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NEWS Monday 14th October - Monday 21st October 2002
Scroll down page or click below for news - latest first
| Tuesday | |||||
Carlton/Granada agree £2.6bn
merger
Vodafone
bid for Cegetel
TW
Cable orders Sci-Atlanta's set-tops
Germany's Premiere deal with Warner
Korea teleco uses Windows for
VOD
Motorola
shares dive
Carlton/Granada agree £2.6bn merger
UK rival commercial broadcasters Granada and Carlton agreed terms for the E4 billion (£2.6 billion) merger. The two said a tie-up would lead to increased investment in programming, higher audiences and a greater reach for advertisers.
The combined group would achieve annual cost savings of at least E56 million a year, the companies said. In a joint statement, the two indicated there were overlaps in back-office functions, broadcasting, content and central services.
Michael Green, chairman of Carlton said, "One ITV has been a vision long in the making. One company, with one management and one focus, can now set its sights on firmly beating the opposition and giving viewers and advertisers what they want.
"I want this merger to mean great television programmes and the strongest possible schedule. We must make sure that it does just that."
Granada shareholders will take a 68 per cent stake in the new business and receive E319 million in cash. Carlton shareholders will initially hold a 32 per cent share.
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Vodafone bid for Cegetel
UK mobile phone giant Vodafone placed a E6.3 billion pre-emptive bid for Cegetel and France's second largest mobile phone network SFR , which was being eyed by struggling Franco-American media conglomerate Vivendi í which owns 44 per cent stake in Cegetel.
Vivendi wanted to buy BT's 26 per cent and SBC's 15 per cent but Vodaphone is offering E6.3 billion in cash for both stakes - E4.0 billion for BT's stake and E2.3 billion for SBC's.
The offers are the latest moves in an increasingly tense battle between Vodafone and Vivendi for control of SFR, sparked by the expiry of crucial 'standstill rights' between the four shareholders in September.
Vodafone has also made a non-binding cash offer of E6.77 billion to Vivendi for its 44 per cent interest in Cegetel, open until 30 October 2002.
Vivendi has the right to pre-empt either or both of the BT and SBC interests until 10 November 2002. Pre-emption would be made in cash on the same terms for the BT interest and at a 13 per cent premium for the SBC interest.
If Vodafone acquires both the BT and SBC interests, it would obtain control of Cegetel and SFR.
France is the only important European mobile market where Vodafone does not have a controlling stake in its mobile operations. So far it has 20 per cent of SFR and 15 per cent of Cegetel, which in turn owns 80 per cent of SFR. With this deal Vodafone would control a mobile network in each of the five largest European markets.
"We believe that SFR's natural home is within the Vodafone Group, where it can fully benefit from being part of the leading global mobile operator. Whilst we are not obliged to do so, we have made an equivalent cash offer to Vivendi which would enable it to realise value for its shareholders from its investment in Cegetel. On the other hand, should Vivendi wish to maintain or increase its interest in Cegetel, we would be happy to continue working as partners in France, as we have been doing since 1988."
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TW Cable orders Sci-Atlanta's set-tops
Time Warner Cable will purchase a mix of Explorer set-tops and other headend equipment to meet projected consumer demand for digital cable and interactive TV services to be deployed on their networks, including video on demand (VOD), subscription video on demand (SVOD), personal video recording (PVR), and high definition television (HDTV).
In this latest deal, TWC will purchase 100,000 of Scientific-Atlanta's new Explorer 8000 home media servers, which feature a hard drive for PVR applications, such as time shifting and program recording, and dual video tuners which will allow subscribers to either watch TV and record another program or to record two programs simultaneously.
To meet the demand for high definition television and the devices that support it, Time Warner Cable will also purchase 50,000 of Scientific-Atlanta's recently announced Explorer 3100HD set-tops. The Explorer 3100HD will decode all 18 ATSC high definition digital formats for HDTV presentation, as well as standard definition digital and analog video services.
The remainder of Time Warner Cable's set-top order will be for 475,000 Explorer 2100 digital set-tops, which are today enabling millions of subscribers nationwide to access a variety of interactive TV applications, including VOD, SVOD, email, Web browsing, chat, and e-commerce.
"We have an aggressive plan in place to deploy VOD and SVOD services by the end of next year," said Mike Hayashi, senior vice president of Time Warner Cable. "We expect significant demand for these new services as well as for new services such as personal video recording and high definition TV. With our expanded platform of services and set-top offerings, we expect to continue to differentiate ourselves relative to our satellite competitors and to reduce our subscriber churn going forward."
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Germany's Premiere deal with Warner
Warner Bros. International Television Distribution (WBITD) has signed a pay-per-view and pay television deal with Germany's Premiere.
The deal includes pay-per-view rights to a package of films, including 'Harry Potter and the Philosopher's Stone,' 'The Lord of the Rings: Fellowship of the Ring,' 'Training Day,' 'Swordfish,' 'Rush Hour 2,' 'Der Kleine Eisb¸r' ('The Little Polar Bear'), and 'Cats and Dogs' as well as the pay television rights to a selection of films that include 'Swordfish,' 'Training Day,' and 'Miss Congeniality.'
WBITD said, "By making this deal with Premiere, we are pleased to help them maintain their promise to subscribers to supply the best of Hollywood films in the marketplace, first, unedited and without interruption and, as a result, aid in their ability to sustain, and possibly grow, their subscriber base."
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Korea teleco uses Windows for VOD
South Korea's largest telco, Korea Telecom, will use Windows Media 9 Series to power its new video-on-demand service, HomeMedia.
Streaming to over four million users, the service will take advantage of the world's highest rate of broadband penetration to deliver content. HomeMedia will take advantage of the FastStart technology, 5.1 surround sound audio and new codecs that come with Windows Media 9, essentially becoming the first VOD service specifically tailored to a broadband market.
The service will launch with over 2000 films, many of them local titles, as well as some television programming, and will stream direct to PC, or TVs via special wired or wireless connections available from KT, to allow content to be viewed at the viewer's preferred location.
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Motorola shares dive
Against a generally rising market shares of Motorola sank 21 per cent on Wednesday after the semiconductor and wireless handset maker cut its earnings forecasts for the next quarter and fiscal 2003, blaming a further slowing of demand from wireless, broadband and semiconductor companies.
Sales for the fourth quarter were now expected to be E7.1 billion, compared with previous forecasts of E7.5 billion, with chip sales flat compared to the third quarter, the company said on Wednesday. Net profits would be 4 cents per share, down from previous guidance of about 10 cents per share. The Illinois-based company also cut its wireless handset forecast for 2002 to 390 million from a pervious estimate of 400 million.
For 2003, the company said sales were expected to be E27.5 billion, producing net profits of 40 cents per share. During Wednesday afternoon trade the stock was down 21.3 per cent at E7.95.
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Pickard
appointed at ITV
OpenTV halves staffing
C4 axes 200 jobs
TiVo
broadcast short films
BBC bid for F1?
TW launches On-demand
Pickard appointed at ITV
UK terrestrial broadcaster ITV has appointed former BBC executive Nigel Pickard, as its new ITV Director of Programmes, beating off internal competition from head of drama, Nick Elliott to replace David Liddiment.
Clive Jones, the joint managing director of ITV said, "We have gone for a different approach. Nigel has strong management skills and he will take a team approach."
Among challenges to be tackled are improving daytime ratings which are continuing to slip. It is reported that programming controllers who had been expecting a ruthless clearout had Dawn Airey, the Channel 5 boss, been hired, now feel that changes will not be so drastic.
Mick Desmond, who shares the managing director role with Jones, said he was already working on the network structure in anticipation of Pickard's arrival.
The appointment will not be threatened by further, post-merger shake-ups in the ITV management structure says the company.
Granada and Carlton Communications, the two main ITV companies, had just agreed a E4 billion merger, though they accept that there are significant regulatory hurdles to overcome in relation to reducing advertising competitiion, with some analysts putting the chances of the deal being passed at 50:50.
One of the company's advertising sales houses may have to be spun off as the combined company will own around 55 per cent of the commercial TV advertising market.
"Granada and Carlton will be discussing with the regulators appropriate arrangements for the sale of airtime by the merged group which, to the extent necessary, may extend to a separate sales organisation," said the companies in a statement.
The deal also needs the current draft communications bill to be passed next year, removing limits on broadcasters controlling more than 15 per cent of the commercial TV audience and from owning more than two London ITV licences.
If the deal happens ahead of the law change, Carlton's broadcasting licences and its 20 per cent shareholding in the ITN news service would be held in a separate company, which would then merge with the rest of the newly created broadcaster, to be called ITV plc.
Granada shareholders are set to own 68 per cent of the merged group and receive E316million in cash while Carlton's shareholders will get a 32 per cent stake.
Granada said that a merger should generate around E55 million in cost savings by the end of the first year from eliminating duplicated infrastructure and administration in broadcasting, content and central services."
"One ITV has been a vision long in the making. One company, with one management and one focus can now set its sights firmly on beating the opposition and giving viewers and advertisers what they want," said Michael Green, Carlton chairman and designated chairman of ITV plc.
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OpenTV halves staffing
Following its purchase by Liberty Media this year OpenTV is to undergo a comprehensive restructure of its global operations with 47 per cent of the workforce being cut.
The aim is to drastically cut costs and achieve efficiencies associated with its recent acquisition of Wink Communications. As a result, OpenTV estimates it will reduce its overall headcount by 315 positions, or approximately 47 percent of its total workforce, and it will close eight regional offices. These cuts follow 57 redundancies announced earlier this year. Wink will continue to operate as a separate subsidiary of OpenTV.
The global restructure is expected to be completed by the end of the first quarter of 2003, initially resulting in annual cost savings and a cash expenditure reduction of approximately E60 million and E48 million, respectively, beginning in the second quarter of 2003.
OpenTV estimates that this restructuring initiative will result in a pre-tax restructuring charge of approximately E29 million, of which E20 million will represent cash obligations. This charge is in addition to an estimated pre-tax restructuring charge of E4 million associated with the previously announced closure of the company's Naperville, Illinois office, and an estimated restructuring cost of approximately E4 million associated with Wink.
OpenTV Chief Executive Officer James Ackerman commented, "We believe these cost-cutting measures will result in a more efficient and focused company that will be well positioned to serve our customers and our goal of achieving long-term growth and profitability. We will continue to enjoy one of the best - if not the best - teams of engineers, software developers and other employees in our industry. This team has created products that are distributed to over 35 million homes in over 45 countries and, as a result of our new strategic position and focus, we expect our team will continue to help us grow. We firmly believe that this plan will improve our ability to achieve operational and financial success on an accelerated basis and to create value for our shareholders, which is our ultimate responsibility."
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C4 axes 200 jobs
Channel 4 is expected to announce up to 200 redundancies today (17/10/02), with a wide-ranging clear-out of staff from the boardroom to the basement, reported the Guardian.
Bosses at the channel are trying to ease its precarious financial position. David Brook, Director of Strategy will be one of the casualties.
FilmFour's production arm is being folded into the channel's television drama department and as a consequence 50 staff have already lost their jobs. A further 100 to 150 will go from the Horseferry Road headquarters in London, where 1,000 staff are employed.
However Chief Executive Mark Thompson announced the winter schedule with a record programme budget in 2003 of E680 million, up four per cent on this year, with a bigger slice of the cake going towards original British drama. But he didn't specify any programming plans in particular.
Thompson was reported as saying that Channel 4 had lost its way with expensive forays into digital television such as the launch of the FilmFour and E4 channels - a strategy that would be put right. "Getting Channel 4 right is item one on the 'to do' list. We are rolling up our sleeves and getting on with it."
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TiVo broadcast short films
US-based TiVo agreed a deal with production company Standard Film Trust to showcase short films directed by celebrities and sponsored by marketers. The movies will be three to 15 minutes long and will be available to all TiVo's subscribers. The first of the films will be released December 29 and will run through to January 12 2003.
The alliance will give TiVo the ability to offer SFT's creative content to leading marketers who can use the short films as vehicles for branding and promotional campaigns on the TiVo service.
"We look forward to sharing with TiVo subscribers the innovative, creative and entertaining film-making that has been a hallmark of Standard Film Trust," said Mike Ramsay, CEO of TiVo. "Including this content regularly to our TiVo Showcases will further improve the TiVo experience for subscribers and add to the branding and marketing opportunities we can offer our advertising partners."
"With a TiVo audience of more than one million viewers, its clearly a unique opportunity for delivering our quality, celebrity-driven content to the TiVo audience so it's a very organic fit," said Standard Film Trust founder Robert Bauer. "Many of the people who have made short films with Standard Film Trust love their TiVos. Its very exciting to have this unique distribution outlet in place, so that we can now create our brand sponsored content with TiVo in mind."
TiVo has more than 464,000 US subscribers to its service, which is used with digital video recorders (DVRs). Since the programming content is stored digitally, viewers can pause, fast forward and rewind the content just as they can on DVD or VCR. Viewers can then watch the programming whenever they choose.
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BBC bid for F1?
The BBC has played down reports about its bid for the broadcasting rights to Formula One racing, reported the Guardian.
There have been talks about a E277 million bid for the Formula One rights currently held by ITV but a BBC spokeswoman said it is too early for the corporation to declare an interest in the rights which will not be available until 2005.
The corporation is determined to re-establish itself as a premium sports broadcaster, and it does not want to lose out on another high profile event after BSkyB and ITV won the bidding war for the Champions League earlier this month, the Guardian commented. Executives hope an offer of E277 million will bring the sport back to the BBC after eight years on a rival network, according to a report in today's Daily Mail.
ITV secured the rights in a five-year deal in 1997, paying a record E111 million - 10 times more than the BBC had paid previously. The bidding process, orchestrated by formula one boss Bernie Ecclestone, infuriated the corporation because it was not given the chance to better the ITV bid.
But ITV has struggled to maintain formula one as a ratings winner and audiences have dropped from six million at the beginning of its coverage, before Damon Hill retired, to an average of two million.
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TW launches On-demand
Time Warner Cable in the US is to make its Movies on Demand video-on-demand service available to half its 500,000 metro area digital cable subscribers within the next two weeks and the rest of its subscribers by the end of the year.
Users can pay E3.95 per movie, to download and watch over a 24 hour period, and be able to rewind, fast-forward or stop a film and then continue playing it, similar to a video rental - with the pause function seen by subscribers as a particularly desirable function.
"For the longest time, this is what our customers told us they wanted. Technology has finally caught up to what they want." says Barry Rosenblum, President of Time Warner Cable of New York City.
Other features include Subscription Video on Demand, for HBO, Showtime and other premium channels. Some basic cable channel shows will be available for on-demand viewing.
Digital video recorder capabilities will be added to the company's its set-top boxes in spring, with no additional hardware required, says the company.
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BCE 2002 - end of the line
DVB-T closing Hungarian digital gap
httv software manages iTV
BBC to launch DTV channels
Does sex appeal to Britons?
BCE 2002 - end of the line
By Tony Morbin.
This year the Broadband Communications Europe (BCE 2002) show at Olympia in London, which opened yesterday, appeared to have suffered every bit as much as the industry itself, with the event characterised by wide open spaces between the stands, and too few visitors filling the aisles, which meant the news that this was the last in its present format surprised no one.
At the accompanying conference, moderator Kate Bulkley summarised the catastrophic fall in valuations in the industry, with Liberty Media's purchase of the Dutch network Casema for E570 per subscriber being just a third of the highest valued Dutch cable sale.
Tony Werner, CTO of Liberty Media, answering questions after his keynote, was quizzed whether the earlier valuation of DT had been too high compared to what was paid for Casema. He countered that Casema could well be the high end of what such a franchise would fetch today, but the price offered for DT's franchises was a fair price at the time, and not just because the market climate has changed since then. Other factors include that the original bid had been on the basis of a digital integrated pay-TV system in which it would integrate level three and four cable systems - which was not going to happen this time, hence the latest bid was as a utility model.
In his speech Werner also promoted standards as a way of enabling companies to achieve the economies of scale needed to achieve profitablility, citing the Docsis cable modem standard as one of perfect timing. Advanced-television.com asked if this comment implicitly meant that it was too soon to mandate MHP. Werner responed, that while over time MHP could help create a natural platform, if forced it would increase the cost of set to boxes and hit both backward compatibility and forward migration, thus harming the market.
On acquisitions, Werner said that Liberty was, "Not expansionist at any cost - we're opportunistic. We like HFC (hybrid Fibre coax) but satellite might be better for some areas depending on the market," suggesting the company is now also looking at satellite oriented companies.
(Also see opening preview).
DVB-T
closing Hungarian digital gap
Hungary's digital gap can be reduced by DVB-T, said Gyorgy Csepeli, Secretary
of State of the Ministry of IT and Telecommications at the 2nd DVB-T Conference
of Antena Hungaria.
DVB-T is a new digital system that can carry four to six times as many
channels as the existing analogue carrier, with improvements in picture
and sound quality and facilities for interactive services, as well as
mobile reception.
However, implementing the technology without government aid was a practical
impossibility. Regulatory decisions are needed, as well as an introductory
timetable.
Antenna Hungaria said it is ready to assist in any plan, having been testing
its technology since 1999, and it intends to be the first to offer the
service in Hungary.
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httv software manages iTV
French set-top box applications provider httv, a technology and solutions
supplier for iTV in Europe, has released a range of publishing software
based solutions to create and manage interactive services, Prime TV.
Aimed at TV channels, content providers, network operators, producers
and interactive advertising agencies, Prime TV suite integrates all the
components required to develop any interactive services, authoring tools,
editing and scheduling tools, a production server and interactive player.
PrimeChannel enables users to build permanent or synchronised content,
but also to create events that allow viewers to participate with votes
and forums (SMS or e-mail via TV) and to play with iTV games and quizzes.
Paris Premiere, the number two French DTV channel, has chosen PrimeChannel
to create and manage its permanent interactive service.
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BBC to launch DTV channels
UK's BBC has the go ahead from the Department of Culture, Media & Sport for its plans to launch two new digital TV channels; UK History and UK Homestyle, despite protests that the corporation was breaching government policy.
The History Channel, backed by US giant the Hearst Corporation, presented the original complaint about the launch and it has been reported as saying that it was not going to let the matter drop and planned to lobby MPs.
Competitors had complained that the BBC's plans to launch the channels through its UKTV joint venture contravened a 1997 agreement in which it promised to launch no more than eight channels.
However, the DCMS has ruled that a later agreement, in November 2000, which was not publicised at the time, supersedes the previous agreement. It plans to write to the History Channel next week explaining the decision.
A History Channel spokesman argued there was no record of the agreement and that it hadn't been open to public consultation.
"If you can't see the approvals then how can you be sure that the BBC is following the guidelines. Perhaps the next step is to talk to MPs and other broadcasters," he was reported as saying.
Smaller satellite and cable channels are concerned that because UKTV relies on the BBC's back catalogue for much of its programming it has an unfair advantage over other channels.
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Does sex appeal to Britons?
UK Channel 4 is to broadcast some of the public's most intimate moments with a live interactive television event revealing the state of the Britons' sex lives, according to The Guardian.
Britain in Bed claims to be "the most complete audit of the nation's sexuality, relationships and sexual habits".
The project is part of the channel's bid to boost its audience figures in the face of sliding ratings.
Across all timeslots Channel 4's share was down 14 per cent in the first four weeks of the autumn schedule. Its peak time performance was even worse: down 20 per cent over the same period.
Last week the broadcaster sent shock waves through the broadcasting industry when it announced it was axing Brookside, the 20-year-old soap that defined the channel in its early days.
The new survey will quiz participants on every aspect of their sex lives in an attempt to track the nation's changing bedroom habits.
Channel 4 will unveil the results in a two-hour show at the end of November and Britain in Bed will also feature live experiments exploring the science of sexual attraction and video diaries exploring the intimate side of human relationships.
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BCE gets underway with brave face
ITV merger under fire
Granada to own Irish TV3
BSkyB broadcasts E!
PanAmSat pleased with 3Q
BCE gets underway with brave face
Broadband Communications Europe 2002 opened its doors this morning at
London's Olympia show halls with exhibitors determined to tough out the
worst recession most have seen in the broadband business.
The show, in its' third year after morphing to become BCE from the UK
Cable Association trade fair, is one of Europe's biggest broadband events
and therefore a bell-weather for industry trends. On that basis the forecast
isn't great as many big names are missing with budgets being cut across
the board. Nonetheless the consensus yesterday as exhibitors prepared
for opening, was that after the insanity of the dotcom expansion and over
valuations things had now gone too far the other way and recovery was
a question of 'when not if'. However few were willing - or able - to put
a timeline on the 'when'.
Advanced-television.com
is here throughout the show (stand 276 if you are visiting) and will bring
you all the news and views worth reading, and on Friday our Friday File
will contain a special report on the event and the sectors health having
taken the industry's pulse over the coming days.
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ITV
merger under fire
The weekend press in the UK didn't have to look hard for opposition to
the Carlton-Granada merger bid that was confirmed late last week.
Rival commercial broadcasters including Sky and Channel 5 complained the
combined company would have unfair leverage in the airtime sales market
and would be anti-competitive. Several major advertisers, including Proctor
& Gamble - one of the biggest - joined in saying they would raise concerns
with the Office of Fair Trading. Advertisers seemed unconvinced by proposals
that one of the merged companies sales houses would be 'sold off' to its
management.
Others pointed out that the merger remained outside the current regulatory
framework and there is no guarantee there will be new legislation to allow
the deal to proceed - although it is very unlikely it will not be included
in the legislation list for the next session of Parliament. Clearly, given
the new impetus in negotiations, the Boards of the two companies are set
on merger rather than waiting for legislation to allow overseas bidders.
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to top
Granada
to own Irish TV3
British media giant Granada is said to be set to double its 45 per cent
stake in independent Irish television company TV3.
The Sunday Times reported that Granada was in the middle of merger talks
to increase its stake in TV3 to 90 per cent. Under a deal struck in 2000,
Granada has the first option to buy the stake should it become available,
and is likely to do so.
Canadian company Canwest currently owns a 45 per cent stake in the channel,
and it is expected to put it on the market as it seeks to reduce its E2.7
billion debt. The stake is expected to carry a price tag of E50 million.
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BSkyB
broadcasts E!
British Sky Broadcasting will carry the US cable network E! Entertainment,
before the end of the year after which the platform's six million digital
homes should be receiving E!. It's been reported that the arrangement,
which is expected to be announced this week, is more of an overall programming
partnership than a simple carriage arrangement.
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PanAmSat
pleased with 3Q
US based PanAmSat reported that the company generated E199.1 million revenues
for the third quarter, EBITDA of E145.4 million, and earnings per share
of 14 cents during the third quarter.
The commercial satellite operator was happy about the results, saying
that EBITDA margins were in excess of 72 per cent for the third consecutive
quarter. Free cash flow was E350 million on revenues of E615.5 million
for the nine months ended September 30, the company said.
PanAmSat recently completed its E2 billion, 30-month, seven-satellite
fleet modernisation program. The satellite operator is poised to become
part of EchoStar whether or not the satellite TV company can complete
its merger with Hughes Electronics, which controls PanAmSat. However,
although Echostar is obliged to pay $2.7 billion for Hughes 81 per cent
share in PanAmSat, few commentators expect the full price to be paid.
Back
to top
Monday 14th October 2002
Echostar 'still focussed on the merger'
Vivendi's HQ move back to Paris
TVB cuts E50 million spending
Last French analogue broadcasting
DT job cuts
ish to upgrade German network
Single EU licence for Internet 'simulcasts'
Chinese TV vulnerable to hackers
Irish DTT bidder bows out
Echostar
'still focussed on the merger'
"We are still focussed on the (E18 billion Echostar/Hughes-DirecTV) merger
and will continue to pursue the FCC process," Marc Lumpkin, a spokesperson
for Echostar told advanced-television.com on Friday (11/10/02), confirming
that the satellite operator would be making an amended resubmission within
the 30 day appeal period set by the FCC on 10/10/02 when it rejected the
initial merger proposal.
Lumpkin declined to comment on the possible E600 million break up fee
that Echostar would have to pay Hughes if the deal collapsed before the
January 21 deadline.
Echostar has also set a date of October 28 with Charles James, the US
Assistant Attorney General, for a Department of Justice review as to whether
the deal violates antitrust laws.
Lumpkin also declined to speculate on whether Echostar would have to buy
Hughes' 81 per cent stake in PanAmSat Corp for E2.7 billion in cash or
a combination of stock and debt should the deal fail, again reiterating
his belief that the deal would eventually go through. Though no details
were provided, it was clear that the focus would remain an emphasis that
a strong satellite provider was needed to compete with cable, which was
growing still stronger as new mergers such as AT&T and Comcast appeared
on the horizon.
"We will continue to work aggressively within the context of this FCC
process to achieve approval of the merger," EchoStar and Hughes said in
a joint statement. However, the Federal Communications Commission's unanimous
verdict that the deal would create a virtual monopoly, meant that the
chances of an appeal succeeding are slim. Kenneth Ferree, chief of the
FCC's media bureau, described agency staff's analysis of the deal's negative
effects on consumers as being "staggering."
"The record before us irrefutably demonstrates that the proposed merger
would eliminate an existing viable competitor in every market in the country,"
commented pro-liberalisation FCC Chairman Michael Powell. The FCC vote
was the first in which the commission has blocked a major media merger
since 1967.
It was a move welcomed by The National Rural Telecommunications Cooperative
(NRTC) whose spokesperson, Kelli Laski, commented, "We were opposed to
the deal from the beginning as it would be a monopoly for the 22 million
Americans without access to cable television or DSL. As the FCC noted,
competition is better than regulation at ensuring consumers are not faced
with high prices and declining services; regulating prices would require
the set up of a regulatory body and still not be as efficient as competition."
Echostar and DirecTV have a joint total of 18 million subscribers, and
it is estimated that about 12 million of those are in rural areas where
there is no pay TV alternative.
Rupert Murdoch's News Corp remains the most likely bidder for DirecTV,
should the deal fall through - with News Corp shares rising 42 cents,
or 4.8 per cent when the news broke. It is expected that News Corp would
not bid as high as last year when it was outbid by Echostar when striving
to build a global satellite network, and may not be able to bid before
March 2003 as the review could extend beyond the January 21st deadline
which had been set for the Echostar deal.
General Motors is selling Hughes to make up a shortfall in its pension
fund.
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Vivendi's
HQ move back to Paris
Troubled French media giant Vivendi Universal is reorganising the company
by moving its headquarters from the US back to France and cutting 327
jobs.
Vivendi's ousted CEO Jean-Marie Messier moved his office from Paris to
New York last year. His plan was to transfer large parts of its management
to the company's Park Avenue offices in Manhattan.
The company's aim is to redefine and refocus the headquarters tasks on
holding company activities, and concentrate all those tasks in Paris,
with New York becoming a representative office for the company, primarily
responsible for functions relating to North America. Full-year savings
of around E140 million are targeted, compared to a total 2002 budget of
E313 million.
These savings will be generated by a significant cut in non-payroll costs
(fees for external services, in particular), as well as a reduction in
the number of employees at all headquarters sites. Almost half of the
327 job cuts will be in Paris.
The move coincides with meetings last week between Vivendi management
and investment banks advising on a E12 billion disposal programme - which
included the recent E893 million agreement to sell Italian pay-TV arm
Telepiu to US News Corporation, and a further disposal this week. The
company wants to sell the remaining international assets of its Canal
Plus television business; its entire publishing operations, Vivendi Universal
Publishing, which is valued at between E3 billion and E4 billion; and
a minority stake of its games business.
*Meanwhile, Vivendi's iTV company CanalPlus Technologies, which is being
sold to Thomson Multimedia, has completed the upgrade of the conditional
access system of three of its digital pay TV customers - in Spain, Poland
and Italy.
The company says that a new version of MediaGuard, CanalPlus Technologies'
conditional access system, has been successfully deployed in these countries,
and will soon be introduced in France. The smart card swap operation is
reported to have run extremely smoothly, with no negative impact for subscribers,
despite the large number of homes involved.
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TVB cuts E50 million spending
By Owen Hughes
Hong Kong's Television Broadcasts (TVB) has cut back on its planned expenditure in the Galaxy direct to home satellite TV platform as the domestic economy continues to falter.
Brokers from CLSA who met with TVB executives said that they were planning to reduce the original E200 million plan down to perhaps as low as E150 million. The development comes as TVB, also the dominant of Hong Kong's two terrestrials, faces lower advertising revenue from the local market.
TVB was given an eight-month extension to February 2003 for a government-mandated sell off of at least 50 per cent of its stake in Galaxy. The condition was imposed because of TVB's leadership in the free to air market when it was issued a licence in July 2000. Several would-be buyers have walked away from the negotiating table since that time, prompting TVB to seek an extension.
The brokers indicated that TVB was still committed to taking part in the pay TV project and claimed to be close to agreeing a deal with a western investor to take a 51 per cent stake in Galaxy. According to reports, TVB is seeking to remain the largest shareholder in Galaxy and is also said to be looking for a third party to take a stake in the DTH plan, although CLSA said it had heard similar comments from the company in the past.
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Last French analogue broadcasting
By Sotires Eleftheriou
This summer the French broadcasting regulator, the CSA, authorised several local TV channels to begin broadcasting at the end of October on the last available analogue frequency, channel 35, for a renewable period of six months.
The channels will time share the frequency. No authorisations were given by the CSA during the run up to the recent French elections. Just 2.5 kW of power is allowed, which is considerably less than the mainstream channels but nevertheless very much more than previous temporary authorisations. "This level of power, coupled with the fact that we will be allowed to broadcast from the Eiffel Tower, means that we will be able to reach a fair proportion of Paris and the surrounding towns," said Michel Fizbin, President of ZALEA, (Zone d'Action pour la Liberte d'Expression Audiovisuelle), one of the asssociations that has been authorised.
Zalea had carried out some pirate transmissions earlier this year, which had brought down the wrath of the CSA which issued summonses and called for the transmitting material to be impounded. However, Zalea very publicly handed its transmitter over to the CSA when it argued its case for a DTT frequency in June. The CSA has now buried the hatchet and has suspended all proceedings against Zalea.
Zalea's programme content is drawn from a wide variety of sources: material supplied by associations, programmes from production houses that have been refused or censored by other channels, and its own content which is generally critical of mainstream television.
Problems remain. One is the financing of the transmission costs. Zalea's annual budget is very low, less than E1million, all of its staff are unpaid volunteers. Fizbin called on the general public to make donations, but also for support from the government, the City of Paris, and for the public services company Caisse des Depots (which recently acquired the transmission services company TDF from France Telecom) to waive its fee of E0.5 million as part of its social and cultural activity.
Another problem is that the cable operators are refusing to carry the channel. The 'must carry' regulation does not apply to temporary channels. Furthermore, Noos has been operating a policy of cabling collective dwellings for a token fee (E1 a month) to provide the terrestrial channels while ensuring a high penetration of cable outlets for future subscribers. These homes will not be able to get the new channel, nor any future DTT channels unless they take out a cable subscription, or use an indoor aerial.
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DT job cuts
German teleco Deutsche Telekom is reported as saying that it might cut 46,000 jobs - 16,500 more jobs than earlier announced.
One-fifth of the workforce, could be shed by the end of 2005 of which 35,000, would be from Germany, said a spokesman.
The daily newspaper Die Welt had reported that there could be additional cuts that would bring the total number to as many as 55,000. But a spokesman described that figure as a "worst case scenario."
DT plans to cut its E64 billion debt burden to E50 billion by the end of 2003. However whilst it had been expecting to sell its cable TV network for E3.5 billion, the bids it received have been in the range of E 2 billion to 2.5 billion.
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ish to upgrade German network
Callahan Associates' ish cable company in Germany has agreed with its bankers for E200 million receivables to be waived, and E115 million to be provided for further upgrades to the North Rhine Westphalia system - though there will also be 480 staff redundancies.
A new investor in ish is also being sought. Some 1.1 million digital homes in Dortmund, Bochum, Cologne and greater Dusseldorf are to receive high speed Internet and roll out of digital TV to a potential 5.5 million subscribers starts in 2004. Further network upgrading, to 510MHz, is also restarting.
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Single EU licence for Internet 'simulcasts'
Europe-wide TV broadcasts via the Internet have been simplified thanks to new European Commission regulations allowing anti-trust exemption for one-stop agreements for licensing TV and radio music via the internet.
The aim is to create a legitimate marketplace for 'simulcasting' by granting broadcasters a single 'one-stop shop' licence from royalty collecting agencies which will cover internet broadcasts across most of the 18-nation European Economic Area (EEA). This would replace the old system where they need to secure a licence from each national copyright administration and collecting society.
It is intended that this should create competition among the royalty collection societies, reducing their fees.
Competition Commissioner Mario Monti said, "Consumers will be able to access their favourite radio and/or TV music programmes from virtually anywhere in the world. At the same time, the framework put in place ensures that the rights-holders will be properly paid."
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Chinese TV vulnerable to hackers
By Owen Hughes
Members of the banned spiritual movement Falun Gong are placing China's leaders on edge in the run up to the ruling Communist Partyés national congress later this month by continuing to hack into state run satellite-delivered TV channels.
Chinese officials revealed this week that after numerous interruptions of programmes on cable TV systems and nationally-distributed channels by inserting videotapes into studios and control rooms, that Falun Gong supporters had taken over three of the 38 transponders on the flagship Sinosat 1 built by Aerospatiale and launched in 1998.
China's official news agency Xinhua said technicians had hacked into the long-distance learning channel for an hour on 9/9/02 and on three subsequent occasions by gaining access to the correct codes and frequencies. Sinosat admitted that it will be vulnerable to attacks until a new satellite is launched in 2004.
Officials are concerned that transmissions of the showpiece party congress could be interrupted by programming advocating Falun Gong, which was banned by the Chinese in 1999 as an 'evil cult.'
Beijing said the infiltration had been sourced to a dish farm outside of the Taiwanese capital Taipei. Taiwan is regarded by China as a renegade breakaway province and the claim is also a chance to score political points in China's ongoing claims that it will return the island to 'the motherland.' Taiwanese officials denied the accusation after sending investigators to the site in question.
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Irish DTT bidder bows out
The sole Irish digital terrestrial television (DTT) bidder, It's TV, a consortium headed by former RTE Executive Peter Branagan and including venture capitalists Delta Partners has decided not to pursue its application to launch a 40-channel TV and high speed Internet service - for which public broadcaster RTE expected to provide transmission capacity.
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