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German pay TV players squabble over Premiere

BERLIN – A top manager of German media giant Bertelsmann AG expressed concern on Thursday that French media group Canal Plus SA may sell its shares in German pay TV channel Premiere to Bavarian media magnate Leo Kirch.

Rolf Schmidt-Holtz, head of Bertelsmann TV/Film in Europe, denied recent assertions made by Michel Thoulouze, chief executive of Canal Plus Intl., that Bertelsmann wants to pull out of the digital pay TV business, saying that Toulouze’s statements can be seen as an attempt by Canal Plus “to justify in advance its abandonment of Premiere and to hide the fact that it is realigning its European interests in cooperation with Kirch.”

Bertelsmann and Canal Plus each have 37.5% of Premiere; the Kirch Group holds the remaining 25%. Since Kirch launched German digital pay TV web DF1 in July, however, the shareholders have disagreed on the digital future of Premiere.

After dropping its plans to market its own digital pay TV channel bouquet together with Luxembourg-based broadcaster CLT early this fall, Bertelsmann has focused its energies on preparing a digital form of Premiere.

While Kirch wants Premiere to become part of the DF1 platform, Bertelsmann refuses to allow Premiere to turn over control of its 1.3 subscribers to DF1, which can currently claim only 20,000 customers. In recent months, DF1 and Premiere have been waging a legal battle against one another over the right to broadcast premium films.

While Bertelsmann’s and Kirch’s interests clearly diverge, it is less clear what role Canal Plus is currently playing in the Premiere-DF1 conflict. Premiere has been conducting digital pilot projects using Canal Plus’ Seca decoder box.

There have been recent speculations in the international press that Canal Plus wants Kirch to forfeit his share in Italian pay TV channel Telepiu (in which Canal Plus and Kirch each hold 45%) in exchange for Canal Plus’ stake in Premiere. These suspicions have been fueled by Canal Plus’ decision to place specialized channels of its Multi Thematiques web on the DF1 platform, as well as recent statements made by Thoulouze in which he referred to Kirch as the “champion in pay TV” in Germany.

So far, Canal Plus has said this is merely one of several possible scenarios, while the Kirch Group has declined to comment. But Bertelsmann officials have made it clear that they will not allow Kirch and Canal Plus to divvy up the European pay TV pie without consulting them first.

“If Canal Plus decides to sell its shares in Premiere,” said Bertelsmann spokesman Nikolaus Formanek, “it will have to offer the shares to us as well.”

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