remained a concern.
Star's Asian regional joint venture, ESPN Star Sports earned E3 million in the quarter to the end of September, compared to a E5 million loss in the same period in 2001. It reported a 48 per cent increase in revenue in Hong Kong and India on the back of anti-piracy measures and subscription increases levied on cable TV operators respectively.
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BBC Three to launch Feb 9
UK pubcaster the BBC's latest digital service aimed at young adults is to launch on February 9 2003 BBC News reports. BBC Three will replace the current BBC Choice digital channel when it launches, bringing entertainment, comedy, drama and news to its target audience of 25 to 30-year-olds
Culture Secretary Tessa Jowell has previously turned down BBC Three's application because it was not distinctive enough, but now the green light has been given and it has the date on which to open the champagne.
BBC Three controller Stuart Murphy wants the channel to have an intelligent feel, rather than the shock tactics sometimes employed by Choice, said the BBC.
Viewers can get BBC Three through Freeview, digital cable and satellite. The channel is forbidden from using tactics employed by stations such as E4, the digital channel from Channel 4, where it shows popular American imports before they are shown on terrestrial television.
The stringent stipulations laid down by the government mean that BBC Three will have to show at least 90 per cent of programming sourced in Europe. The channel will air 19:00-04:00 daily.
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FCC Restore Dish Ka-Band license
The International Bureau at the US Federal Communications Commission reversed an earlier decision to strip EchoStar of one of its Ka-Band authorisations, saying the company demonstrated that it is meeting milestones to build and launch the next-generation satellite system , according to Sky Report.
FCC documents acquired late Monday said EchoStar's petition for reconsideration of the initial FCC order - which took away the original Ka-Band licence - had "additional evidence not previously presented" concerning EchoStar 9, the hybrid C-Band/Ka-Band bird being constructed for the company. While the commission typically doesn't grant petitions for reconsideration based on new evidence, the new facts concerning the first order required a reversal that's in the public interest, the agency said.
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Scientific-Atlanta buys ChanneLogics technology
US cable television set-top box to headend manufacturer Scientific-Atlanta has bought software, technology and other assets of ChanneLogics Inc, a software developer that provides cable operators visibility to their HSD traffic and bandwidth consumption all the way down to the individual cable modem.
Terms of the purchase were not announced.
The company's CableLogics software suite also includes forecast and prediction algorithms that allow the operator to identify potential bottlenecks and efficiently plan capacity expansion.
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Bond film, buy another day?
The new James Bond film is released to the general public today (Wednesday 20/11/02). The latest movie, 'Die Another Day,' is good business for firms outside the film industry. Product placement is not particularly subtle throughout the film and critics said it is like a long advertisement - for vodka, watches and cars.
The movie breaks the record for product placement in a feature film. Twenty companies have paid E70 million between them to see their products on the big screen. There might be a downturn in advertising, but brand consultant Steve King said that such a strategy made sense. "Years ago you could expect to reach 80 per cent of TV viewers but with the proliferation of cable and satellite channels that figure has fallen," he told the BBC's World Business Report. "One of the unique things about cinema is its global appeal which means advertisers get the reach they cannot obtain elsewhere."
This is the 40th anniversary of Bond films. 007 movies have a broad audience reach - although with its 'cars stars', beautiful but lethal women and special gadgets, 60 per cent of its audience is male.
Experts are said to believe that soon interactive viewing and mobile technology will link up and anyone will be able to buy an Aston Martin from the screen or the watch straight from Pierce Brosnan's wrist.
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Tuesday 19th November 2002
Canal Plus to axe more jobs
Government OKs BSkyB fees
Channel 4 new digital channel
Vodafone files overcharge claim against NTL
'Galaxy' digital satellite TV in HK By Owen Hughes
Korea triples digital TV sells
OpenTV low 3Q results
Canal Plus to axe more jobs
Only last week the troubled pay-television operator Canal Plus won an auction for 11 French channels paying E480 million a year for exclusive television broadcasting rights from 2004 to 2007. However, the company has to tighten its belt a bit more until it starts to recover and more job cuts are expected at its Paris headquarters by the end of the year. In an interview with Le Figaro, Canal Plus' new Chief Executive, Xavier Couture, was reported as saying that the group's central costs needed to be brought into line with its more modest ambitions. For 800 of 3,500 staff to be employed at the holding level was "disproportionate", he said.
Vivendi Universal's Canal Plus is paying a steep price, according to analysts, to regain sports rights exclusivity, which it has been sharing since 2000-01 with its satellite pay TV rival TPS, owned by broadcasters TF1 and M6. The deal is E180 million, 60 per cent, higher than what the company paid for the soccer rights that run until the end of 2003.
For its part TPS is set to file a complaint with French and European competition watchdogs, claming that it was unfairly treated in the auction. The complainants are aiming at recouping at least some of the rights it shares with Canal Plus, it was reported.
Patrick Le Lay, TF1 Chief Executive, told sports daily L'Equipe in an interview, "It is wrong to give anyone a monopoly. It is against competition rules."
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Government OKs BSkyB fees
The UK Government is set to announce that the BBC and other public services must pay for their channels to be carried on BSkyB this week. The BBC has previously said that public service broadcasters should only pay a nominal amount for their channels to appear on the satellite service, but the Government looks set to back Rupert Murdoch's BSkyB this time.
A senior executive at a terrestrial broadcaster was reported as saying, "Every British government is scared that if they don't roll over for Murdoch, there'll be trouble. What we wanted them to take into account is that we're free-to-air public service broadcasters and we have to make ourselves universally available."
In the draft Communications Bill, published earlier this year, the Government did signal that it was considering a 'must carry' obligation on Sky for public service broadcasters. This obligation is already imposed on the cable companies.
The BBC, ITV and Channel 4 wanted a 'must carry' obligation imposed on Sky in the Communications Bill, to be published this week. The Bill will instead stick with the current system for 'conditional access' to Sky.
BBC Director-General Greg Dyke has threatened to take BBC channels off Sky unless the satellite service is forced to carry its stations at cost. ITV already pays E27 million a year for its slots on Sky and the BBC fears a massive escalation in its charge, which is due for renegotiation next year. The actual costs to Sky of encryption and transmission for carrying ITV or the BBC are thought to be just E313,456 a year.
However, Sky has been pressing ministers forcefully against 'must carry' and the Government has now decided to drop the idea.
Not all are
happy news for Murdoch. US TV guide business, Gemstar-TV Guide, is facing
an antitrust lawsuit from the US Government. The US Department of Justice
(DoJ) has told Gemstar it believes it engaged in unlawful activities ahead
of its merger with News Corp's TV Guide in July 2000. It alleges the two
companies co-operated illegally before the merger.
Rupert Mudoch's News Corporation owns a 43 per cent stake in Gemstar.
In the last year Gemstar has been plagued by accounting errors and poor
financial performance, contributing heavily to News Corp's E6.9 billion
financial loss last year.
Under US antitrust laws, merger partners must continue to operate independently
until their deal is consummated and cleared by federal regulators. Coordinating
operations beforehand is a violation known as 'gun-jumping.' Gemstar has
denied the allegations.
The department has offered to settle the case if Gemstar is willing to
pay a fine and agree to "certain other conditions and restrictions,"
Gemstar was reported as saying.
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Channel 4 new digital channel
UK terrestrial Channel 4 is said to be keen to make use of its space on Freeview and wants to launch a new digital channel called 'Channel 4 Extra' to counter the threat from BSkyB and the BBC.
However the launch won't be imminent and its content is still under discussion. The options are thought to be either a highbrow factual, education and documentaries channel or drama, music and soaps. Anyone with a Freeview set-top box will get the channel for free although it may initially carry only repeats.
Channel 4 shares broadcasting space on Freeview with ITV. But while the latter has three channels in ITV, ITV2 and ITV News, Channel 4 has just one. The BBC, by contrast, has seven of its own channels and two joint venture channels on the platform.
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Vodafone files overcharge claim against NTL
UK mobile giant Vodafone is believed to be suing debt-laden cable company NTL claiming that it is overcharging on its telephone line annual rent.
The mobile phone operator needs to rent traditional telephone lines from companies such as NTL, BT and Cable & Wireless as a part of its business. With this claim Vodafone is expecting to recover alleged "excess annual rent" paid and has said it wants to reduce the amount it pays in the future.
The amount in dispute has not been revealed.
NTL due to emerge from its Chapter 11 bankruptcy proceedings in the US by the end of this month after cutting in half its E20 billion debt in a debt for equity swap by bondholders. Although there is ongoing speculation about NTL wanting to merge with its rival Telewest, it's been reported that the company will rule out the deal for the foreseeable future.
Until now, a merger of the two companies has been seen as inevitable because they both operate TV and phone businesses in the UK but in different franchise areas.
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'Galaxy' digital satellite TV in HK By Owen Hughes
Securities house JP Morgan believes that the Galaxy direct to home digital satellite TV project for Hong Kong could be up and running by the third quarter of 2003. In a report released this month JP Morgan says that Galaxy’s owners, dominant Hong Kong terrestrial Television Broadcasts (TVB) are in discussions with an investor willing to take 51 per cent of the company.
That is the minimum that the Hong Kong government said that TVB must sell before Galaxy can begin operations because of its 90 per cent share of terrestrial viewing in the former British colony ahead of its only rival, Asia Television. It was to have sold its share by June of this year, but won an extension to February 2003, after which it must hand back the licence. If the deal is signed Galaxy, valued at E140 million, could be operating next year. The identity of the investor is not known, but earlier this year Malaysian DTH provider Measat was said to be once more in talks with TVB.
Measat was a suitor in 2001, but pulled out after deciding that the scheme was not commercially viable at the time. JP Morgan noted that TVB’s presentation contained the “most concrete” proposals it had seen up to that point. Yet it also cautioned that TVB has blown hot and cold about Galaxy’s prospects over the last 18 months and gave it only a 50:50 chance that it would be launched.
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Korea triples digital TV sells
Digital TV exports in Korea more than tripled in the first nine months of this year compared with the same period last year, the Korean Times reported.
According to the Ministry of Commerce, Industry and Energy (MOCIE), Korea’s digital TV exports between January and September this year amounted to 470,000 units or E590 million, up 330.1 per cent and 317.3 per cent, respectively, year-on-year.
MOCIE, presuming the sales will continue throughout the year, projects digital TV exports will reach 735,000 units or E890 million by the end of the year.
Yoon Sang-jik, a Director of MOCIE was reported as saying, "The increase in digital TV exports is because of the development of new designs by local electronics firms that are more in line with foreign tastes, as well as the heightened price competitiveness of the Korean products. The expansion of North American digital TV market is also a contributor to the increase."
The global digital TV market, is currently estimated at E6.7 billion and is forecast to grow to E34 billion by 2006, according to MOCIE.
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OpenTV low 3Q results
US-based interactive television company OpenTV reported a E11.8 million loss in revenues compared with last year's figures - the revenue totalled E13.3 million compared to E25.1 million for the quarter ended September 30, 2001
The reduction in revenue reflects continued weakness in the interactive television (iTV) market said the company.
EBITDA was a negative E13.0 million for the quarter ended September 30, 2002 compared to a negative E8.8 million for the quarter ended September 30, 2001. Operating results included impairment charges totalling E539 million related to goodwill and certain intangible assets and a restructuring charge of E1.6 million associated with closing the Company's Naperville, Illinois regional office, net of other restructuring benefits. They also included E97.7 million of goodwill amortisation.
Including these charges, OpenTV's net loss was E563.1 million, (or $7.81 per share), compared to a net loss of E118.5 million, or E1.71 per share, for the previous year third quarter.
Craig M Waggy has been appointed as OpenTV’s Chief Financial Officer, succeeding Scott H Ray. Currently Senior Vice President and Chief Financial Officer of Liberty Broadband Interactive Television, Inc (LBIT), a wholly-owned subsidiary of OpenTV’s control shareholder Liberty Media Corporation, Waggy will assume the OpenTV CFO position while retaining his duties with LBIT.
Mark H Allen has been appointed as OpenTV’s General Counsel, succeeding Jesse Berg. Currently Executive Vice President of Corporate Development and Deputy General Counsel for LBIT, Allen will assume the OpenTV General Counsel position while retaining his duties with LBIT.
Scott Doyle has been appointed to the newly created position of OpenTV’s Chief Intellectual Property (IP) Officer. Doyle currently serves as Senior Vice President and Chief IP Officer for LBIT, and will assume the OpenTV Chief IP Officer position while retaining his duties with LBIT.
Additionally, Matthew Disco has been promoted to Senior Vice President and Deputy General Counsel, and Mark Meagher has been promoted to Senior Vice President of Finance and Administration.
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Monday 18th November 2002
Ntl revenue hit by churn
EchoStar posts Q3 loss
Vivendi issues E1bn bonds
Toshiba gets TiVo technology
Increased autonomy for DT divisions
Philippine cableco cuts subs
BT Openworld broadband offers cashback
Ntl revenue hit by churn
Britain's biggest cable operator ntl, which should be emerging from Chapter 11 bankruptcy protection by the end of November, has reported its third-quarter results with another drop in customer numbers.
Although it is a smaller loss than the previous quarters, the desertion of 33,000 UK and Ireland customers is still significant. The decline in ntl revenues can be directly attributed to this fall in customer numbers.
As part of budget adjustments, the company is laying off 250 jobs which will contribute to a E31.4 million exceptional charge in the forth quarter.
However the company's EBITDA rose from E273 million in the previous quarter to E285 million, with the margin rising from 28 per cent to 29.5 per cent.
CEO Barclay Knapp admitted that ntl currently does not have the money to halt the subscriber decline, although he said that he fully expects ntl to return to subscriber growth once the operator completes its recapitalisation.
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EchoStar posts Q3 loss
The US' second biggest satellite company, EchoStar Communications Corp, posted a third-quarter loss as a result of rights granted to Vivendi Universal , when the French media company bought a 10 per cent stake.
The company posted a third-quarter loss of E168 million, compared with a year-earlier profit of E3.1 million.
Under the terms of the Vivendi deal, if EchoStar's average share price over a 20-day period fell below the E26.04-per-share paid by Vivendi, EchoStar would be obliged to pay Vivendi the difference.
EchoStar Chief Executive Officer Charlie Ergen acknowledged that the company faced an 'uphill climb' to complete the acquisition of its larger rival Hughes Electronics Corp for E19 billion, following rejections by US regulators. EchoStar remains committed to the deal, he said, although its focus is on proposing remedies that would win approval rather than defending the deal in court.
If Hughes abandons the deal after January 21, it could collect a E600 million break-up fee. In that event, EchoStar could be obliged to buy Hughes' 81 per cent stake in satellite service PanAmSat Corp for E2.7 billion.
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Vivendi issues E1bn bonds
Troubled Franco-American media conglomerate Vivendi Universal issued a E1 billion bond issue hoping to gather some funds ahead of a fight with Vodafone for control of French telecoms business Cegetel.
Meanwhile Vivendi's online division, VUNet USA, said it was cutting about 50 employees at its technology, music and media groups, which would leave about 275 people.
VUNet USA Music and Media have been built around online distribution of music and video, with sites like MP3.com, Getmusic.com and Rollingstone.com.
Some of the properties, like Emusic and Rollingstone.com were originally purchased by Vivendi's Universal Music but were then transferred to VUNet when it was formed in October 2001.
It's unclear which online properties will be absorbed by Universal Music or other Vivendi companies.
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Toshiba gets TiVo technology
Consumer electronics company Toshiba America has signed a licensing agreement with digital video recorder (DVR) producer TiVo Inc. Toshiba will incorporate TiVo's DVR technology in its products by the 2003 holiday buying season.
"We view DVR as a central component to the next generation of digital consumer products," Toru Uchiike, President of Toshiba America Consumer Products was reported as saying. "With the sophisticated, user-friendly navigation interface, TiVo is the DVR solution of choice. Toshiba views this agreement as an opportunity to develop solutions that support our vision and capitalise on the combined strength of the Toshiba and TiVo brands."
Although the DVR, which records TV shows on a hard drive instead of a tape, has been in the market since 1990 the technology is yet to reach the high expectations set on it. DVR is capable of pausing a live broadcast, zipping over ads, auto-recording any show choosen from a two-week display of TV listings. But TiVo and its rival, ReplayTV, haven't sold very well and at the moment are relying on licensing deals with the big electronics firms which, through their marketing machines, are expected to communicate the value of recording shows digitally versus using the old standby VCR.
Hard-drive recording technology is now making its way into cable boxes, personal computers and - with the introduction of machines from RCA and Panasonic - DVD players.
The RCA Scenium DRS7000N Digital Media Recorder is both a DVR and a DVD player, with a single remote control. It's also a progressive-scan DVD player. The listings service - to choose the shows you want to be taped - is free, whilst if using a TiVo or ReplayTV, this service costs a one-time charge of E250 (or E10 to E13 a month).
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Increased autonomy for DT divisions
Deutsche Telekom's new Chief Executive, Kai-Uwe Ricke is planing to hand over more management responsibility to the German operator's four divisions in a move to boost the businesses' cash-generation capacity and cut the group's debt, the FT reported.
The former German telco giant's COO, Ricke, who assumed the post of CEO on Friday, said he will maintain the company's structure and will not have any large disposals in the near future.
DT reported a E20.6 billion net loss for the third quarter, the biggest net loss in German corporate history, after it recorded E22 billion in asset write-downs, E18 billion of which related to its VoiceStream US mobile unit.
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Philippine cableco cuts subs
By Owen Hughes
Destiny Cable - a Manila-based cable TV operation - has slashed its monthly subscriptions to maintain market share after failing in a legal challenge to News Corp's STAR to force the platform to continue to provide five channels.
Destiny Cable was told by STAR that it would no longer be allowed to carry the five channels which are now going to be aired exclusively in the Philippines by Beyond Cable, the country's largest single operator.
Destiny announced that it will cut its subscription rates by 13 per cent to retain its sub base. The new monthly rate is E8.5, down from E9.7
Given the high number of operators in proportion to the total number of subscribers, competition can be cut-throat and operators will regularly cut their rates to the point when they cease to earn enough income to even cover the cost of content acquisition.
This results in the underreporting of subscriber numbers since operators are charged by the official number of people watching the system. In some cases 9O per cent of subscribers are not officially declared, according to the Philippines Cable TV Association.
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BT Openworld broadband offers cashback
UK teleco subsidiary BT Openworld has a series of cut-price offers on its broadband service for UK businesses until the end of the year. The ISP is abandoning the initial set up fees and equipment costs for its self-install Plug & Go product. This means free activation, free ADSL modem and ADSL filters - a saving of E236 for consumers taking its broadband offering.
Businesses signing up to BT Openworld's Broadband PLUS products could receive E204 cashback and companies subscribing to BT Openworld's 'Activation Only' service can also have the activation fee and cost of the ADSL filters refunded - E134 cashback.
Both cashback promotions are valid for any organisation that purchases one of BT Openworld's Business 500PLUS, 1000PLUS and 2000PLUS products in conjunction with the BT Openworld Internet Business Pack.
Tony Harris, President, Business Internet Services at BT Openworld said, "The present economic downturn is forcing businesses of all sizes to take a more prudent approach to cost control. These promotions make it easier for businesses to invest in broadband thereby increasing productivity and reducing costs - two key objectives for any business given the current business climate."
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