PerfecTV deal makes Japan big Sky country

Merger set for May

TOKYO — The clouds hanging over Japan’s direct broadcast satellite service industry began to dissipate on Tuesday when PerfecTV and JSkyB announced the terms of their merger, which will create the nation’s largest platform in May.

The two will form SkyPerfecTV, which will start service May 1 with 140 to 160 channels, officials for the two platforms said at a Tokyo press conference. The two firms inked a merger agreement March 9 to create a new company with a capitalization of 40 billion yen ($315 million).

The major investors in the new platform are Rupert Murdoch’s News Corp., Sony Corp., Fuji Television Network Inc., Softbank Corp. and Japanese trading house Itochu Corp. Each company will have an 11.375% stake in the new firm.

Trading firms Sumitomo Corp., Nissho Iwai Corp. and Mitsui & Co. will hold 6.83% shares and Japan Satellite Systems Inc. has 6.88%.

One interesting twist in the merger is that Fuji TV’s rival network Tokyo Broadcasting System (TBS) will be a partner in the venture. TBS bought into PerfecTV partially to counter Fuji TV’s move into JSkyB and now it has a 5% stake in SkyPerfecTV.

JSkyB president Hajime Unoki said the new firm hopes to line up 1 million subscribers from Japan’s 44 million households by the end of the year. PerfecTV, which has been in operation for more than a year, already has about 600,000 subscribers.

Unoki will become chairman of the new firm.

PerfecTV president Koya Mita will be the president of the new venture and said at the press conference that consolidation in Japan’s satellite broadcasting industry was inevitable.

“Cutthroat competition among three service providers would not do any good for the industry,” he said.

The merger leaves DirecTV Japan as the odd man out. DirecTV, partially owned by Hughes Electronics Corp., started service in December. Industry sources said the company has had a difficult time in attracting subscribers in the early going. DirecTV has not released any subscriber figures.

Japan’s Post & Telecommunications Ministry is standing behind the merger, industry sources said, and it is likely to soon give the nod to a number of channels that have applied for broadcast licenses on the new platform.

The next big move in Japan’s satellite broadcasting market will come in 2000, when a Japanese government digital broadcasting satellite takes to the air. Pubcaster NHK will step up its satellite presence at that time and Japanese networks also are planning channels that will be broadcast on the BS 4 satellite.

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