Will auds pay up for paybox?

Sogecable sees stock more than double to $23

MADRID — Sogecable’s newly merged digital TV platform, Digital Plus, has done a BSkyB since its July 21 bow. The multibillion-dollar question is whether it will enjoy the success of Rupert Murdoch’s Blighty paybox.

Takeup at Sogecable’s former digital bouquet, satcaster Canal Satelite Digital, was driven by premium channel Canal Plus Espana: 96% of CSD subscribers bought the sports/movie service.

Merging CSD with rival Via Digital, Sogecable has torn up the road map and is plotting a different course.

Digital Plus’ new star, as Canal Plus Espana CEO Jose Manuel Lorenzo affirms, is a distinctly Rupe-ish premium tier that obliges new premium subs to take not only three versions of Canal Plus Espana but also either three movie or three sports channels. The deeper-pocketed can, of course, buy both.

All the premium packages carry at least two Disney channels.

These eight-channel combos never existed before, so Sogecable sidesteps a government price freeze on existing services.

Yet they force new premium clients to upgrade at some cost: CSD’s Canal Plus Espana and basic package cost 41 euros ($46). Without the basic, Digital Plus’ new sports and movie packages, Canal Plus Deporte and Canal Plus Cine, both weigh in at around $40.

With Digital Plus, like Spain at large, Sogecable stands somewhere between the U.K. and France.

Running up 6.3 million subs in four years, BSkyB’s main draw remains its massive range — north of 120 channels — and relative cheapness of its basic options, which cost $34 a month.

Sogecable’s main draw, like France’s Canal Plus, is its premium offer. In France, that is still the analog version of the single channel Canal Plus, which has become a cultural icon and has 3 million subs compared to digital satcaster Canal Satellite’s 2.3 million subs.

In Spain, Digital Plus will stand or fall by its premium combos, which are $24 cheaper than Sky Sports or Sky Movies.

But will Spaniards pay more for much more pay TV?

The market has thought so of late. Sogecable has been the star performer on Spain’s IBEX 35 bourse in 2003, seeing its stock more than double to $23, not much below its launch-price of $26 in 1999.

Currently boasting 2.5 million digital or analog subs, Sogecable aims for 3 million by 2005 and a monthly average revenue per user of $47.60 to $50.40, well up from the present $42-$45.

“The ARPU targets are reasonable,” says one analyst. “I think most clients will go for the premium options,” says Enrique Jimenez, an analyst at Ibersecurities. “After 2005, with very stable costs and a powerful dominant market position, Sogecable should be a cash cow.”

Analysts’ main worry, however, is that Spain’s pay TV culture is not as developed as the U.K.’s.

The runup to the new soccer season, which kicks off in September, is traditionally a strong takeup period, and Sogecable has earmarked $13.4 million to market Digital Plus.

Sogecable’s fate will not be sealed by fall, but it will, at least, sense if its new course is the right direction.

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