Rupe looking to shake up Teutonic TV

Media mogul confirms interest in market

COLOGNE, Germany — The German television market is overdue for a major shake-out, and global media magnate Rupert Murdoch is trying to position himself as the man to lead the charge.

The Australian-born media mogul confirmed his interest in the German TV market, the world’s second-largest after the U.S., during a keynote address to the Media Forum confab Sunday evening. But Murdoch failed to announce any major moves.

“We are a very small player here, but we will continue to respond to opportunities that present themselves both in Germany and elsewhere in Europe,” Murdoch said.

Vox growth plans

One of the opportunities Murdoch is hoping for is the chance to build the Cologne-based weblet Vox into a bigger player in the German market. “We want to make Vox an active force here,” he said. “We need the support of the other shareholders, but we’re working on that.”

Murdoch said he wants to launch firstrun feature films, sports and quality news on Vox, but was being blocked by Bertelsmann AG, which wants to keep Vox as an outlet for second-run movies so that it will not challenge its prime channel RTL.

Murdoch’s News Corp. holds 49.9% of Vox; Bertelsmann and French pay TV group Canal Plus each have 24.9%.

Murdoch said he wanted Vox to grab 10% of the German market from its current 3%.

“If we had unfettered control of Vox then yes — whether it takes DM700 million or DM900 million ($388 million or $500 million), we are willing to do whatever is necessary to make Vox a major force,” Murdoch said. He added that he was confident Bertelsmann would eventually give in.

Four views of TV

The German TV market is divided into four groups of commercial channels — the first generation from the mid-1980s, which was able to grow quickly at a time of 50%-plus annual growth in advertising revenues; a second generation that broadcasts reruns; niche or special-interest channels; and pay television.

But even now among the three prime feature channels — Bertelsmann’s RTL and two big stations owned by Bavarian media mogul Leo Kirch (Pro7 and SAT1) — only RTL and Pro7 are making money. “Together RTL and Pro7 make around DM400 million, but all the others combined lose more than that,” Murdoch said.

At the end of last year, RTL was still the biggest station with a 30% share of gross ad revenues, while Pro7, with 23%, was ahead of SAT1, which had 22%.

Digital pay TV on table

Murdoch said he was still considering whether to get involved in German digital pay TV but was not talking to Kirch, who has said he may shut down his DF1 station after the European Commission blocked a merger between DF1 and the Premiere pay net.

Murdoch once considered taking a stake in DF1, but bailed out early last year. Since then he has been considered a potential suitor for Kirch if the Bavarian tycoon’s relationship with Bertelsmann turned sour.

“We were very keen on digital TV in Germany,” Murdoch said. “They thought we were wrong and we thought they were wrong. It was all very polite. But that (digital decoder) box was just not a good piece of equipment and it cost too much money.”

Kirch’s DF1 has managed just 120,000 subscribers in nearly a year of operation, largely because of the high price of the digital decoder, which sells for around $555.

(Reuters contributed to this report.)