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BBC’S U.S. VISA: TCI

U.K. digital TV deal reflects global ambition

LONDON — The BBC may at last be positioned to break into the U.S. TV market, following its agreement on a broad digital alliance with U.S. cable giant Tele-Communications Inc.

A joint venture between BBC Worldwide, the British Broadcasting Corp.’s commercial arm, and Flextech, a European satellite programming firm owned 51% by TCI, to create eight new U.K. pay TV channels was confirmed Monday.

Reading between the lines of the pact for the BBC’s first full-fledged pay TV channels, the British pubcaster’s global broadcasting ambitions could be discerned. Adam Singer, president of TCI’s international arm, said the alli-ance could result in a $1 billion revenue stream for the Beeb by the year 2000.

“It’s a global deal with a global partner involving a number of parties,” Singer said. His rosy forecast takes into account the Flextech deal plus a $500 million joint venture, still to be signed, with Discovery Communications, which is majority owned by TCI, to launch channels in the U.S. and other international markets. Part of the deal also would include U.S. distribution for BBC World, the news and docu channel, on TCI-owned and other North American cable systems.

The agreement, which was forged by Singer, BBC Worldwide CEO Bob Phillis and Flextech CEO Bob Luard, includes 36 separate contracts covering more than 2,000 pages, and culminates months of talks (Daily Variety, Aug. 30, 1996).

“We’re the first company to have cut a deal like this with the BBC,” Singer said. “Time Warner tried, Cox tried, but we’ve actually succeeded.”

BBC Worldwide’s Phillis described the pact as “a historic development for the BBC,” which has long sought a foothold in the U.S.

BBC Broadcast, the pubcaster’s new stand-alone commissioning and scheduling outfit, will produce the new chan-nels, designed to cover such traditional BBC strengths as natural history, arts, entertainment, education and sports.

Initially five channels will be broadcast: BBC Showcase, an entertainment station; BBC Horizon, specializing in natural history and docus; BBC Style; BBC Learning; and Arena, an arts channel. The channels will have access to the BBC’s entire program library.

The three other stations are BBC Sport; BBC CatchUp, featuring repeats of the Beeb’s most popular shows within days of their original transmission; and BBC One, a TV version of Radio One, the pubcaster’s pop and rock station.

In return for providing what amounts to 30 years of pay TV rights to all BBC programming, excluding news, cur-rent affairs and certain sports, plus its brand name, the Beeb wants to derive coin from what it hopes will be a growing asset, albeit in an untested market.

The Flextech agreement, which calls for eight new pay TV channels to launch in the U.K. later this year, runs through 2027, with a provision to terminate after 15 years. Flextech said it will spend £140 million ($86 million) to develop the channels.

Under an additional part of the pact, Cox Communications and Pearson will gain shares in Flextech in return for giving up their stakes in the UK Gold and UK Living satellite channels. UK Gold will be owned jointly with the BBC, while Flextech will have sole control of UK Living.

There are still terms of the pact to be worked out. The BBC wants only non-BBC branded stations to show com-mercials, but it is understood that Flextech expects all the channels to be advertising-supported.

Flextech is becoming an increasingly significant player in the TV biz. The firm controls or has stakes in 13 Euro-pean satellite channels, ranging for the British version of the Playboy Channel to the kids’ service TCC and retro channel Bravo. In 1994, the firm pacted with Hallmark Entertainment to produce a $140 million slate of 42 TV projects in the U.K.

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