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NEWS Monday 10th - Monday 17th June 2002
Scroll down page or click below for news - latest first
| Tuesday | |||||
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Kirch
faces final curtain |
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Kirch faces final curtain
Germany's Premiere World boss George Kofler must have sighed in relief when German banks agreed to another E100 million cash bridging loan until new investors were found for the German digital pay TV venture, whose parent Kirch Pay TV filed insolvency some weeks ago.
Negotiations with Hollywood major studios are now reported to be in their final phase. However, there is not so much good news for the larger Kirch organisation which has to deal with E6.5 billion of debts. The only two parts of the former mighty media group that had not filed insolvency, the umbrella holding company Taurus Holding and Kirch Beteiligungen, have done so this week (Wednesday 12/6/02).
Also the takeover of the controlling stake in Kirch Media by a group of the German publishing conglomerate WAZ, the bank Commerzbank and the SONY owned Hollywood studio Columbia Tri Star is in question once again as its member can't agree on the conditions. Both WAZ and Columbia are said to intend to lead the investment while the bank refuses to finance to acquisition of the German First Soccer League TV rights.
However Commerzbank confirmed that it is interested in the asset and is open to additional investors. Also a takeover could work without WAZ; the bank thus indirectly confirmed rumours about differences in the investor's group. However, apparent indecision is nothing new for the German TV industry given its current state of disarray.
*French TV broadcaster TF1 has approached KirchMedia minority shareholders about bidding for the company's assets. Its most valued asset is a 52.5 per cent stake in free to air broadcaster ProSieben SAT.1 which was put up for sale in April. There are reported to be some 80 bidders for the Kirch assets.
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Liberty makes Telewest bid
US cable investor Liberty Media, a 25 per cent equity holder in UK cableco Telewest, is reported by the FT to have bid E370 million cash for a further 20 per cent stake in the company.
Telewest's E8.25 billion debts have led to fears - now expectations - among shareholders of a debt for equity swap similar to that at NTL, contributing to the company's share price crash from £5.0 to 5p (E7.8 to E 0.078) per share over two years. In addition, while the market value of the company has fallen from E18.65 billion to just E225 million over the same period, company bonds with a face value of £3.6 billion (E5.6 billion), are trading at less than the 44 per cent of face value which Liberty has bid. In view of the US cable bond crash, this is the only bid on the table.
The extent of Liberty's bondholding is not known, but if it obtains 30 per cent, it is expected to be able to veto any terms of restructuring, ensuring it maintains the value of any equity stake (as it has at UPC in Holland). It is reported that distressed debt specialists have been buying Telewest bonds recently.
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Life is not 'iesy'
German cable operator isey in the state of Hesse, is making 170 jobs redundant, the second former Deutsche Telekom cableco to make cuts.
The subsidiary isey services GmbH with 100 employees, which had planned to market the new triple play offers, will shut down, and another 70 jobs will be lost in the Frankfurt headquarters. Plans to introduce interactive digital TV and telephony to some 1.1 million Hesse cable homes have been postponed until an undefined future date.
Given the current market situation, the company says it would need to reasses the market before making further investment. Fast internet access will only be available in some parts of Frankfurt where contracts with technology providers can't be cancelled. These cuts are a reaction to the dire financial situation of the dominant shareholder NTL which, with other investors, acquired 70 per cent of Kabel Hessen GmbH (NTL's share being 35 per cent) some two years ago. In a surprise move three weeks ago, NTL fired the entire management and replaced them with NTL staff.
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ITV/Channel 4 in 'payTV-lite' offer
The cut down pay TV DTT package offering proposed by ITV and Channel 4 (see ATV archive) is to include a low cost pay element comprising about 10 channels, including E4, FilmFour and some Sky content, as well as Disney and Discovery channels. Consumers who want the upgrade will have to take all the channels offered.
The consortium is bidding in direct competition with the BBC and BSkyB, who are proposing a free-to-air package of channels (again, see ATV archive). The operation will be run as a separate commercial entity to ITV and Channel 4, and will be led by David Chance, former deputy Managing Director of BSkyB.
* The ITN News channel will be relaunched later this year as the ITV News channel, following UK terrestrials Granada and Carlton Communications buying out ITN's 65 per cent stake in its loss-making 24-hour news channel, expected to form a key part of any bids to provide a new digital network.
Granada and Carlton each own 20 per cent of the broadcast news group, with one of the two expected to increase its shareholding to 40 per cent when new media laws are introduced next year. Granada and Carlton will not be allowed to own 40 per cent each, so their shareholdings are likely to merge when the two companies complete an expected merger sometime over the next 18 months.
Clive Jones, the Chief Executive of Carlton Channels and joint Managing Director of ITV said, "This deal demonstrates ITV's commitment to news. The channel will have the same high quality news production values as ITV News, complementary scheduling and will provide a real alternative to Sky News and BBC 24."
ITN's news supply agreement with ITV runs until 2009 and is worth around E11 million a year to ITN. Cable operator NTL owns the remaining 35 per cent of the channel. Last November, ITN signed a six-year deal worth more than E311 million to supply news for ITV1.
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SFB/ORB Ready to Merge
The German public broadcasting networks SFB in Berlin and ORB in Brandenburg are preparing to merge.
This has been made possible by the legislators of both Lander (regions) agreeing to an accord previously signed by the states' governors. However, there is still loud criticism, at least regarding some of the conditions of the deal, with fears that the Brandenburg location is weak in comparison to the strength of Berlin. The German capital surrounded by Brandenburg territory.
The merger is not a new idea. It was already was on the agenda when the merger of both Lander was planned shortly after the re-unification of Germany. When the political merger failed negotiations for the media merger were also cancelled. However, both ORB and SFB are relatively small networks within the ARD conglomerate, facing a financial shortfall and a lack of influence within the ARD, which is why the issue is now back on the agenda.
ARD is the largest German public broadcasting conglomerate combining both radio and TV services and is formed out of nine regional networks within the Lander. ZDF, being the largest TV network in Europe, and is a much clearer structured public broadcaster. Together ARD and ZDF receive annual funding of about E6 billion in fees, making it the biggest public broadcasting system in the world, despite Germany also having a mature commercial TV and radio industry.
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German
cable initiative made
Germany's commercial TV channels have launched an initiative to foster
the future of the cable systems which Deutsche Telekom was not allowed
to sell to Liberty Media.
Upgrading of these nets is seen as essential for the German TV providers,
commented Karl-Ulrich Kuhlo, the founder of the German news channel n-tv
in a German newswire interview. The initiative now is to try and get regional
cable operators and financial investors to take over the Telekom assets.
Also the commercial TV stations would be willing to take a smaller stake
in the asset.
Negotiations are also under way with the public broadcasters ARD and ZDF.
International investors would not be willing to comply with the conditions
dictated by the German antitrust watchdogs, and so only a national solution
is possible Kuhlo said.
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IDTV
launched in Taiwan
Taiwanese joint venture company Era Digital Media has unveiled its flagship
- the multimedia IDTV (intelligent digital television) platform.
IDTV combines digital broadcasting, broadband transmission, Internet web
casting and satellite/cable to provide a real-time interactive platform
for access to news, entertainment and sports programming.
The service is designed for use by Taiwanese homes as cable operators
digitise the domestic cable network that serves nearly 80 per cent of
homes on the island. It may also put pressure on the government to allow
cable operators to increase the officially-imposed ceiling on subscriber
fees because of the extra revenue generated by IDTV.
At the end of 2000 Taiwan's powerful multiple system operators were on
the verge of rolling out broadband services that would cover the island.
But the subscription cap, allied with the lack of legislation to police
the new media and economic recession curbed infrastructure investments.
Era Digital Media said that included in the package is access to services
such as TechTV, BBC World, Fashion TV, Bloomberg TV, the Weather Channel,
TVBS-N and movies. Other planned services include Eranews and CNN-fn.
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New
Executive Director for Pace
Pace Micro Technology plc has appointed Neil Gaydon, as a board member,
becoming regional Director for the Americas.
Gaydon, who has been with Pace since 1995, has spent the last three years
heading development of the company's US business, securing long-term supply
contracts with two of the largest US cable MSOs, Time Warner Cable and
Comcast Communications. He leads a team of around 100 people to support
and grow Pace business in North and South America from Pace's US office
in Boca Raton Florida.
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S-A
boosts Asian presence
Following the strategic acquisition of BarcoNet in late 2001 by Scientific-Atlanta,
the
company is expanding its focus on the Asia marketplace by naming David
Wheeler as country manager for Australia and New Zealand.
The company's integrated strategy of products, systems and services are
being deployed under the banner of 'Stronger Connections, Broader Possibilities.'
Wheeler's selection for his new role is described by the company as being
indicative of how the company is maintaining its past relationships while
creating and strengthening new ones.
"We have spent months analyzing how to blend the Scientific-Atlanta and
BarcoNet products into a unified, versatile offering that meets the needs
of customers around the world," said Wheeler. "We have harmonised the
product development roadmaps and understand the markets for the comprehensive
product line we now offer. We will continue to meet the needs of all customers
that both organisations have served in the past and new customers will
be delighted when they see how our total solution can help them deliver
the high-performance, high-quality television services consumers want."
Wheeler will be based in Sydney, returning to his native Australia following
previous assignments with Scientific-Atlanta in Australia, Singapore and
the US. Most recently he served as senior director, marketing for Scientific-Atlanta's
Media Networks business unit - responsible for world wide marketing of
the PowerVu’ digital video distribution system.
Scientific-Atlanta views Australia as an advanced broadcast and cable
market populated by consumers who are early adopters of new technologies
and applications.
Scientific-Atlanta says its experience in providing the systems and launch
support to enable cable operators to launch interactive TV services will
play a key role in rolling out these services to Australia's consumers
as operators seek to provide new services and develop new revenue streams.
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|
BBC
joins Sky DTT plan
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BBC joins Sky DTT plan
Rupert Murdoch's satellite broadcaster BSkyB and the UK pubcaster the BBC are reportedly teaming up to create a digital terrestrial television (DTT) service to replace the recently-collapsed ITV Digital.
If they succeed in their bid this will be the first joint venture between the two companies. A third partner, Crown Castle Communications, will provide transmitter expertise for the venture.
Previously the BBC had plans to create a consortium with rival broadcasters such as ITV and Channel 4 to bid for the DTT licences. After failing to agree on a formula on how to divide up the licences the BBC broke ranks with the rest of the consortium
When ITV Digital administrators decided to suspend their service, having failed to find either the money to settle its bills or a buyer for the business the Independent Television Commission invited applications for the licence that it took back from ITV Digital.
The deadline is 5.0 pm today, (Thursday 13/06/02) and the ITC has promised to give its verdict by July 4. BSkyB and the BBC are presenting an application to the regulator for licences to run a free-to-air digital television service that would be funded by a mixture of the BBC's licence fee and advertising, and would be available through simple receivers (set tops) costing viewers less than £100 (E160).
Channels expected to be included in the proposed service are understood to include Sky News, Sky Sports News and Sky Travel, from the satellite broadcaster, as well as BBC Four, BBC Choice and BBC News 24. Sky One may be added at a later stage.
It is thought that BSkyB is keen to concentrate on the free-to-air end of the digital terrestrial market, after deciding that the regulatory problems of trying to launch pay-television services in the sector would be too great.
Carlton and Granada will still apply for licences together with Channel 4. Carlton and Granada are interested in offering free-to-air services but Channel 4 is seeking to ensure coverage for its subscription services E4 and FilmFour.
The UK Evening Standard newspaper reports that BSkyB and BBC are working in co-operation with David Chance, former Deputy Chief Executive of BSkyB and a non-executive director of Granada. Chance is working with City backing on proposals for a 'pay-lite' offering a modest number of relatively inexpensive channels covering sport and movies.
The proposed service would be designed for those who do not want to pay for expensive subscription television packages; it would be complementary to the Sky offering.
Separately, Alan McKeown, the former owner of SelecTV has just arrived in London from Los Angeles, trying to interest the major American television broadcasters in digital terrestrial television in the UK. He was previously an unsuccessful bidder for the Channel 5 licence in the UK.
McKeown said, "I believe this presents an extraordinary opportunity and I have been trying to get the Americans involved."
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Telewest rebellion crushed
Unions and shareholders at E8.24 billion indebted UK cable television operator Telewest condemned the award of bonuses totalling E1 million to senior executives, despite the value of Telewest dropping from E18.65 billion two years ago to just E225 million today, 1,500 staff being made redundant over the past month, and following a year described by Chief Executive Adam Singer as an "extreme disappointment," in which the year's results were viewed with "severe frustration."
Shareholders at the group's annual meeting in central London on Tuesday (11/6/02), said the bonuses should have been refused - or paid as shares in the company - as they repeated fears that the company could follow rival NTL's lead and restructure in a debt for equity swap to shareholders' detriment - a move Telewest's Chairman, Anthony Stenham admitted was an option. Singer added to the fears, commenting, "Can one rule out a debt for equity swap? No, one cannot," increasing speculation that just such a deal will occur, possibly this year. Stenham's only concession to shareholders was that Telewest's remuneration committee, which decides the size of year-end bonuses, would bear the shareholders' comments in mind when drawing up next year's payments.
All the directors were reelected, despite a call by the National Association of Pension Funds, urging institutional investors to abstain from re-electing Singer and finance director Charles Burdick. Many shareholders also voted against reappointment of 25 per cent shareholder Liberty Media's representatives as non-executive directors after their refusal to comment on speculation that Liberty Media had bought Telewest bonds.
Stenham also reiterated the support for a merger with UK lead cableco rival NTL saying, "We have always said that we see a great deal of industrial merit in a merger with NTL and they have said the same. When that will come I do not know."
At is financial results meeting the same day NTL's Chief Executive Barclay Knapp, concurred saying, "We have existed side by side at the top of this heap for a good three or four years, each of us is fully capable of not doing the merger and having a successful business but it is a good idea and some day it might come to fruition." NTL says it is on course to emerge from bankruptcy in September on schedule, but in another statement, comments, "Although our current business plan includes a reduction in the number of new customers and an increase in revenue from existing customers, our cash constraints present many challenges to the successful execution of the plan," suggesting that its financial restructuring, announced last month, might not be completed in time to save the business (see report, ATV news archive).
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Major reshuffles at MTG
Modern Times Group, MTG, one of Sweden and Scandinavia's leading media groups, is once again, having a clean sweep, this time aimed at TV3, the pan-Scandinavian generalist TV station which also operates in the Baltic countries. After a disappointing last half year, with reducing figures with regard to ratings, reach and revenues, MTG is now carrying through several management reshuffles, a classical measure within that group. Some months ago the Director of Programming at TV3, Staffan Erfors, was removed and now the top executive of the station, Goeran Klercker, MD since last summer, will have to leave.
Instead Petter Nylander, currently head of the content division of MTG's broadcasting arm Viasat, will return to the MD's chair at TV3, which he left to be promoted some years ago.
"TV3 is an important company for MTG, and needs full attention for the time being. It certainly has been a tough year. During our recent discussions within MTG it apparently appeared that I was wanted to take over the helm," Nylander comments.
Michael Porseryd, also a former MD of TV3, has been moved from being head of MTG Publishing to take charge of TV8, MTG's business and documentary service.
Instead of Erfors, who has been exiled eastwards to supervise MTG's increasing TV empire in Russia and Hungary, Calle Jansson, current MD of MTG's youth and music service ZTV is being installed as acting director of programming at TV3.
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Neun Live breaks even
The German participatory channel Neun Live recorded an operating profit for the first time in May. It is a first for the seven year old venture that used to be the Murdoch owned TM3 channel and only got its new owners and concept a year ago.
The participation channel which now is jointly owned by ProSiebenSat.1 Media AG and HOT networks AG is getting its money from two business fields: iTV - still via the good old telephone line, advertisements and T-commerce. In iTV 17.2 million calls contributed to the May results; gross revenues from advertising rose to E1.7 million and travel sales worth E6.1 million were made via the tourist brand, providing travel windows on Neun Live and other channels such as on the news channel n-tv. However, in prime time there will be friction again in the future.
The daily live show 'Tanz Marathon' (Dance Marathon) with 200,000 calls every day will be replaced by 'Denver Clan' (including an iTV quiz segment) once the show is finished after June 22. The positive news comes at a time when former HOT CEO and chairman Georg Kofler was said to be intending to sell most of his 10 per cent stake in HOT to concentrate on his new Premiere pay TV project.
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RTL and Warner
German commercial TV flag ship RTL Television is in negotiations with the Hollywood major studios to acquire a film package. It will contain blockbusters like 'Matrix', 'Harry Potter' and 'Lord of the Rings' for seven runs each. This was confirmed by a network's spokesperson last week. According to news reports the value of the package will be E211 million. In 1996 RTL had signed an 'Output Deal' with the studio granting all new product to the network. However, the new deal will only cover films that have already finished production.
European networks are currently trying to avoid output deals, because they don't like to buy 'blind', without knowing how the film is likely to be received by the audience.
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Chinese centralise data content
China's broadcasting regulator has announced plans to deliver content over a state-owned fibre optic network - part of a strategy to unify the nation's fragmented cable TV industry.
China Data Broadcasting Network will broadcast content from Beijing and plans to attract up to one million users in three years, according to General Manager Zheng Yi.
China Data Broadcasting's parent company China Cable Network is 75 per cent owned by the State Administration for Radio, Film and Television (SARFT). The idea is that cable operators can tap into a single source of content, rather than relying on their own satellite dish farms to access programming.
Observers have also pointed out that the move reflects the government's desire to offer a single source of programming that can be easily controlled at source, rather than giving the operators a choice about what they carry. It will also position the cable sector to be an ISP once China relaxes it laws to remove the monopoly of Internet provision currently enjoyed by the fixed line telecos.
China Cable Network said in December that it had a war chest of nearly E528 million to buy scores of local cable operations in order to build a subscriber base for its content. The company can provide financial and stocks information, distance learning, TV entertainment, games, sports and news viewed either on PCs or TVs, according to Zheng.
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Irdeto in Taj TV deal
Content protection and management company Irdeto Access has concluded a licence agreement with Taj Television Limited for delivery of its content protection system Irdeto M-Crypt.
Taj Television Limited, a UAE based television services and content provider, went live on air on 01 April 2002 with Ten Sports, an exclusive 24 hour sports entertainment channel tailor-made for the Indian subcontinent. A huge increase in subscribers and cable operators has been seen since the kick-off of the 2002 FIFA World Cup for which Ten Sports acquired the broadcast rights.
Irdeto M-Crypt, a compact conditional access system developed by Irdeto Access, provides Taj Television with advanced encryption capabilities and enables the company to securely and directly deliver Ten Sports to authorised customers while managing access to that content. The system is installed in Dubai, UAE.
Ten Sports reaches audiences in India, Pakistan, Sri Lanka, Nepal, Bangladesh and the Maldives. Apart from live and classic cricket, the channel broadcasts the 2002 FIFA World Cup and other popular sporting events including British Open Golf, Manchester United Football and Formula 1 racing.
Chris McDonald, Chief Executive Officer, Taj Television Limited, said, "Since its launch Ten Sports has been very successful. Due to our content we already have thousands of cable operators passing through our channel to their vast cable subscriber base in India and the rest of the sub continent. A reliable content protection system is a necessity. For us Irdeto Access is the right partner."
"Irdeto Access is pleased Taj Television has chosen Irdeto Access' content security system to protect Ten Sports' high profile sports channel. We are happy to have a role in supporting their business plan growth. This agreement strengthens Irdeto Access' position in the South Asian market," says Graham Kill, Chief Executive Office, Irdeto Access.
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Simply TV appointment
Sian Ellis-Thomas has been appointed Director of Business Development at the UK's Simply Television, joining the company from Flextech Television's Business Development division. Her role includes expansion of the Simply Television core business, from traditional retail output, to diversify focus to include production, licensing, rights management, and channel development.
Ellis-Thomas spent five years at Flextech Television, where she was responsible for building and managing their home shopping business, Screenshop. She oversaw all aspects of running the channel before its sale for E15.5 million last year. More recently she was Commercial Manager for Flextech's digital interactive health channel, Living Health. Prior to joining Flextech, Ellis-Thomas oversaw the sales and marketing for the Revelation Film Group.
Simply Television plans to further diversify its offering, having grown from its 2001 launch to run seven themed shopping channels on the Sky platform. Simply Television recently acquired Phoenix Television Ltd, primarily a producer and distributor of Television News & Current Affairs programming, for an undisclosed sum.
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NTL reorganises, enhances DTV
UK cableco NTL, which is currently undergoing refinancing with part of the company filed for Chapter 11, has announced its Q1 results on Tuesday (11/6/02 - see below) and is currently improving its digital television product to boost subscriber numbers.
NTL included a statement that under its recapitalisation and reorganisation plan, a steering committee of NTL's lending banks and an unofficial committee of its public bondholders (holding over 50 per cent of the face value of NTL and subsidiaries' public bonds) have reached an agreement in principle on implementing the terms of the recapitalisation plan to strengthen its balance sheet, reduce debt and put an appropriate capital structure in place for the business. In addition, France Telecom and another significant holder of its preferred stock has also agreed to the plan.
July 12 2002 is set as a court hearing date to consider approval of the reorganisation disclosure statement.
Under the proposed recapitalisation plan, approximately $10.9 billion (E11.55 billion) in debt will be converted to equity in two reorganized companies - NTL UK and Ireland and NTL Euroco. In addition, some bondholders have committed up to $500 million (E530 million) for new financing for NTL's UK and Ireland operations during the recapitalisation process, subject to final approval by the court.
Q1 figures show revenues of E974 million and EBITDA of E267 million from continuing operations - increases of seven per cent and 107 per cent, respectively, compared to the first quarter of 2001.
NTL Home's first quarter results from continuing operations included revenues of E528 million and EBITDA of E208 million, increases of seven per cent and 68 per cent, respectively, over the same period last year.
Network operating expenses and selling, general and administrative expenses in the first quarter were approximately E264 million lower than the comparable period last year. NTL ended the quarter with approximately 2.8 million on-net customers, 108,000 off-net customers and 5.6 million service units. Monthly ARPU (average revenue per unit) was £40.07 (E62.24) for the quarter, an increase of £3.07 (E4.77) per month as compared to Q1 2001 - though down on Q4 2002 due to seasonal factors. NTL says that the increase in ARPU was a result of the combination of successful upsell efforts for digital cable and broadband products and price increases.
Over 250,000 customers take NTL's broadband Internet services, with its premium 1-megabit service launched in March 2002 serving nearly 4,000 customers.
Customer churn has declined to 17.9 per cent in Q1 from 21.3 per cent in Q4 2001.
On 29 May the company launched an enhanced version of its digital TV service with25 new TV channels, 17 new radio channels as well as a new look to its Interactive and EPG services, with more features and enhanced functionality.
Stephen Carter, Managing Director of NTL explained that the company is improving every aspect of its digital TV. He said, "This is a shot in the arm for digital cable TV and more great news for our customers. It's simply better digital TV."
Amongst the channels that will join NTL digital TV services are: Discovery Health, Discovery Kids, Discovery Wings, The Biography Channel, Smash Hits, Q, Kiss, Kerrenag, Magic, UK Food, British Eurosport News, Sky Sports News, B4U Music and B4U Movies. The radio channels will include 12 BBC stations.
NTL Business' Q1 2002 revenues increased 10 per cent to E234 million as compared to Q1 2001, and EBITDA increased to E87 million, up 37 per cent from Q1 2001.
NTL Broadcast's first quarter results from continuing operations included revenues of E76 million and EBITDA of E39 million representing growth of four per cent and nine per cent, respectively, from the same period last year.
NTL Broadcast now comprises two main businesses: (1) broadcast transmission services for digital and analogue television and radio; satellite and media services for programmers, news agencies, sports broadcasters and production companies including satellite uplink, studio playout and outside broadcast services (Media Solutions) and (2) rental of antenna space on the Company's owned and leased towers and sites and the provision of associated services to a variety of carriers operating wireless networks (Wireless Solutions).
In March 2002, NTL Broadcast won an E62 million, ten-year renewal contract to continue transmission of the S4C television channel across Wales.
Its satellite services business continues to grow, having already passed 200-channels. In the first quarter, NTL's satellite uplinking services signed contracts with channel providers amounting to over E1.55 million per annum in revenue including three-year deals with ESPN and Zee TV.
NTL Broadcast has won further digital radio orders from Score Digital covering two areas in Scotland (Ayrshire and Dundee/Perth). The 'design & build' contract, requiring no capital investment by NTL, was combined with a 12-year maintenance agreement.
Wireless Solutions is reported to be performing well in its core activity of providing shared sites and installation services to the mobile communications industry as demand for radio sites continues to be steady.
Revenue for NTL's TV programming subsidiary was E11 million in Q1 2002, representing a 40 per cent increase from Q1 2001. Losses attributable to Classic Sport have been reduced, resulting in EBITDA for Q1 of - E3.1 million a 33 per cent improvement over Q1 2001.
UK capital expenditure from continuing operations was E156 million in the first quarter 2002, a reduction of approximately 60 per cent compared with the fourth quarter 2001. NTL Europe's first quarter results from continuing operations included revenues of E124 million, a three per cent increase from Q1 2001, and EBITDA of E32 million, a 31 per cent increase from Q1 2001.
NTL Europe currently consists of wholly owned Cablecom (Switzerland), and NTL Ireland (Cablelink), as well as equity investments in B2 in Sweden (34 per cent), Noos in France (27 per cent) and iesy (formerly known as eKabel) in Germany (32.5 per cent). Under the proposed terms of the recapitalisation plan, NTL's investment in Noos will be transferred to France Telecom and NTL Ireland will become part of the new NTL UK and Ireland company. At Cablecom in Switzerland the EBITDA margin increased from 22 per cent in Q1 2001 to 27 per cent in Q1 2002.
NTL's refinancing agreement reached with its banking syndicate requires NTL to engage UBS Warburg by 31 August 2002 to advise in connection with an outside investment in or sale of all or part of the Cablecom group.
NTL Ireland has successfully achieved its major objective of making its digital television service available to over 85 per cent of its networks in Dublin, Galway and Waterford.
Capital expenditure at NTL Europe from continuing operations amounted to E22 million for Q1 2002, a reduction of over 60 per cent compared with Q4 2001.
NTL also stated that it does not know of any facts that would support allegations in class action lawsuits against some officers of the company accused of failing to disclose financial details of the company ahead of filing for Chapter 11, and the company said it intends to defend the lawsuits vigorously.
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Premiere
sporting success
Both the world soccer championship and the Tyson vs. Lewis boxing fight
have contributed to a run on Premiere World subscriptions in Germany.
Kirch Pay TV, the parent company of Premiere, has already filed for insolvency
and the funding of the digital platform itself is expected to run out
by the middle of this month unless a bridging loan is granted till negotiations
with potential new investors are finalised. The mega sports events have
enabled Premiere to gain some 2,500 new subscribers each day, boosting
the subscriber base which for the last two years has remained almost static
at 2.4 million. The boxing duel also caused a boom in pay per view bookings.
Almost 200,000 subscribers booked the boxing fight in advance to benefit
from the early booking discount of E10.
Premiere says that regardless the inconvenient hour of the event more
than eight per cent of its subscribers booked the event while in the USA,
where the timing was much better, both the US carriers HBO and Showtime
only attracted only about five per cent of their clients for the event.
* TV set sales internationally have jumped 30 per cent thanks to the World
Cup, expected to push units sold this year to 1.5 million up from 1.3
million last year.
TV sales have grown by up to 30 per cent in the lead up to and during
the World Cup, market leaders said yesterday.
Hiroshi Oshige, President of Toshiba Thailand, said that demand for television
sets from April to June had jumped between 20 to 30 per cent over the
same period last year.
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Callahan debt respite
Deutsche Telekom AG is giving a four months respite to the Callahan Group to pay for the acquisition of the ish cable systems in North Rhine Westfalia and Baden Wurttemberg, German news reports state.
Callahan had bought 55 per cent of the NRW and 60 per cent of the BW systems two years ago. The NRW operation made about 700 jobs redundant two months ago. By the end of August a new investor is hoped to be found for a cash injection of another E120 million to 150 million. In 2001 the operator accumulated a E3 billion debt. Without the DT respite ish would have been forced to file for insolvency early last week, sources from the ish head office in Dusseldoef were quoted as saying.
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Run for Viva
AOL Time Warner is rumoured to be willing to take over control of the German music TV group Viva Media AG. There were similar rumours previously that the venture's biggest competitor in Germany and other European markets, MTV, was intending to take the same route. The facts behind the rumour are that the group needs a clearer structure in its ownership to succeed in its strategy of international expansion, according to Viva's founder Dieter Gorny in an interview.
The largest shareholders are currently AOL Time Warner, Vivendi Universal and EMI who hold 15.3 per cent each. Another 18.2 per cent is held by the group's early investors and another 11.1 per cent was given to the management of Brainpool Media AG after the merger last year. Some 24.2 per cent is publicly held.
AOL is also involved in a 50:50 joint venture, Viva Plus, the group's second music channel in the German market. The Group also is said to have pooled its stake with that of the founders, thereby collecting over 30 per cent of the votes. Gorny stated that whoever gains control in Viva in the long term may also be interested in becoming a stronger player in Germany which would be possible due to the Kirch crisis. In the first quarter of 2002 Viva earned a profit of E18.1 million, partly was caused by the sale of the Viva Plus stake to AOL.
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Foxtel/Optus link to cost E791
Foxtel has priced the cost of its proposed link up with fellow Australian pay TV provider Optus at E791 million - although there is no firm date from government regulators when they will announce their assessment of the accord.
Foxtel Chief Executive Kim Williams said the deal involving the sharing of channels and the bundling of the services with telephony and the Internet was "a relatively expensive transaction."
Estimates of the cost of taking on Optus' content commitments, including deals with Hollywood studios that include minimum subscriber guarantees which have been a major factor in keeping the Australian industry in the red, total more than E317 million.
An equal sum has been suggested by brokerage Salomon Smith Barney as the price to Foxtel of leasing capacity on 14 Optus satellite transponders over 15 years. Foxtel's 50 per cent owners, the dominant telco Telstra, has capped its cable build at 2.5 million homes, and anyone outside that service will have to subscribe to Foxtel's direct to home satellite service.
Regulators assessing the Foxtel/Optus deal announced in February may announce their findings at the end of June, although no firm date has been given.
Williams said that their decision is one of the factors dictating when Foxtel planned to start digitising its network. He also wants officials to negotiate an access tariff to the network for third parties to allow the investors, that also include News Corp and PBL, a commercial return on their investment.
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DSL
growth continues at full speed
DSL subscriber numbers worldwide grew by 20 per cent during the first
quarter of 2002, and showed an increase of 110 per cent over the previous
12 months according to new analysis by Point Topic. Japan and Norway recorded
the largest proportionate increases.
"Despite the problems in the telecoms industry, there were a fifth more
people in the world with DSL at the end of March than there were at the
start of the year,' said John Bosnell of point-topic.com. 'As more people
find out about broadband, more want it. That's why DSL more than doubled
during 2001.'
The analysis covers 28 operators that provided 79.1 per cent of the world's
DSL lines at the end of2001. If this proportion remained constant, the
world-wide total for DSL lines at 31 March 2002 would be around 23.8 million,
up from 18.8 million at the end of 2001.
DSL leader Korea Telecom showed a relatively modest increase of 6.2 per
cent over the last quarter, suggesting that it is beginning to approach
market saturation, although smaller rival Hanaro managed a respectable
13 per cent growth for the quarter.
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Chyron,
Liberate in iTV offer
TV software company Liberate Technologies is integrating broadcast technology
provider Chyron Corporation' television graphics software, Lyric, with
its Mediacast data broadcasting server.
The combined solution will enable the creation of content with embedded
triggers allowing, for example, real-time voting or betting, via the subscribers'
remote control. Using the combined solution programmes can also be previewed
before the programme is broadcast across an operator's network.
"This announcement will accelerate the growth of interactive content by
making it easier for content producers to make interactive programmes
and to test them before they are finished," said David Limp, Chief Strategy
Officer, Liberate Technologies. "Chyron is a leading developer of television
graphics and distribution systems and we're pleased to be working more
closely with them to bring about fundamental changes in how interactive
programmes are developed."
Lyric iTV graphics composition software is a TV centric tool for the creation
of interactive graphics for a variety of Set Top Box platforms. It has
been recently extended to permit the synchronisation of interactive triggers
allowing an interactive content producer to review a finished video clip
and to drop triggers onto a timeline. These triggers can now be exported
in real-time to a Liberate Mediacast Server allowing the real iTV content
to be displayed on top of the video clip.
The triggers can then be moved on the timeline to ensure they appear at
the correct moments, relevant to the on-screen action.
"Chyron's mission in this arena is to bring real world television techniques
to the iTV production process and the integration of Lyric iTV with Liberate's
Mediacast is an excellent example of this. We are delighted with the response
from Liberate and users of their London Pop TV lab and the opportunities
this integration offers," said David Ward, Chyron's VP Business Development.
The Liberate Mediacast Server is a data broadcasting server that allows
network operators to define, retrieve, and create content carousels, which
are then delivered to the Liberate TV Navigator client software. Using
a web-based distribution approach, the content carousels can be HTML/JavaScript
documents, images, or application-specific data.
Chyron has also become a PopTV Infrastructure Partner and its Lyric tool
is now available within the Liberate Content Studio for Liberate's Partners
to either develop or test new interactive programmes.
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Communications bill questioned
The first draft of the UK government communications bill has been drawn up, but the telecoms sector feels that some points have been left out. Communications company Cable & Wireless wants the committee scrutinising the bill to consider forcing BT to demerge its core, opening up its local loop to increase competition.
At the moment a panel of MPs and peers are working on the setting-up of super-regulator Ofcom to push for a fundamental change to the communications industry. C&W would like to see a decentralisation of the UK telephone network.
In its submission to the joint scrutiny committee C&W said, "In our view the UK market structure, dominated by an ever present, vertically integrated local loop monopolist, will never be fully competitive and therefore will not deliver choice, innovation and value for money to consumers."
Before the bill was drafted C&W said to the culture select committee headed by Gerald Kaufman that the market must be given the correct structure before it can be regulated.
Film Director Lord Puttnam chaired the joint scrutiny committee on Monday (10/06/02) hearing evidence on the bill from across the communications industry.
The bill proposed a consumer panel to advise Ofcom which members will be chosen by the head of Ofcom. BT said that the panel should be more independent with its members chosen by ministers.
The mobile phone industry has had its say as well. Orange, mmO2, T-Mobile, Vodafone and new entrant Hutchison 3G, in a joint statement to the committee said that they want Ofcom to regulate their industry using current competition law rather than any sector-specific approach. The companies warned of the danger that the telecoms industry is being ignored by the Bill.
Privately, many executives in the communications industry are becoming increasingly concerned that all the debate since the bill was published last month has been about its effect on the media industry.
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AOL VP from NBC
America Online Inc's new senior Vice President, product and programming, AOL Broadband, is Shawn Hardin.
Hardin was co-founder of NBC Television Network's Interactive Division and later executive Vice President for NBC Internet. He will report to AOL Broadband President Lisa Hook and oversee all aspects of product and programming for the AOL high speed broadband service, including overall product and applications development and the creation of the next-generation of broadband content.
"At AOL, we believe that what's exciting about broadband for consumers is not just the speed of the connection, but the level of convenience and more compelling content that speed will make possible. Shawn Hardin's job is to turn that promise into reality for consumers - shaping the next generation of the Internet with all of the convenience and ease-of-use that have made AOL the world's most popular online service," said Hook.
"With more than 34 million members, more than 70 minutes per day average usage, the resources of AOL Time Warner, and a hard-earned reputation for making it easy for anyone to take advantage of new technology, AOL has a tremendous head start on taking broadband to the mass market," said Hardin.
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Murdoch succession discussed
Lachlan and James Murdoch could share the future leadership of News Corporation, Rupert Murdoch has in an interview with the Financial Times. Murdoch senior reiterated that Lachlan, the elder son runing the company's Australian newspapers is the designated heir. But James Murdoch's success since taking control of Star TV were also praised, with Rupert Murdoch saying, "I think they are very close and they will get on extremely well. It [the future leadership] will be more shared than it seems at the moment."
News Corp number two Peter Chernin remains Murdoch's choice to step in to run the company if the News Corporation Chairman was unable to do the job in the short-term.
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Kirch
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Kirch bids in
A consortium including Sony's movie studio, US-based Columbia TriStar, wants to take control of the film and TV arm of debt-laden German media empire Kirch Gruppe.
Columbia has been in talks with Commerzbank - Germany's third largest bank - and German publisher Waz about jointly bidding for Germany's largest free-to-air broadcaster, ProSiebenSat1, as well as a library of film rights.
It is said that Waz Group is also interested in acquiring the 40 per cent stake from Axel Springer - which last week Kirch gave to Deutsche Bank as loan security. Suspicions are that Waz wants the Springer stake to gain full control later on. That might be the reason why the major shareholder the founder's widow, Friede Springer who controls some 50 per cent, is resisting any approach from the publishing group. Deutsche Bank's lawyers said last week that Kirch had until the end of August to try to sell the business for more than the value of the loan - E720 million - or the bank would step in.
The Springer stake is controlled by KirchBeteiligungen, which is the only part of the German empire that has not yet filed for protection from creditors. Springer already holds a stake of just under 12 per cent in ProSiebenSat1 and it has been mentioned as a possible buyer of KirchMedia.
Rupert Murdoch's Fox TV network and films business had expressed an interest in parts of KirchMedia, but this new attempt by the Sony-backed consortium could damp its powder in the German market. The alternative would be to become part of the consortium before it is too late - investment bank UBS Warburg is understood to be organising an auction of the business.
KirchMedia, the core business of Kirch Group, was the first part of the empire founded by Munich-based media mogul Leo Kirch to go under. It filed for insolvency at the end of January, filing for protection from its creditors in early April. It is expected to be put into formal administration before the end of the month.
As well as owning television rights to the current and 2006 World Cups, KirchMedia holds a 52 per cent stake in ProSiebenSat1, the country's top commercial broadcaster.
Although bids were not expected until late summer, there was speculation that Columbia TriStar, Waz and Commerzbank were ready to table their offer this week.
Laws blocking US buyers in the European market are set to be lifted, opening up the options for companies like Columbia. But this is not going to happen until next year which might result in a delay on the consortium's intentions.
The three companies are understood to want to split the business between them with Waz taking over the day-to-day running of the company. Privately held Waz, which owns a number of regional German papers, has been buying publishing assets throughout eastern Europe. It also has a small stake in European TV broadcaster RTLwhich it has been looking to expand.
More than 50 companies are believed to have expressed interest in the German giant. They are rumoured to include Metro Goldwyn Mayer, Disney, AOL Time Warner and the Paramount studio business of Viacom.
The list of interested parties was due to be whittled down to a shortlist of about a dozen. KirchMedia's minority shareholders, who control just over a fifth of the business, are still trying to put together their own rescue deal and have until today to present a financing plan as an alternative to selling the company.
Kirch Holding, the parent company, which has more than 70 subsidiaries, has total debts of about E6.1 billion.
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Murdoch wins Italian dominance
Italian Communications Minister, Maurizio Gasparri said he had no objection to Rupert Murdoch's acquisition of Vivendi Universal's Italian pay TV operation, Telepiu, in a deal made Saturday (8/9/02 - See ATV archive report), which will see the company merged with Stream, a pay TV joint venture News Corp owns with Telecom Italia, giving the new venture an Italian pay TV monopoly.
As part of the deal Vivendi will suspend its legal action against New Corp, subsidiary NDS over allegations of pirating smart card technology, and News Corp will drop action against Vivendi over its reversal of plans to buy Stream. "In a few months, the transaction closing will bring an end to the mutual claims between our two companies, thereby attesting to our shared concern for establishing a relationship of honest competition between News Corp and Vivendi Universal," Vivendi's Chief Executive Jean-Marie Messier said.
News Corp is reported to be paying E650 million, plus assuming E550 million in debt (for future Italian Serie A football rights and for the sale of two terrestrial licences) and paying off a E300 million loan in five years (made by Vivendi to Telepiu). This would reduce Vivendi's E17.1 billion debt by E1.2 billion. It will also cut Canal Plus' losses by two-thirds - as Telepiu contributed E350 million to Canal Plus' E500 million losses. This would enable CanalPlus to develop its more successful platforms in France, Spain and northern Europe.
The FT reports analysts estimates of 3.5 million to four million customers being required for Italian pay TV to break even - compared to a combined total of 2.35 million for Stream and Telepiu. But such analysis does not fully take into account the reduced cost base of combined operations and the expected plunge in Italian TV rights costs, nor the anticipated hike in subscriptions that could be achieved where there is only one source of Pay TV soccer.
The transaction is forecast to close in 'a few months' subject to approval from News Corp's partner, Telecom Italia, and to regulatory approval. News Corp said it would ask anti-trust authorities to approve the Telepiu transaction under the same regulatory conditions imposed on its previous deal to sell Stream. News Corp is expected to own 50 per cent of the Italian pay-TV operation while the rest would be owned by other investors, possibly including Telecom Italia. However, Telecom Italia Chairman Marco Tronchetti Provera recently suggested that his group was considering selling its stake in Stream to News Corp.
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Management changes at CanalPlus
Xavier Couture, President of the CanalPlus group, has announced several management changes. Eric Licoys - named vice-chairman last month - has become chairman of the supervisory board of CanalPlus (CNLP), replacing Vivendi Chief Jean-Marie Messier.
Michel Denisot, who is in charge of the planned sports channel, has been appointed Vice Director General of the group. He remains in charge of sports.
Jean-Laurent Nabet, who joined the board of the CanalPlus Group when Couture took the reigns, becomes Director General of the group, the function that had been held by Denis Olivennes who was pushed into resigning two months ago.
Bibiane Godfroid, who had been in charge of all of the channels of the group, has "chosen to leave the group" according to the company, but remains President of CanalPlus Benelux for the time being.
Dominique Fagot, President and CEO of the distribution platform Media Overseas and president of CanalPlus Horizons, becomes Vice Director General of the group in charge of Benelux, Poland and the Nordic countries. Note that ahead of the Murdoch deal, the group's Italian activity (ie Telepiu) remains directly attached to the group's board. Francois Carayol remains president and CEO of CanalPlus Technologies but is no longer in charge of international distribution.
Dominique Farrugia, president and CEO of CanalPlus SA (the French premium channel) has appointed Virginie Calmels, formerly administrative and financial director of the channel, Vice Director General of CanalPlus SA, and Arielle Saracco, currently Vice Director of Programmes, to the post of Director of Programmes.
According to a report by the AFP, Isabelle Parize, currently head of Canal Satellite, will also be responsible for NC Numericable, the CanalPlus cable operator subsidiary.
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TVB cuts price
Reports from Hong Kong suggest that Television Broadcasts (TVB) has dropped the price of taking a half share in its direct to home satellite TV project Galaxy reflecting the increasingly difficult job it has trying to keep the project alive.
TVB was one of five entities granted a licence in June 2000 to provide pay TV to Hong Kong's population of seven million people. But it was made conditional on TVB selling half of its stake in Galaxy because of its overwhelming dominance of the free to air sector.
A range of suitors has been linked with Galaxy, and in early 2001 the Malaysian direct to home player Measat seemed certain to take 40 per cent. The deal collapsed because of recession in south-east Asia and since then TVB has been unable to find alternative buyers.
The project has been valued at between $400 million and nearly $700 million over the last 18 months. It is understood that TVB will cut up to a third of the book value of the project to ensure it does not go under.
The Hong Kong government is currently considering a request from TVB to delay the deadline for finding a buyer for the 50 per cent stake until February 2003. It is widely expected to drop the project if it does not win the extra time.
Galaxy's problems have again spotlighted the belief of many observers that it is not viable for a market the size of Hong Kong to support more than one pay TV provider. Out of the five licencees, two have dropped out, Yes TV has reportedly only a handful of subscribers and Pacific Digital Media (Hong Kong) has yet to begin commercial operations.
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Sky gets government distribution
In the UK apartment blocks have created a gap in the market for BSkyB because many landlords and councils forbid tenants to put dishes on the outside of their flats.
Outside the UK, particularly in Scandinavia, the solution is SMATV - high powered receiving satellite distributing Pay TV throughout the block. Now BSkyB has signed a deal with the Northern English city council of Leeds to connect 12,000 flats to SkyDigital.
BSkyB will replace old shared aerials in the blocks of flats with a new systems using a single satellite dish and aerial to serve each block. This integrated reception system also provides access to analogue television, digital terrestrial television, digital radio and FM radio.
The UK government's plans to switch off the analogue signal by 2010 does not have a specific strategy to deal with flats and shared dwellings - hence BSkyB has moved to provide a de-facto option, with further deals planned in the coming weeks and months. The digital terrestrial signal used by the ITV Digital service, is not strong enough signal to broadcast to shared aerials hence tenants in flats outside cabled areas, those with ADSL, or dwellings not allowed dishes have no digital option.
"The benefits of digital television should be open to all viewers, including the millions who are currently served by communal aerials," said Tim Wright, head of BSkyB's Sky Homes division.
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ITV Staff battle
Former digital broadcaster ITV Digital and its parent companies Carlton and Granada face a legal battle for between E1.5 millon and E3. Million from former staff of the DTT platform.
Some 140 former staff made redundant from the company's London HQ say they are still owed money by the broadcaster and claim they were dismissed without a proper consultation period.
The Guardian newspaper reports that the claimants, calling themselves the Ex-ITV Digital Employees Group, have appointed City law firm Hobson Audley to head their case. Solicitor Ravinder Mahal, who is overseeing the case, was reported as saying, "Under employment legislation and according to ITV Digital's own redundancy policy, these staff were guaranteed a proper consultation period of 90 days. But they were pretty much dismissed on the spot.
"Some of the staff are also entitled to payments as a matter of law which they have not yet received. We are hopeful these issues can be resolved amicably and will not have to go to the high court."
* An E154 million relaunch of the UK's ITV looks set to promote a uniform national indentity, replacing on-screen regional identities such as Granada with a single ITV1 'ident' with regional idents only used for local programmes.
Mick Desmond of Granada and Clive Jones from Carlton are now joint managing directors at ITV, replacing Stuart Prebble, the Chief Executive who resigned after the ITV Digital collapse.
The ITV1 programme budget for 2002/03 is reportedly being boosted from E1083 million to at least E1238 million, and possibly as much as E1315 million. An emergency E38 million has been agreed to boost to this year's budget.
It is estimated by the Guardian newspaper that revenue at the national networks has reached E8.48 billion, up from E7.3 billion last year.
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UK DTV soccer plans
The UK Premier League said that unless broadcasters offer enough money to screen its football games when the rights are next sold, it would set up its own subscription television channel.
The top 20 English football clubs will 'go it alone' if broadcasters try to use the slump in the value of TV sports rights to pay less than the league believes they are worth, warned Richard Scudamore, the league's Chief Executive.
Rupert Murdoch has already said that Sky overpaid by agreeing to give the league E1.7 billion between 2001 and 2004 - the most lucrative television deal in football history. When the negotiations for a new deal start later this year, BSkyB is likely to offer far less than the E567.5 million a season it currently pays.
Scudamore told UK trade press, "Next time round, rather than sell our rights to a broadcaster for them to sell on to households, the Premier League may do a deal direct with consumers, so that you can ring up [the] PL and say "I'd like to buy your Premier League channel with all the games on it for X pounds a month."
"It's technically possible for us to have a direct relationship with the consumer and retail straight to the home. We as FAPL-TV, or whatever, could contract with the consumer to provide their coverage. Doing that could be a practical, viable and profitable option. Digital television makes that possible."
"It's a question of the likely revenue compared to the complication of doing it. But the complication of doing it holds less fear than it's ever done before, because we have more expertise than before."
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Kirch
in extra time |
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Continued from front page ...............
Kirch in extra time
Kirch Group's demise, while still teetering on the brink of disaster, has gone into extra time.
Last Thursday(06/06/02), at a state court in Munich, Deutsche Bank gave the German media group three more months to repay a loan secured on a stake in the publisher of the country's top-selling newspaper.
By August 30th, Kirch will have to pay E720 million to the bank. The extension should allow the debt-laden broadcaster to look for buyers for the 40 per cent stake in Axel Springer Verlag, publisher of the Bild daily, to raise funds.
The bank is expected to claim the Springer shares and float them on the stock market to recover funds if the deadline is not met.
Kirch controls six national television channels and a huge film library and is sinking under debt after an ill-fated expansion into pay-television and marketing the rights to major sports events.
The company borrowed E1.6 billion to buy the rights to Formula One racing. The lenders were Bayerische Landesbank, Lehman Brothers and JP Morgan and they are hoping to receive some of the proceeds from the Springer shares, though Deutsche Bank has first call.
There is more than one shark in the pool circling Kirch. In the next two weeks several large US media groups are to meet their German counterparts to discuss joint bids for the assets of KirchMedia, the rights and television business of the collapsed Kirch empire.
Viacom, AOL Time Warner and Disney are all reported to be interested in ProSiebenSAT.1, Germany's largest free-to-air TV broadcaster, of which KirchMedia has a 50.2 per cent stake.
German bidding partners include publishing groups Bauer, Burda, Holtzbrinck, WAZ Gruppe and Axel Springer, itself owner of an 11.8 per cent stake in ProSiebenSAT.1.
At current market prices, the Springer shares are worth about E785 million, suggesting little would be left for the second-tier banks.
Kirch argues that Deutsche Bank had helped drive it towards ruin by publicly casting doubt on its creditworthiness and it has filed a lawsuit to prevent the bank from seizing and selling the Springer shares.
Kirch agreed to drop its opposition in return for more time, though a suit claiming damages from Deutsche Bank Chief Rolf Breuer for his comments about the company's financial problems still stands.
Meanwhile, people close to KirchMedia's minority shareholders - who together control 20.8 per cent of the unit - said the management had given them until June 10 to present a refinancing plan as an alternative to the auction.
Without such a plan, KirchMedia will be put under administration by the middle of next month and its assets switched into a new company, which would then be put up for sale free of existing liabilities.
"We will not have enough time, we have been doing due diligence, but we have not even looked at ProSieben yet," one shareholder was reported by the FT as saying. "My guess is the management cannot wait to create a new company."
"If these guys are trying to drag us into a competitive bidding process, they are wasting their time and over-estimating the proceeds. We have wasted too much time and money in Kirch."
Analysts believe that any serious bidders will be seeking to take over the entire business - without liabilities.
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Murdoch
Italian dominance?
Reports at the end of last week suggested that News Corporation group
could complete a E1063 million purchase of Italian pay TV operator Telepiu
from Vivendi Universal by today (Monday 10/6/02).
By combining with News Corp's loss-making Italian pay TV venture Stream,
Rupert Murdoch would dominate the Italian pay market - Stream has about
700,000 customers while Telepiu has about 1.6 million subscribers.
Such a virtual monopoly would be expected to stem losses incurred by the
two stand-alone operators. In 2001 Telepiu had losses of E208 million
and Stream lost E385.4 million - mainly due to escalating soccer rights
costs as the two bid against each other.
Last month Vivendi pulled out of a E385.4 million deal to buy Mr Murdoch
out of Stream when Italian regulators attached strict conditions to the
deal.
News Corp had already been reported (see ATV archive) to be in discussions
with Telecom Italia about a joint offer for Telepiu. Telecom Italia owns
50 per cent of Stream.
*Vivendi CEO Jean Marie Messier was criticised last week for taking a
bonus worth 250 per cent of his salary, pusing his pay to E5.12 million
after the company's EBITDA rose 30 per cent in 2001 - though the company
posted a net loss of E13.6 billion - the biggest in French corporate history.
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Liberty
buys Casema
Unconfirmed reports on Friday (7/6/02) said that an agreement has been
made for Liberty Media Corp to take over France Telecom's Dutch cable
TV company Casema.
Casema Chief Henk de Goede is reported by Broadband Banans to have told
Dutch TV that an agreement has been reached with Liberty.
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Tandberg cuts forecast
Digital broadcast technology company Tandberg Television has reduced its revenue forecasts from its April 23, 2002 prediction that revenues for Q2 would remain similar to Q1.
The company has issued a statement that with the weak market outlook and the substantial weakening of the British Pound to Norwegian Kroner rate, revenues in Q2 are estimated to be E32.319 million and gross margin estimated to remain at approximately 48 per cent.
The sales in GB£ remain at a 20 to 21 million per quarter level as in Q1, and the estimated loss after net financial items in Q2 is in the range of E3.36 to E4.03 million.
The outlook for the second half of 2002 is for revenues to be in the E32.319 to E36.359 million per quarter level. The company cost level is being managed so as to achieve a break-even on a revenue level of E35.013 million per quarter.
*Tandberg Television plans a five city roadshow in China during July, covering Shanghai, Guangzhou, Chongqing, Shenyang and Beijing. During the Tandberg Television cable tour the company's experts talk about the issues that impact the implementation of digital cable solutions to the home. The free of charge digital cable seminars will cover areas such as:
*How to implement an efficient digital turnaround solution
*Head-end selection criteria to guarantee future flexibility
*Issues to consider when selecting conditional access encryption, middleware and set top boxes
*Implementing value added services, such as Video on Demand and interactive applications
*Monitoring and management solutions that increase efficiency and thus reduce operating cost
*Deploying the regional head-end for digital cable to the home.
The display will feature all of Tandberg Television's solutions alongside new products such as the company's new multiplexer, the MX5210, specifically designed to offer flexible multiplexing for the operators of regional cable head-ends, in a cost-effective package suitable for regional cable operators in the Chinese market.
The tour dates are:
July 8th 2002 Pudong, Shanghai
July 10th 2002 Guangzhou, Guangdong
July 12th 2002 Chongqing
July 15th 2002 Shenyang
July 17th 2002 Beijing
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Singapore pay-TV monopoly ended
Singapore Cable Vision (SCV) will mark its seventh birthday this month with the lifting of its monopoly of pay TV in the island state.
Although its exclusive right to supply subscription TV via cable to Singapore's 3.5 million inhabitants runs out in June, observers said that only a change in the definition of what a pay TV provider is will create competition in the sector.
The Singapore Broadcasting Authority (SBA) has a blanket definition for pay TV, including broadband content offerings and video streaming on a PC, as long it has a defined schedule and a subscription is levied. It means that any would-be rivals to SCV have to meet its operating conditions, including a nationwide distribution.
Andrew Buay, CEO of Singapore Telecom's SingNet service said, "We are not interested in the current pay TV business at all, if it is based on the model run by traditional pay TV operators such as SCV. He added that the current definition of pay TV under SBA rules, "severely constrains any form of innovative services that can be introduced in the Singapore market, whether to the TV, or to the PC." SingTel is about to conclude an interactive TV trial to 200 homes.
Singapore is a socially conservative society, and it is unlikely to permit a pay TV operation to run important revenue drivers - gaming and adult services in a bid to boost subscriber numbers and encourage diversity. For many in the country when asked to assess the chances of a pay TV rival to SCV, the bottom line is that Singapore is a small market; after seven years SCV has accumulated 310,000 subscribers.
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Mandatory US digital standard
In order to meet the US broadcast industry's 2006 deadline to switch to digital broadcasts, the US government may mandate a copy-protection standard for digital television following the failure of US media and technology firms to agree one, a House of Representatives committee spokesman said last Wednesday (5/6/02).
Any industry-wide agreement was expected form the basis of a US federal law, but many issues have yet to be resolved as the industry fears a video Napster encouraging piracy of digital broadcasts.
"Frankly, we're a little surprised ... because we were led to believe that more progress had been made," said Ken Johnson, a spokesman for the House Energy and Commerce Committee.
The committee will meet with industry representatives this week, but says it will eventually develop legislation whether or not all the players had reached consensus.
"If those agreements aren't reached, you're going to see Congress step in. The transition to digital is going to happen one way or another," Johnson said.
In the working group's report, media companies and consumer-electronics makers agreed to implement a digital marker, called a 'broadcast flag,' that would allow consumers to record broadcasts for personal use, but prevent them from sharing those files over the Internet.
There was disagreement on several issues, including what constitutes personal use, and whether the format should be compatible with existing DVD players.
Philips Electronics and Microsoft Corp objected to the way the working group conducted its business.
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Production show hits record
The organisers of The Production Show in London last month (Olympia 21 to 23rd May) have announced that the 2002 event was "an outright success, with a record 9,670 visitors - up 15 per cent on last year."
More than 50 per cent of exhibitors have re-booked for 2003 - May 20 to 22nd - when the event will launch a new 3-D area.
Much of the growth is attributed to the show being six weeks after NAB in Las Vegas, thus becoming the first UK showcase for various exhibitor launches including Discreet, Media 100 and 2d3.
This year's show held free workshops, incorporating 3-D, which were attended by 700 people a day.
Rob Pickering, Director, Media 100 commented, "The Production Show in 2002 was a major success for Media 100. We had specific aims about the quality and quantity of customers we wanted to see and the Show exceeded all our goals!"
Andrew Craske, Communications Manager at Skillset, commented, "Every year the Show seems to get more and more successful for us. Our skillsformedia careers advice sessions totally sold out with many people booking sessions for after the show and our 'lucky break' seminar for runners was hugely over-subscribed with runners stood listening from outside the seminar room. The Production Show is one of our key communications activities throughout the year and we were very happy with the amount of people visiting the Skillset Learning Zone for careers advice and training information."
Ian Cunliffe, Director, Cynergy Broadcast Limited adds, "We found The Production Show 2002 lively and successful as we generated two substantial orders for new business for Ross Video Mixers and JVC Cameras and ancillary equipment. We will definitely be exhibiting next year."
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Viacom overtakes AOL
The US' Viacom Inc, owner of CBS, MTV and Paramount Pictures, has become the world's biggest media company following the valuation slump at AOL Time Warner Inc, even though AOL retains significantly larger revenue.
In a world where the repercussions of mega mergers have often proved negative, Viacom's E48.5 billion acquisition of CBS two years ago seems to have capitalised on the elusive synergies sought by such deals, combining the two companies' television businesses' ad sales. The merger created a company with about E24.2 billion in annual sales, roughly half of which comes from advertising, Blockbuster Inc accounting for most of the rest.
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