BERLIN — A week after German media giants Kirch and Bertelsmann emerged from the country’s digital TV wars as allies, the country’s cable gatekeeper, Deutsche Telekom, has agreed to open the door to its 17 million cable households.
DT in effect gave the go-ahead Wednesday for the Kirch Group and Bertelsmann’s TV arm, CLT-Ufa, to send digital services over DT’s cable wires.
The DT announcement follows the breakthrough reached last week between the Kirch Group and CLT-Ufa whereby the two rivals agreed to split paybox Premiere evenly between them. Kirch is buying out the 37.5% share held by French paybox Canal Plus, and subsequently CLT-Ufa and Kirch will readjust their current shares of 37.5% and 25%, respectively, in Premiere.
The estimated 1.4 million Premiere subscribers will thus be equipped to receive a d-box decoder. Kirch and CLT-Ufa will offer a joint platform of some 50 channels. It is still unclear whether the two will be fully merged or whether DF 1 could be taken under the Premiere umbrella. Kirch’s DF 1 has only 40,000 subs after a year of operation.
Shaking things up
The two agreements will finally jumpstart the sluggish digital TV take-up in Europe’s most lucrative market.
DT will offer, per the Wednesday agreement, a provider-neutral technical platform offering “restriction-free” access to its digital network for providers. Customers will have the choice to subscribe through DT or through providers such as the Kirch Group’s DF 1, a Telekom spokesperson said.
As the digital network operator, DT will charge a fixed annual rate to Kirch and CLT-Ufa for providing the hook-up. DT will also receive a percentage of the revenues from subscribers.
“We greet the (DT) agreement,” a Kirch Group spokesman told Daily Variety. “We will maintain our relationship to our customers. The real winner is the customer.”
In order to secure a standard decoder for the German market, DT, along with CLT-Ufa, will join the Kirch Group’s Beta Research (the technology development company) to work on a standard decoder based on the d-box. Each party will control 33.3%. The decoder will enable customers to access all programming offered on DT’s systems.
CLT-Ufa and the Kirch Group require seven digital channels from the Telekom’s hyperband reserves. How the space will be shared between the two providers has still to be resolved.
Details to come
“It has to do with the agreements reached between CLT-Ufa and Kirch,” said a CLT-Ufa spokesperson, adding that meetings to clear up the details will follow this week.
With digital TV in mind, Kirch snapped up endless rights from the Hollywood studios for pay TV and pay-per-view rights — estimated to have cost around $6 billion by the year 2000, and without which Premiere would have had a hard time surviving.
Sources suggest the financial ill-health of the Kirch Group spurred that company to come to terms with Bertelsmann over Premiere.