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NEWS Monday September 20th to Friday September 24th 2004
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Scroll down page or click below for news - latest first
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Germany's biggest cable operator Kabel Deutschland has abandoned plans to buy its three domestic rivals: ish in North Rhine Westphalia, iesy in Hesse and KabelBW in Baden Wurttemberg - a deal that would have created one of Europe's largest cable companies but drew opposition from regulators.
KDG said it had withdrawn its application because of "repeated negative signals from the Federal Cartel Office," which last month threatened to block the acquisition on the grounds that it would strengthen the firm's dominant market position.
The German public and commercial TV networks ARD, ZDF, RTL and ProSiebenSat.1 had also complained that their position would be weakened if authorities had allowed this de facto monopoly in the German cable market to take shape.
The proposed $3.3 billion deal, announced in April, would have given KDG control of cable networks across Germany. Like KDG itself, the three other operators were spun off by former parent Deutsche Telekom between 2000 and 2003.
KDG, owned by
Goldman Sachs, Apax Partners, and Providence Equity Partners, already has
10 million customers and has said the planned acquisitions would add at least
another 7 million. In an unsuccessful effort to win over the cartel authority,
it offered to invest in upgrading its network to make it suitable for high-speed
Internet services, but the watchdog wasn't convinced.
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The US Senate Commerce Committee decided against Senator John McCain's proposal to set a 2009 deadline for the Digital TV transition. However the legislation approved a provision providing $1 billion in subsidies for consumers to buy a device that would convert digital signals into a format they could see, or to subscribe to cable or satellite service.
The measure was amended to include the possibility of turning over some airwaves used by broadcasters to public safety organisations as early as 2008, but only if it did not disrupt consumers and the airwaves were needed.
McCain, the committee chairman, said the Senate probably would not consider the measure on its own but could fold parts of it into a bill that includes recommendations to improve homeland security made by the commission that investigated the Sept. 11, 2001, attacks.
The National
Association of Broadcasters opposed McCain's original bill, citing fears that
millions of Americans would not receive broadcasts in 2009 because they did
not have digital equipment.
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UK broadband services provider Video Networks Ltd (VNL), which offers the HomeChoice broadband and digital TV entertainment service in the London area, is ramping up its Triple Play capabilities with three senior-level appointments: an Executive Director of Development, an Executive Director of TV and Internet Product and an Executive Director of Telephony. The newly created positions come at a time when VNL is set to further develop and expand its HomeChoice offering in the UK.
Christine Mitchell, a long-standing cable and satellite TV executive, has been appointed as VNL's new Executive Director of TV and Internet Product. She will take full responsibility for the strategic direction and execution of HomeChoice's television, Internet and commercial services products. Simon Peachey has been appointed VNL's Executive Director of Development. He takes responsibility for overseeing the technical development organisation and systems' architecture of the HomeChoice services. Vijay Sodiwala has been appointed Executive Director of Telephony with overall responsibility for the strategic management and execution of the HomeChoice telephony services product which is due to be launched later this year.
Roger Lynch,
Chairman and Chief Executive Officer of VNL said that the appointments would
help to further grow and develop the Video Networks business. "They join
at a hugely exciting time for the company as we look to expand our services
and roll-out the HomeChoice brand across the UK."
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Noos, the leading French cable operator that was acquired earlier this year by UGC, is to restructure its product line up from September 29, increasing bandwidth and reducing prices.
The new entry-level product will be 1 Mb/s for E19.90 a month (or E14.90 a month if coupled with a subscription to digital TV). The top offer will be 4 Mb/s for E39.90 a month (or E34.90 with TV). The cable modem and installation will be supplied free of charge. Existing subscribers who do not opt for one of the new packages will have their access speed doubled automatically, with no change in their subscription.
Noos has stated
that its aim is to increase subscriber loyalty. A recent survey by an Internet
web magazine found that there is a noticeable movement among Internet subscribers,
who are migrating to Free, which provides 6 Mb/s and unlimited phone calls
to landlines plus around 100 TV channels for E29.90 a month. Most are leaving
AOL, but Noos is also loosing subscribers to Free.
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Sony is planning to launch at least three new television channels in the US following an agreement with Comcast, the US cable giant, to create a new channels joint venture.
Executives involved in the plan said Animax, AXN and Sony Entertainment TV, three channels already established in Asia and Latin America, could be distributed by Comcast as part of the alliance. Sony's TV distribution ambitions in the US, where it owns the Games Show Network, have previously been held back by launch costs.
The Comcast alliance coincides with Sony's agreement to participate in a separate $4.8 billion-$5 billion acquisition of Metro Goldwyn Mayer. Final terms of the MGM takeover, financed largely by private equity investors, are due to be agreed in the coming days. Comcast could also participate in the acquisition, investing up to $300 million.
Comcast and Sony
are also planning to develop a video-on-demand joint venture, exploiting the
3,000 films and 35,000 TV episodes held in the Sony Pictures library. That
library could also exploit MGM's 4,000 movies and 10,000 TV episodes.
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ITV posted a £340 million (E510 million) loss on the sale of its 5.5 per cent stake in Thomson, the French media and consumer electronics group.
The stake is a legacy of Carlton's £1.4 billion disposal of Technicolour, the video manufacturing and distribution business which it sold to Thomson in January 2001. Carlton has since merged with Granada to form ITV. At the time Carlton agreed to take part of the sale price in Thomson shares that were valued at £515 million or E40-a-share. The subsequent sell-off in media stocks has brought Thomson's shares down to E16.5.
Charles Allen, ITV's chief executive, sold the shares at a five-month high and said the £162 million disposal would be used to cut the group's borrowings.
Continuing with the sale of its non-core assets, ITV could raise as much as £40 million from the sale of its post-production firm, The Moving Picture Company, as it cuts the shortlist of bidders down to six.
The remaining six bidders for the business, which is behind commercials for the likes of Levi's and Stella Artois and music videos for Madonna and Primal Scream, include Kodak and Thomson. US venture capital firm Carlyle is also understood to be in the running.
It was earlier
reported that former Carlton boss Michael Green, as well as global advertising
group WPP, were also bidding, but it is unclear as to whether they have made
the shortlist.
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Cosumer electronics vendor Hitachi has selected CoreMedia's Digital Rights Management (DRM) solution for deployment in local operator infrastructures in Japan and other Asian markets.
"The solution is an important component in service delivery platforms and enables mobile operators as well as content providers to build an end-to-end mobile service for premium content such as true tones, music tracks or video clips," the companies said in a statement.
By using CoreMedia's
solution, Hitachi can customise mobile content delivery solutions for local
Japanese operators. As part of the collaboration, CoreMedia has developed
a new version of its DRM Packager for Hitachi, which is tailored specifically
for the needs of Asian content providers who require the encryption of content
before it is deployed to an operator.
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US largest mobile phone network operator Verizon Wireless, unveiled a major expansion of its 3G broadband wireless data service for business users which will be available in 14 metropolitan markets including New York, Los Angeles, Atlanta and 24 airports. The company plans to spend $1 billion building a nationwide broadband wireless network using EV-DO (Evolution Data Optimised) 3G technology.
The wireless carrier, a joint venture between Verizon of the US and Britain's Vodafone group, sees the new service called ‘BroadbandAccess', which will cost $80-a-month for unlimited use, as a key component in its plans to offer a range of high broadband data services to its business customers and consumers.
Initially Verizon will target the service at mobile business users who will be able to access it by plugging 3G data card into a portable PC. The service, which is already available in three cities, offers typical download speeds of about 500 kilobits per second - about ten times as fast as dial-up internet connections - with bursts of up to two megabits per second, comparable to home broadband service using a DSL or cable modem connection.
By the end of
next year Verizon plans to have deployed the 3G technology across the whole
of its network and plans to begin offering the 3G phones to business customers.
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Gemstar-TV Guide International and Hitachi America, unit of Japanese consumer electronics company Hitachi, have signed an agreement that will make Gemstar's interactive TV Guides a feature in Hitachi digital televisions.
Under the multiyear agreement, Gemstar-TV Guide will receive a licensing fee for each Hitachi digital television sold in North America that include the interactive TV Guide. Gemstar-TV Guide said Hitachi is the latest television maker to incorporate the feature into its sets. Gemstar-TV Guide has licensing agreements with a dozen other television makers, it said.
The feature,
called TV Guide On Screen, continuously updates program information and does
not require any special connection regardless of the source of the television
signal, Gemstar-TV Guide said.
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USVO, a wholly
owned subsidiary of USA Video Interactive and supplier of the MediaSentinel
digital watermarking technology, has entered into a partnership with Lightning
Media, a Hollywood provider of new media, post-production and DVD replication
services.
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NTL, Britain's biggest cable company, has instructed Goldman Sachs to sell its network of television transmitter towers to cut its £3 billon (E4.5bn) debt by about £1.2 billion.
Goldman is drawing up an information memorandum, detailing the tower arm's financial position, which will be sent to potential bidders in the next fortnight. NTL has been encouraged to sell off its transmission business after its rival Crown Castle UK was bought by National Grid Transco, the infrastructure group, for £1.1 billion. The field of would-be buyers is likely to be dominated by venture capitalists, such as the Carlyle Group.
National Grid Transco said that it was unlikely to make a second purchase so soon after it had digested the first. A sale of NTL Broadcast's transmission network could be achieved as soon as the end of the year, it is thought.
NTL was forced to postpone its last attempt to sell the transmission towers in December 2001, as its impending debt restructuring depressed the price of the network.
In the first
half of the year the transmitter division, NTL Broadcast, earned £63.5
million and its income is fairly stable at or around £30 million a quarter.
During the same period, NTL earned £397 million on an underlying basis.
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Hutchison Telecommunications International, Hutchison Whampoa's telecom unit, expects to raise as much as US$1.13 billion from a public offering in the US and Hong Kong in October.
Hutchison Whampoa has identified the HTIL IPO as a way to offset losses from its expensive 3G wireless operations, which accumulated losses before interest and taxes of HK$12.2 billion in 2003. The IPO would help Hutchison grow its 3G subsidiaries in ten countries including UK and Italy, its two biggest markets, as numbers suggest the customer acquisition rate is picking up.
The Hong Kong conglomerate said it will offer US$1.155 billion shares or 25 per cent of the unit's 4.5 billion shares, at a price range of HK$6.59-7.63 a share. The price range would value Hutchison Telecom at between US$3.8 billion and US$4.4 billion.
Hutchison Whampoa has invested HK$20.8 billion in Hutchison Telecom through shareholder loans, and will remain the majority shareholder of Hutchison Telecom after it is listed, holding about 75 per cent.
Japan's NTT DoCoMo,
which withdrew from the H3G UK venture with Hutchison in May, will get 3.29
per cent to 3.81 per cent stake. The firm said it would pay DoCoMo in cash
and shares when the Japanese telecom surrendered its 20 per cent stake in
H3G UK.
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UK commercial television broadcaster ITV is selling its 5.5 per cent stake in French firm Thomson in its latest move to cut debt by selling non-core assets. ITV said in a statement on it had agreed to sell its 15.5 million shares in technology group Thomson to investment banks Citigroup and UBS.
"We're delighted
to have disposed of our largest non-core asset sooner than expected at a five
month high and reduced our borrowings by E258 million," ITV CEO Charles
Allen said in a statement. ITV said the book value of the stake was E243 million.
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US bankrupt cableco Adelphia Communications has formally put itself up for sale, splitting the company into seven geographic clusters. "Going into the market with this clustering strategy allows us to solicit the best response from strategic investors and at the same time optimise interest from financial buyers," Adelphia Chief Operating Officer Ron Cooper commented.
An accounting scandal and piled-up debt forced the cable company into Chapter 11 bankruptcy protection in 2002. Founder John Rigas and son Timothy were convicted of conspiracy, bank fraud and securities fraud this summer. The company owes more than $20 billion to creditors, Cooper said. That puts the onus on management to "pursue a path that yields the greatest recovery for our bankruptcy constituents."
Among the probable participants in the auction are Time Warner and Comcast, the two media giants which have already expressed an interest in the company, as well as a number of cable entrepreneurs who have teamed up with private equity groups to prepare bids.
The clusters of assets suggested by Adelphia are: northern New England/eastern New York; Cleveland/Greater Ohio Valley; Florida/south-east; California/western; Virginia/Maryland/Colorado Springs/Kentucky; Pennsylvania; and western New York & Connecticut.
The outcome of
the auction is only likely to be approved by the bankruptcy court if it yields
a greater valuation of Adelphia than an internal reorganisation plan that
fixed the company's price at about $18 billion.
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A French government
delegation will meet British ministerial counterparts and broadcasters to
discuss applying Britain's model for digital TV services in France. According
to a report in the FT, Renaud Donnedieu de Vabres, the French culture minister,
is also due for talks at Ofcom, the media regulator, over the timetable for
switching off analogue signals in favour of multi-channel digital TV transmissions.
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Canadian television subscribers are holding back from going digital because they don't see the need for it, because they don't know its benefits or features, and because they see cost as a factor in adopting the service.
A new survey by Decima Research, Ottawa, shows that while there are a growing number of Canadian households that subscribe to a digital TV service such as digital cable and satellite TV, 60 per cent of households that pay to receive a TV service are still happy with standard analogue cable service. And when asked why they don't subscribe to digital TV service, 48 per cent of analogue subscribers say that they either do not need the service or are not interested in it.
A full 33 per cent of analogue subscribers identify price-related factors as another reason not to subscribe, and 55 per cent of analogue subscribers who used to subscribe to digital television service but no longer do so, cite price or cost factors as the reason why they no longer subscribe to digital TV service.
The facts are
found in the 2004 consumer research study entitled 'The digital domain: Consumer
Attitudes on Digital Television Services, Benefits, and Features in Canada.'
"These findings suggest that television service providers such as cable
and satellite TV companies must provide greater value to digital TV subscribers,
or at least do a better job at communicating the value of their digital services,"
says Mario Mota, vice-president, Broadcast/Media Research, Decima Research.
"A majority of analogue TV subscribers don't even know what services,
benefits, or features are available from a digital television service."
And among consumers who might, probably or definitely subscribe to a digital service within the next two years, 23 per cent are undecided about which digital TV platform they would choose.
"This segment
of TV subscribers represents a tremendous opportunity for digital television
providers to craft sales and marketing campaigns to win over these consumers,"
says Mr. Mota. "Digital TV providers' near-term sales and marketing plans
are critical to swaying these undecided analog subscribers to their service."
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Comcast and the Atlanta Braves, a US Major League Baseball, have announced plans for a 24-hour channel dedicated exclusively to a single Major League Baseball team as part of Comcast Atlanta's Digital Cable service at no additional charge.
The channel will
feature live home games in HDTV (which are already being shown on TBS or Turner
South) for the rest of the 2004 regular season for Comcast HDTV households,
along with encore game replays for all digital cable viewers (both HDTV and
digital).
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Singapore Telecommunications will probably begin selling high-speed third-generation mobile services in early 2005 after a series of trials that started last week are completed, the company said.
Commercial sales could begin this year, but early 2005 is more likely when consumers have more choices of compatible mobile phones, said SingTel Executive Vice President Lim Chuan Poh at a press briefing.
SingTel will
spend S$200 million-S$220 million over five years to build the 3G network,
in addition to the S$100 million it spent in April 2001 to acquire the license.
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ARINC Incorporated and Nordic operator Telenor unveiled a new technology that makes in-flight mobile phone service a reality. The two companies are giving a live demonstration of their in-cabin GSM mobile phone solution this week at the World Airline Entertainment Association (WAEA) conference in Seattle, Washington.
"We have passed all the technology and pricing hurdles," stated Graham Lake, ARINC Vice President and Managing Director, Europe, Middle East & Africa. "Our in-cabin system, exactly as shown here, will fit aboard thousands of today's passenger jets very economically, and with no additional satellite equipment required. The remaining challenges to in-flight mobile phone service are basically regulatory in nature."
"Significantly,
the ARINC/Telenor Mobile Connectivity system is expected to be priced well
under $100,000 per aircraft," said Berit Svendsen, chief technical officer
for Telenor. "It makes use of the existing Inmarsat satellite equipment
already found on most long-range aircraft today. Installation requires only
a small 'picocell' system to be located in the cabin, allowing passengers
to use their GSM mobile phones in flight just as on the ground--for both voice
and text messages."
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US senate earmarks $1bl to help analogue switch off
A Senate committee is set to vote this week on legislation that would require broadcasters to abandon their current analogue TV channels and switch solely to digital transmissions by 2009.
The Senate Commerce Committee is scheduled to vote Wednesday on the bill, sponsored by the panel's chairman, Senator John McCain. Included in the paper is language that would authorise the government to spend as much as $1 billion to purchase digital-to-analogue set-top converter boxes for people who can't afford to pay for converters or digital TVs, according to local reports.
Current law allows broadcasters to continue transmitting on their analogue frequencies until 85 per cent of the TV-watching public can view digital television. Public policy officials, including FCC chairman Michael Powell, argue that it will take decades to reach the 85 per cent threshold, preventing those frequencies from being used for new services like wireless broadband and making public safety operations more difficult.
Broadcasters oppose the legislation, which is designed to speed up the transition to digital TV and free up the frequencies broadcasters use now. Those frequencies would then be auctioned off or reserved for public safety use. About 17 million to 18 million Americans, or 15 per cent of the population, still rely on over-the-air transmissions to receive television programming.
Under the bill,
it would be illegal to sell an analogue-only TV set that did not carry a label
warning consumers that the set will cease to work on December 31 2008.
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The Chinese Television System (CTS) is set to be the Taipei's first government-owned terrestrial TV station to be made into a publicly-operated station.
"Before an independent national communication commission (NCC) is established, one of our future missions is to integrate the Public Television Service (PTS) with four other public service TV channels, including CTS, into a public television group before the end of next year," GIO Director-General Lin Chia-lung.
The Broadcasting and Television Law in Taiwan has a ban on certain civil servants and political party members from owning, funding or assuming key positions in the media. The law also mandates that political parties and the government must dispose of their stakes in media outlets before December 26 next year.
The government owns 75 per cent of CTS and 47.39 per cent of Taiwan Television (TTV) and the GIO plans to take a gradual approach to the issue of making CTS and TTV publicly operated. The GIO will start with the CTS, then decide later whether to commercialise TTV or integrate it into the public television group, which would be allowed to run commercials.
The local media
said that Lin has also called on the Chinese Nationalist Party (KMT) to sell
its stake in China Television Company (CTV) and Taiwan Television (TTV) before
the party releases some of its shares in the party-run Hua-Hsia Investment
Holding Co to investors. Through the company, the KMT owns a 65 per cent stake
in CTV and a 10 per cent stake in TTV. It is being said that party authorities
are hoping to get US$235 million by selling the shares in CTV, the Broadcasting
Corp of China (BCC), the Central Motion Picture Corp, the Central Daily News
and China Daily News in a single block offering before next year.
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Speaking at the Broadband World Forum in Venice, Michel Rahier, COO Fixed Communications Group, unveiled the 7302 Intelligent Services Access Manager. Rahier claimed it was the first solution to enable 100 per cent triple play services providing 20Mbts per user in order to deliver HDTV, VOD and broadcast services simultaneously.
The company, which says it has a 41 per cent share of the current DSLAM market, says the product will preface a major triple play rollout in several markets. Its first customer is China Telecom, which is currently trialing the 7302 with a view to deployment.
Alcatel also
celebrated its 50 millionth DSL installation, declaring it was now installing
at a rate of one every 1.5 seconds worldwide.
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Hong Kong's terrestrial broadcaster Television Broadcasts has secured landing rights to broadcast its two Hong Kong terrestrial channels in nine cities in Guangdong. The province's cable TV operators will pay TVB an undisclosed programming fee - believed to be about US$6.4 million. The broadcaster had suffered as a result of piracy among Guangdong's cable operators.
Under the agreement, TVB's channels will become available on 10 cable TV networks with about eight million subscribers in nine Guangdong cities. The local media said that TVB's landing rights agreement could herald future co-operation with Southern Media Group, a company formed by the consolidation of Guangdong's cable TV operators following the State Administration of Radio, Film and Television's attempt to reorganise the industry.
"We will
work with Southern Media to explore the market for TV advertising in the province,"
said TVB general manager of International Operations Dewy Ip, who added that
TVB could enter a joint venture with Southern Media. "The programming
fee TVB will receive from Southern Media is only an interim arrangement."
He further indicated that future TV advertising revenue from Guangdong may
not come from TVB's present channels, but on future collaboration with Southern
Media.
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Speculation that Michael Eisner, the chief executive of the Walt Disney Company, was planning to remain on the board, or become chairman when he retires in two years, was quelled this week, when the troubled CEO said he would not seek to extend his contract, which ends in 2006. Eisner made the remarks in an interview with Fortune magazine.
It is the first
time since announcing that he would leave when his contract expired after
a 20-year tenure that he acknowledged that he was not seeking the chairman's
job after the current chairman, the former Senator George Mitchell, steps
down.
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UK digital terrestrial operator Top Up TV, which offers a ‘pay-lite' package to Freeview customers, is launching a multi-million pound terrestrial advertising campaign which starts next week.
The 30-second commercials, which will have two different executions, will run on Channel 4, Five and GMTV, in addition to various digital channels, right through to Christmas.
Matt Seaman,
Top Up TV Sales and Marketing Director said: "Going on analogue terrestrial
TV will give us additional reach of Freeview customers who wish to upgrade
their existing incompatible box for a ‘box with a slot' in time for Christmas."
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The Board of Control for Cricket in India has informed the Bombay High Court that it is cancelling the tender process for the telecast rights of cricket matches following which ESPN-Star Sports withdrew its petition.
BCCI told the Bench of Chief Justice Dalveer Bhandari and Justice D Y Chandrachud that its tender with Zee Telefilms was "not concluded" as the draft intent letter sent by it to Zee Telefilms was not accepted by the latter and negotiations were still continuing between the two parties.
The BCCI also
said that it requires at least 15 to 20 days to make arrangement for telecast
production and to sign advertisers. The Cricket Board also indicated that
it may opt for two new bids, one involving the next three cricket series between
October 2004 to April 2005 and the other for the next four years. It added
that in view of the upcoming series between India and Australia beginning
in early October six, they would "cancel the tender and produce on its
own or otherwise."
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Alcatel and Sistema JFSC, the largest private non-natural resource-based corporation in Russia and an active player in the Russian telecommunications market, have announced a deal worth more than E5 million to build a platform for the delivery of advanced multimedia services to Sistema's residential customers.
Under the term of the contract, the first phase of a large multimedia project of AFK Sistema will be implemented. Alcatel will deliver a middleware solution - Open Media Suite - to Sistema Mass Media, Sistema's media arm, its, for delivery of rich media in a triple play service mix. Additionally, Alcatel will provide integration, customisation and installation services.
Alcatel is currently piloting with Sistema and targeting a mass-market commercial launch for early 2005.
Sistema Mass
Media's multimedia project is aimed at providing users in Moscow and in the
Russian regions with advanced broadband entertainment services, including
interactive TV, video on demand, multimedia games, high-speed internet access
and e-commerce. The project will integrate all previous experience of Sistema's
subsidiaries in the areas of production, aggregation and distribution of broadband
content and multimedia services.
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National Geographic's treasure seekers series ‘Mysteries of the Nile' is to become the first high definition title released in the international marketplace.
Julie Bellonte, Vice President of International Home & DVD at National Geographic Television & Film (NGT&F), described the release as "a beacon of where we are heading," adding, "National Geographic has such rich and intriguing productions that lend themselves to high definition. We are pleased to be in a position to segue this title to the international marketplace through our association with Microsoft and its Windows Media 9 Series, which powers movies into the high-definition format. As the technology continues to advance, we will be looking to drastically increase our release volume of titles in high definition."
In its long-term distribution agreement with Australia's Rainbow Products, Rainbow will release "Mysteries of the Nile," as a 60-minute film in high-definition throughout Australia and New Zealand in January 2005.
‘Mysteries
of the Nile' is an extension of an agreement that National Geographic has
with Microsoft Corp. to release specific programmes in high definition through
Microsoft's Windows Media 9 Series.
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French communications solutions firm Alcatel has signed a contract with the Russian Satellite Communications Company (RSCC) to develop and deliver the payloads for the Express AM33 and AM44 communications satellites.
The two payloads - electronic equipment which specifies the satellite mission – are to be manufactured in Alcatel Space's Toulouse plant and then integrated into "Express-AM" platforms produced by NPO- PM in Krasnoyarsk, Russia.
The new Russian
Express AM33 and AM44 communications satellites are to carry C-band transponders,
Ku-band transponders and L-band transponders. The spacecraft are designed
to provide digital TV and radio broadcasting, telephony, data transmission
channels, videoconferencing services and internet access. The satellites will
be also used to deploy communication networks by applying VSAT technology
across the territory of Russia, CIS countries, Europe, Asia and Africa.
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Haim Saban's group will gain a majority stake in broadcaster ProSiebenSat.1 following an agreement with media company KirchMedia, which filed for protection from creditors two years ago.
The group of Saban and five private equity firms will raise its stake to 50.5 percent from 37.6 per cent, as KirchMedia's unit Taurus TV sells a 12.9 per cent stake to finance payments to creditors Axel Springer and Universal Studios, KirchMedia said in a statement.
Saban, took control of Germany-based ProSiebenSat.1 in August 2003 by buying a 36 per cent stake, with 72 per cent of the voting rights, from bankrupt KirchMedia.
Meanwhile, the administrator of KirchMedia announced that the company's unit Taurus TV has ended insolvency proceedings after reaching an agreement with creditors. Universal Studios, owned by General Electric, will receive a ‘confidential payment,' KirchMedia said.
Europe's largest newspaper publisher Axel Springer, will get 1.8 per cent of ProSiebenSat.1 shares from Kirch, increasing its stake in TV broadcaster from 10.2 per cent to 12 per cent, as part of a settlement and will also get E60.3 million from Kirch.
"Under the settlement agreement, Axel Springer agrees to waive its rights arising from the put option claim which is in dispute between the parties involved,'' Hamburg, Germany-based Axel Springer said.
The insolvency administrator of KirchMedia will "recognise a claim in the schedule of debts in an amount of E325 million in favour of Axel Springer,'' the company confirmed. The claim will be taken into account in the further insolvency proceedings, Springer added.
A separate restructuring has seen the ProSiebenSat.1 Group create a subsidiary for the international distribution of its TV productions, and introduce a new diversification segment. The new company, SevenOne International, will be responsible for marketing the broadcast rights to TV productions of the ProSiebenSat.1 Group worldwide. "The ProSiebenSat.1 Group is one of the biggest principals for TV productions in Germany. It is a logical consequence that the Group distributes such productions internationally," noted Guillaume de Posch, Executive Board Chairman of ProSiebenSat.1 Media AG. SevenOne International will serve as the distribution agent for Sat.1, ProSieben, Kabel 1 and N24 productions.
The new Diversification
segment will cover the activities of subsidiaries SevenOne Intermedia and
MM MerchandisingMedia. The restructuring move is intended to help the group
diversify its sources of income and build up revenues that do not come directly
from TV advertising. The Company's Diversification segment currently generates
about seven percent of revenues – a percentage the Group intends to double
within the next three years.
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Luxembourg-based global satellite services provider SES Global reported lower revenues for H1 2004 of E593 million compared to E642 million in H1 2003. The drop on revenues and EBITDA reflect a weaker US dollar and lower contribution by one-time items, the company commented.
Group profits rose 41per cent from E115 million to E162 million, largely as a result of the release of tax provisions.
Romain Bausch, President and CEO, commented, "The first six months of the year were very much as we had expected. For the full year, recurring revenues on a constant exchange rate basis are projected to be unchanged from the 2003 level, and Profit of the Group will also be at the prior year level. The record launch programme of five satellites this year will lead to high capital expenditures in 2004. Nonetheless these expenditures will be fully financed by operating cash flow."
Bausch also noted that while 2004 was a year of transition for SES, the company was in very good shape as it moved towards 2005. "In 2005 and 2006, our revenues are forecast to deliver strong growth, our principal markets are improving, and our financial position is very solid. SES Global will continue to invest in attractive growth opportunities, while still generating increasing levels of free cash flow in the coming years, allowing us to consider increasing total returns to shareholders," he added.
He pointed out that the majority of the company's business is dedicated to serving the higher-value video broadcasting markets and these would continue to grow as the market evolves. "HDTV services are gaining momentum in the US. In Europe, where HDTV broadcasting is in its infancy, a number of major broadcasters have confirmed their plans to introduce HDTV services in the next couple of years. The larger bandwidth requirement for broadcasting HDTV is a strong growth driver," he said.
SES has successfully launched two replacement satellites for SES Americom's HD-PRIME neighbourhood during the first half. This will be followed by three more launches towards the end of this year, including the AMC-15 and AMC-16 satellites dedicated to serving EchoStar, as well as WSAT-2 providing coverage of North America, South America, Europe and Africa.
New contracts
signed in the period have raised the Group's contract back-log from E 6.4
billion at the end of 2003 to E 6.9 billion at June 30, 2004.
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The History Channel is set to launch in Germany. After a general meeting of regional media regulators in Germany last week, the AETN German subsidiary The History Channel has obtained a licence to broadcast in the country.
The channel, which will be part of cable operator KDG's digital bouquet, is launching September 27. KDG reaches over 10 million homes of which currently 100,000 have subscribed to digital offers.
In addition,
Disney's German unit has been licensed to provide new thematic channels. Buena
Vista Germany intends to launch its classic animation channel ‘Toon Disney'
and its pre-school offer ‘Playhouse Disney', after securing long term
agreements with pay-TV platforms. Disney in Germany already runs its Premium
Disney Channel exclusively on the Premiere Pay TV platform, also the location
for basic channel Fox Kids (soon to be re-branded as Jetix).
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BT Group is said to be in advanced discussions with BSkyB, ITV and the BBC for the rights to offer consumers popular programmes over high-speed internet connections on a pay-per-view basis.
According to weekend media reports, the discussions are part of plans by BT to enter the pay-per-view TV market with the launch of a new BT-branded digital TV and internet service.
The telecommunications operator has been in discussions with a number of makers of Freeview receivers, including Netgem and SetPal, to develop set-top boxes that will connect high-speed broadband internet services to TV sets. BT wants to sell an enhanced Freeview box that would not only give users the full range of free digital channels but also an extensive library of films, dramas and other TV content on demand.
Trials of the system are due to start on a few hundred customers this week, and BT hopes to have a full commercial launch of the service next summer.
BT is in separate, but less advanced, discussions with BSkyB to combine its on-demand TV broadband technology with Sky's satellite broadcasting service.
BSkyB's latest Sky+ set-top box enables users to select the types of programmes that they would like to watch and have these automatically saved on a hard drive to be watched later at viewers' own convenience. Sky cannot offer a true video-on-demand service using satellite broadcasting but two years ago was awarded its own broadband service licence.
BSkyB is expected
to gauge the impact of its soon-to-be-launched FreeSat service, which gives
households free access to a limited range of Sky channels, before it decides
whether to team up with BT to offer video-on-demand.
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Singapore has called a halt to a four-year-long attempt to create competition in its domestic free to air TV industry - a move that is also likely to end the chance that further players will be introduced into the pay-TV arena.
Singapore Press Holdings (SPH) and the state-owned broadcaster MediaCorp have agreed to merge their seven terrestrial channels in a venture that will be 80 per cent owned by MediaCorp, with the remainder going to SPH.
The announcement ends the plan unveiled in 2000 for SPH to start two terrestrial channels while MediaCorp began publishing a newspaper. However, SPH's channels remained loss-makers, totalling nearly $120 million in losses over the last four years. The move to merge the channels is an admission that the city state of four million could not sustain the cash flow needed to support the extra TV output and demand for advertising.
Meanwhile, the news will also have ramifications for the pay TV sector. Pay TV has been a monopoly since Singapore CableVision was introduced in 1995.
The extra channels
introduced by SPH also raised expectations that the government would introduce
a second pay TV operation, yet the merger of SPH and MediaOne's output is
likely to put these plans on indefinite hold.
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UTV, part of the ITV network dominated by ITV Plc, said turnover for the six months to June 30 rose 17 per cent to £30.1 million.
It expects TV
advertising revenue to grow 14 per cent in the third quarter, and to increase
by 15 per cent in October.
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Vodafone is the first operator in the Netherlands to offer UMTS coverage to more than half of the Dutch population. With a coverage percentage of 55 per cent, Vodafone offers a geographical spread of the Vodafone UMTS network, connecting larger cities, industrial estates, motorways and railways in the Netherlands.
Following the
expansion of the UMTS coverage, Vodafone customers can now use the UMTS data
card for the laptop, and services such as Video Telephony and live TV for
their handset in the Randstad and other major cities throughout the country.
Before April 2005, the number of Dutch cities with Vodafone UMTS coverage
will be doubled, the company said.
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EchoStar announced that its subsidiary, EchoStar Satellite, will not pursue expansion of its marketing relationship with Qwest Corp, a Bell Operating Company which provides triple play services.
"We have recently formed several other partnerships with telecommunication companies that have demonstrated significant financial commitment and a desire for long-term partnership that provides beneficial bundled service for our joint customers," said Nolan Daines, senior vice president, Alliance Management Group, the broadband division of EchoStar. "Through these partnerships, our joint customers are enjoying a single bill, single point of contact, enhanced customer experience and bundled discounts."
EchoStar will seek to expand relationships with current and future telecommunication partners that focus on meeting customer demand for single-bill, bundled services. Customers across the country have embraced the convenience and cost savings provided through these successful partnerships.
EchoStar will continue to honour its current, year-old relationship with Qwest, in which Qwest has agreed to sell DISH Network satellite TV service to Qwest's customers through the end of the multi-year contract.
Separately, Echo
Star announced that its subsidiary, EchoStar DBS Corporation, was offering
approximately $1 billion aggregate principal amount of debt securities in
accordance with Securities and Exchange Commission Rule 144A. The proceeds
of the offering are intended to be used for general corporate purposes, according
to the company.
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Following the exit of Intelsat from pay-TV venture Galaxy Satellite Broadcasting, the other partner Television Broadcasts (TVB), Hong Kong's free-to-air TV broadcaster, is confident of securing a new investor to take up the abandoned 51 per cent stake.
The local media said that Hutchison Global Communications (HGC) was among the top contenders to take over Intelsat's stake in Galaxy. TVB managing director Louis Page commented that the broadcaster has asked the Broadcasting Authority to extend the deadline to secure new investment. Page even said the 51 per cent stake need not be limited to just one partner.
A Commerce, Industry and Technology Bureau spokesman said that TVB had to secure a new investor before the scheduled date in December to take back the Intelsat stake, otherwise Galaxy would not be allowed to broadcast its content.
"The move is no surprise to me, and my take is that TVB will either sell the controlling stake to a partner that could easily provide better network coverage or otherwise exit the Hong Kong pay-TV market," commented Standard and Poor's Equity Research associate director David So. "If the latter is the case, then TVB will be relieved of the start-up losses generated by Galaxy for the next few years, and accordingly the move will be earnings-assertive to TVB. In any case, I think it will be very difficult to find a partner that is interested in gaining a controlling stake in Galaxy unless it could structure a deal that would also enable the buyer to capitalise on the mainland market through this JV."
Observers suggest
that the new partners should be a telecom infrastructure player in Hong Kong
that provides broadband last-mile access into homes such as City Telecom,
PCCW and Hutchison.
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English football for Swedish 3G users
Vodafone Sweden's 3G customers can now follow top English football via their mobile phones. Vodafone Sweden has exclusive rights to show video footage of Premier League goals and round-ups via mobile. The service is available via Vodafone live!
" English league football has a special place in the hearts of Swedish football fans and our services enable customers to follow the progress of their favourite teams even when there's no TV within reach" claimed Anders Jensen, Head of Content Services at Vodafone Sweden.
The service is specially adapted for Vodafone's 3G customers and the content - match previews, half-time and full-time reports and round-ups - is streamed to mobile phones. The goals and highlights from matches are available for viewing 36 hours after the final whistle.
Vodafone Sweden's
agreement with FA Premier League runs for three seasons.
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AEPOC (the European Association for the Protection of Encrypted Works and Services) will hold its 2nd AEPOC European Anti-Piracy Symposium October 21st, 2004 in Amsterdam.
The first symposium last year in Vicenza, Italy was attended by a wide range of media professionals. "Our symposium last year made a significant contribution to the advancement of discussions among anti-piracy professionals. This year's event, with its broad participation, will invigorate the dialogue between the media industry and regulators," said Jean Grenier, president of AEPOC.
The symposium
will be moderated by Davide Rossi, Secretary General of AEPOC and Member of
the Intellectual Property Committee of the Italian Prime Minister's Cabinet.
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Ofcom chief defends £145m running costs
UK media watchdog
Ofcom has issued its first annual report where it reveals the launch costs
for the organisation, created from five regulators and spanning an industry
boasting total revenues of £60 billion (E90 billion). The new organisation
has set aside £145 million for its running costs in the current financial
year, compared with like-for-like running costs of £135 million for
the old separate regulators.
The top team at Ofcom was awarded almost £2.3 million in salaries and
benefits over the past year, with CEO Stephen Carter banking £370,769.
This year's costs will be higher, as some employees only started part-way
through the 2003-2004 financial year.
Ofcom's staff costs totalled £13.4 million, according to the regulator's annual report. Ed Richards, the former No 10 policy adviser recruited as a senior partner, was paid £254,844 in salary and benefits for 11 months' work, while Kip Meek, another senior partner, received £300,057 for a full year.
Lord Currie,
Chairman of Ofcom, who was paid £150,000, said: "We have brought
in very able people. We have paid them salaries that are by no means market
rates but they are competitive, and I'm very comfortable with them."
The average Ofcom staff member is paid £43,000.
Almost 200 officials were made redundant following the long-planned merger of the Independent Television Commission, Broadcasting Standards Council, Radio Authority, Oftel and Radio Communications Agency.
Carter, the former chief operating officer of NTL commented: "In an industry with turnover of £60 billion, £145 million is not excessive and we have set a target to reduce the running costs by five per cent a year for the next five years."
Ofcom's launch
- funded partly with a £52.3 million 'transition budget' - was marked
by an unprecedented wave of consultation papers and strategic reviews.
The regulator has launched three important reviews: in public service broadcasting,
wireless spectrum trading and telecommunications. Carter said that the principal
challenge for the regulator in the coming year would be the 'digitalisation'
of every area it regulates, from telecommunications to television. He said
one of the most important aspects of the switch to a digital television network
would be the establishment of SwtichCo, the body that would drive forward
the change.
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As expected Intelsat announced that is has decided to end its 51 per cent participation in Galaxy Satellite TV Holdings of Hong Kong, whose subsidiary Galaxy Satellite Broadcasting provides local and international pay-TV programming to the Hong Kong market.
Intelsat's partner in the Galaxy business, TVB, will acquire Intelsat's share in the joint venture and has agreed to release Intelsat from any future cash contributions. A related existing agreement for Intelsat's in-kind contribution of satellite capacity on the IS-709 satellite will end on 31 March 2005. Intelsat's financial results for the period ended 30 September 2004 will reflect a non-cash charge of approximately $30 million to write down the Galaxy investment.
"We continue
to believe that Galaxy's service offering represents an attractive alternative
for pay-TV subscribers in Hong Kong," said Conny Kullman, CEO of Intelsat.
"Galaxy's growth has been slower than anticipated, however, and it is
not in Intelsat's strategic interest to invest additional resources and management
time on this business."
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Ofcom has published its Digital Television Update for the second quarter of 2004. The report examines the latest subscriber figures provided by the main platform operators.
The update shows
that by 30 June 2004, digital television penetration had increased to 55 per
cent of UK households, up from 53 per cent from the previous quarter. A further
four per cent of households subscribed to analogue cable during the quarter,
bringing the total number of households receiving some form of multi-channel
television to over 59 per cent.
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IDS, the sales division of Flextech Television, has launched interactive adverts for the first time using the Zip TV Channel. The deal follows the conclusion of contract discussions with both Flextech and UKTV, and completes the agreement for IDS to partner with Zip Television on interactive TV campaigns.
IDS said: "It is great to be first to market with this platform-agnostic interactive proposition". Donna Barradale, at Zip Television said: "The deal with IDS ensures that we are both able to offer advertisers a wider choice in interactive TV advertising. IDS deliver Zip Television a unique and niche audience, giving members and interactive advertisers alike access to often hard to reach viewers."
IDS represents
15 television channel brands, a majority with interactive capabilities (Flextech
- LivingTV, Trouble, Bravo, Challenge and Ftn; UKTV – UKTV Gold, UKTVG2,
UKTV Style, UKTV Food, UKTV People, UKTV Documentary, UKTV History, UKTV Drama,
UKTV Bright Ideas; - and Extreme Sports Channel).
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India's leading media conglomerate Bennett Coleman Group, has re-entered the TV broadcasting industry with the launch of its premium, niche, non-fiction entertainment and lifestyle channel 'Zoom' in Hindi.
The group has
already signed an agreement with the Essel Shyam uplinking facility in Noida
for uplinking the channel. Available in pay-mode, the broadcaster plans to
reach out to 28 million households in the country after its first year of
operations.
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CanWest Global Communications, one of Canada's largest broadcasters, is looking for acquisitions in the US as part of its growth strategy.
Leonard Asper,
CEO, told guests at a conference on media in Toronto, organised by BMO Nesbitt
Burns, that CanWest Global's investigation of the market found that, while
there are interesting TV and Radio broadcast properties in the US market,
the prices for those properties are not. Therefore,
CanWest is looking at the possibility of acquiring US cable operations so
that it can participate in the expansion of digital services in the US market.
He said that there are some lower cost entry points with the cable sector.
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Wein TV, a brand of Wine Network, a global wine television network, made its official debut on German cableco Ish. "This is a first for a US based network to have its worldwide debut in Europe with 100 per cent of its programming in German," said Patrick Brunet, Co-founder & CEO of Wine Network.
"Wein TV
has invested considerably in the German market in order to deliver to our
viewers programming in German." Stated Nakul Dewan, Vice President, Marketing
and Sales of Ish. The channel will be added to Ish's Lifestyle package.
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Alcatel, the world's largest provider of broadband Internet equipment, agreed to buy privately held phone-equipment maker Spatial Wireless for $250 million in shares to expand its wireless-network business.
Spatial Wireless
makes software to control call and data switching in mobile networks. Alcatel
said it will pay for the company in American depositary receipts and expects
to complete the purchase in the fourth quarter.
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Motorola has
received certification from China's State Administration for Radio, Film and
Television (SARFT) for its DVi1000 digital cable DVB set-top and the MediaCipher
conditional access system. With these certifications, Motorola has completed
testing on all key elements of the company's end-to-end digital cable solution
for China.
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