Europe’s hottest TV market has become a giant headache. A year after Rupert Murdoch touched off a gold rush of foreign investment in the German cable arena, out-of-towners have now downgraded their plans to launch channels here.

Cable capacity has become scarce and licenses a rare commodity since last summer, when Murdoch’s News Intl. agreed to take a majority stake in troubled infotainment weblet Vox. In the space of a few months, a dozen applicants for specialty channel licenses surfaced. Overnight, Disney, Viacom, Time-Warner – people who had hitherto chiefly sold TV shows to Germany – were gearing up to cross the Rhine as cablers.

But a year later, less than half the applicants are licensed, few of them have significant distribution, and the cable networks are so full that some foreigners may now face eviction notices from local regs – all of which has slowed last year’s stampede.

“The big foreign channels are having lots of problems,” says John Morris, managing director of the BBC in Germany. The BBC’s launch earlier this year of its news channel, BBC World, hardly reaches half a million homes and is confined to a radius covering the metropolitan Bremen area. As the company plots the introduction of BBC Prime, its entertainment channel, it can expect even smaller audiences.

Network expansionists, many of whom caught last year’s German niche fever, are now in the throes of niche nausea.

CNN Intl., for example, which has been on the air in Germany since 1985, may lose its cable slot in the most populous state of North Rhine Westphalia.

Regulators there will publish a victim’s list on June 30 with the names of those programmers whom authorities are booting off their region’s cable system.

That will be the first time such a death sentence has ever been meted out – and it could spread to other German regions. Germany’s laws are complicated and vary from state to state, but regulators consider the public value, programming variety and licensing history of the various channels in making their decisions.

‘No pleasure’

“Administrating the shortage gives us no pleasure,” chief NRW regulator Norbert Schneider told Variety last winter.

There is even less pleasure of course for those on the receiving end of the nein.

And what was considered a pocket of new opportunities has long since been blotted out by a glut of foreign and local competitors.

CNN Intl. must face off against rivals NBC Super Channel, BBC World and NTV, while on the music front there are five licensed vidcasters (MTV, VH-1, Viva, Viva-2 and COM-TV), two greenlighted children-family nets and at least three more in discussion.

One of those kindernets-in-waiting is Viacom-owned Nickelodeon, whose German launch has been mired by complications that beg the question: Is it worth it?

The sister network of MTV filed last August for a license, took on Ravensburger as a local partner just before Christmas and was officially greenlighted before the snow melted. Its launch is not going smoothly.

Nick already trails the competition, CLT and Disney’s joint venture family entertainment channel, Super RTL.

Now it faces further delays, having recently decided to switch transponders, as it renegotiates contracts with cable monopolist Deutsche Telekom in each German state. While that goes on, Super RTL has told regulators it wants Nick’s cable slots if they go unused for too long.

Nick symbolic

Nickelodeon’s dilemma is now endemic to a market so big it beckons, yet so slow and provincial, it maddens. Given that tradeoff, several sideline players are staying put for the moment.

The Playboy Channel has just launched in the U.K. and expects to expand to Ireland and Benelux by 1997, but isn’t yet heading to Germany.

Neither are other U.S. cablers such as Lifetime or the Country Music Network.

“It’s not easy at all,” says Mark Hollinger, Discovery Communication’s VP of international business development and the company’s general counsel. “The concern that we have is that channel capacity is very limited – maybe 2 million homes, according to the figures we have – and by the time we get a licensing agreement, we’d face a real capacity problem. That’s why we’ve started to look at some other possibilities.”

CLT option

Among those possibilities is a joint-venture documentary channel with CLT.

But that hush-hush alternative, still in the discussion phase, is part of a high-tech smorgasbord of channels the Luxembourg broadcast group is prepping for the dawning era of digital broadcasting. The Kirch Group, too, is working on a similar package – including hardware.

The jockeying by those two key local players points the way out of Germany’s broadcast lethargy: By next year, capacity problems will vanish with the advent of digital broadcasting and a renewed rush of investment can be expected.

Once digital compression alleviates analog depression, CLT and Kirch will have readied their pay packages in order to seize the new day. There is currently only one paybox in Germany – the Kirch-Bertelsmann-Canal Plus joint venture “Premiere” – but it has failed to attract a million subscribers five years after launch.

So Germany will remain off-putting and attractive at the same time – at least until new technologies break the logjam and legislators draw up new media laws to regulate the next phase of the game.

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