BERLIN — German digital pay-TV web DF1, which could previously be received only over satellite, will soon be available to up to 1 million German cable households.
While this will rub balm on the wound of a failed start, observers doubt that these cable contracts will solve DF1’s serious difficulties in attracting subscribers.
DF1 has recently signed contracts with several smaller cable companies, including Bosch, and will be offered to cable customers for an additional subscription price in certain areas of Germany starting this month. To receive DF1’s signals, cable and satellite households must spend around $525 for a decoder box.
Since its launch in July, the digital channel has only signed on 30,000 households, far below the anticipated 200,000 by the end of 1996.
DF1 blames its troubles largely on its failure to gain access to Germany’s nearly 17 million cable customers. Deutsche Telekom AG, the gatekeeper of most German cable systems, has demanded control of subscriber management, as well as packaging and marketing, of digital channels using its cable systems.
Media mogul Leo Kirch, sole owner of DF1 since British pay-TV web BSkyB backed out on its agreement to take a 49% share in DF1 recently, has so far resisted the conditions for cable access imposed by Telekom. Premiere, an established analog pay TV channel with nearly 1.5 million subscribers, has also been unable to get its digital pilot projects fed into the Telekom’s systems.
But while Premiere can rest comfortably on its analog subscriber base until its digital version takes off, the money-losing DF1 is under pressure to find a solution to its problems.Since BSkyB bailed out, there has been intense speculation that Kirch is seeking another partner for DF1. Media giant Bertelsmann, which holds a 37.5% stake in Premiere and which, together with Canal Plus, effectively controls the channel, would seem to be a logical choice. Kirch owns 25% stake in Premiere, but has thus far been unable to convince the other shareholders to place Premiere on the DF1 platform.
Bertelsmann to rescue?
Kirch, who spent an estimated $6 billion securing the pay TV rights from the Hollywood majors for the next 10 years, hopes he can lure Bertelsmann over to DF1 with the prospect of a steady supply of premium movies.
But Bertelsmann does not appear to be worried about the future of its pay TV channel. Premiere managing director Bernd Kundrun told Daily Variety that Premiere plans to start producing its own programming, and is comfortably furnished with soccer and other sports rights for the next several years.
According to Rolf Schmidt-Holtz, president and CEO of Bertelsmann’s TV unit CLT-UFA, no agreement with Kirch is on the immediate horizon.
“Of course we are willing to talk,” Schmidt-Holtz told Daily Variety, “but since Murdoch pulled out, Kirch is in a difficult position. It has become clear that (DF1) is not being accepted in its current form. That won’t change in the immediate future. The pressure on Kirch to find a solution is increasing. Maybe that will lead to more productive negotiations. But at the moment, there’s (no agreement) in sight.”
‘It has become clear that DF1 is not being accepted in its current form.’
Bertelsmann TV unit prexy