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Kabel courts U.S. channels …

… and technology would be nice, too

MUNICH — The topper of Germany’s Kabel Deutschland, Roland Steindorf, is in a confident mood.

His company is set to become the second largest cable company in the world after Comcast if Germany’s cartel authority approves its ambitious expansion plans in the fall.

The company, which has 10 million customers, owns six of Germany’s nine regional cable systems and wants to take over the remaining three, Ish in the state of North Rhine-Westphalia, Kabel BW in Baden Wuerttemberg and Iesy in Hesse, giving it another 7 million subscribers.

And Steindorf reckons it’s a shoe-in — even though Germany’s anti-trust watchdogs are notoriously hard-nosed. Two years ago they rejected Liberty Media’s $5 billion bid for the cable franchises now owned by Kabel Deutschland.

Despite that, Steindorf is moving ahead looking for international program providers, the world’s second largest market after the U.S.

Steindorf is in New Orleans this week at the National Cable & Telecommunications Assn. confab (May 2-5).

“We want to introduce ourselves to program providers from around the world and let them know that they have the possibility of coming onto German television.”

Kabel Deutschland plans to invest E500 million ($592 million) in its technical infrastructure and digital services and is eager to find partners at the confab.

“We want to look at the technical advancements in America and see what there is that we can use for Germany,” he says. “We are also looking for partners to help develop our electronic program guide. In terms of products and service, Germany and Europe are far behind America.”

Structurally, Kabel Deutschland differs from its U.S. counterparts: Kabel Deutschland doesn’t produce or provide any of its own content.

In Steindorf’s words, “We’re like a big department store with lots of shelf space. We have big shelves for large displays and small shelves for small items.”

Kabel Deutschland carries free and pay TV channels and services, including Premiere, the only nationwide paybox platform, as well as single outlets like Universal’s Sci Fi and 13th Street, and foreign language channels.

Company is in negotiations with Tele Munchen topper Herbert Kloiber to launch three channels, Actiongate, Toongate and Homegate. Other U.S. majors, including Sony, are considering setting up their own digital outlets.

It also carries the terrestrial TV channels of RTL and ProSiebenSat.1 plus pubcasters ARD and ZDF.

While RTL had initial misgivings about Kabel Deutschland’s pricing scheme and the possibility of losing reach, the commercial broadcasters now appear to have embraced the new carrier.

Indeed, ProSiebenSat.1 is even looking at launching its own digital webs.

Kabel Deutschland’s digital rollout will be complete by 2010. Most of its customers still have analog cable. Germany’s digital TV subs include the 3 million Premiere customers plus 150,000 viewers who subscribe to various digital offerings.

“The introduction of this open platform will change the market structure to the advantage of the consumer,” says Steindorf. “Viewers will get more diversity and more choice.”

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