German media group Bertelsmann AG said Tuesday that its money-losing infotainment weblet Vox could not be salvaged and would be liquidated early in April.
In a press release issued after office hours, Bertelsmann spokesman Manfred Harnischfeger said, “Our intensive efforts at reaching an acceptable agreement have led to nothing.” Sources at the 15-month-old Vox were unavailable for comment.
This is the first time in 10 years of German commercial television that a start-up channel has failed to catch on, suggesting that even the buoyant TV market has its limits.
Bertelsmann, which had a 24.9% stake in the venture, was the last remaining shareholder after several others began to pull out two months ago. Because of a contractual clause, Bertelsmann had only until the end of this month to find new partners.
Recent talks with Time Warner Intl. and Disney execs reportedly failed to enthuse the U.S. studios enough to entice them to take equity stakes in the channel.
Because Bertelsmann is already a partner in the profitable private web RTL and pay TV service Premiere, it was legally prohibited from upping its stake in Vox.
The failure of the Vox venture — Germany’s first “infotainment service”– should not put a damper on Bertelsmann’s TV plans. As board chairman Mark Wossner said last week, “He who is afraid of taking such risks can’t win in the European TV market.”
Harnischfeger said commercial TV has “seen its limits in Germany and Vox was probably the last big chance at setting up an ad-supported general entertainment channel.” At the same time, the statement continued, “Opportunities are presenting themselves in the field of new products in the digital world.”
Bertelsmann is involved with the Kirch Group, German Telekom and Canal Plus in Media Service GmbH, a Berlin-based company catering to the upcoming needs of future digital programmers.
Having dropped all that was unique in its programming, Vox was broadcasting old U.S. sitcoms to poor ratings results. Two of the web’s main frequencies were taken away last week by the government licensing committee and given to pubcaster WDR.
Although the web will go into liquidation as of Friday, Vox will continue to exist until all media rights questions are settled. It is technically possible that the web will be taken over from the liquidator, yet according to Harnischfeger, “No high hopes should be held out for that.”
Vox shareholders are estimated to have lost about360 million deutsche marks ( $ 205 million) in 1993 and stand to lose a total of $ 359 million.