Shopping, Italo style

HSN, Scandi system join forces on network

Nonstick pots, flashy rings and collectible dolls are about to flood Italian airwaves.

Home Shopping Network and Scandinavian Broadcasting System, both U.S.-backed companies quoted on Nasdaq, have formed a 50-50 joint venture to operate a home shopping network in that Euro territory.

The joint venture between the Barry Diller-backed HSN and the Euro-based TV and radio broadcaster SBS is the first such partnership between the two companies. The two are believed to be jointly investing between $25 million and $35 million in the undertaking.

HSN-SBS will be distributed on the Rete Mia broadcast network, which reaches approximately 14 million of the 20 million TV households in the country. Rete Mia, one of 12 broadcasters granted a national license, currently airs round-the-clock infomercials and is profitable.

HSN will manage the live shopping operation, including establishing support systems and the sourcing of product. SBS will provide broadcast distribution for HSN-SBS Italia through its partial ownership of Rete Mia.

“There’s definitely a hole in the Italian market for a sophisticated, live shopping venture,” SBS chairman and CEO Harry Sloan told Daily Variety.

On the air in 4th quarter

The channel will be on the air late in the fourth quarter of 1998 and is expected to expand its broadcast hours. SBS, which acquired a 10% stake in Rete Mia in January 1997, also intends to exercise its option to acquire the remainder of the company along with the right to direct the programming of the station.

“As a result of our work together in Italy, we have begun preliminary discussions with Barry Diller and HSN management about the possibility of expanding our relationship to include other territories in Europe,” said a statement from SBS. Sources suggest that Eastern Europe, a region where SBS already operates several entertainment channels, could be ripe for further HSN-SBS joint ventures.

HSN already holds minority interests in shopping channels in Germany and Japan, and recently launched Home Shopping en Espanol, a joint venture with Univision. SBS has controlling interests in eight TV stations across Europe, from Sweden to Slovenia, as well as in 12 radio stations.

“We see this venture in Italy with SBS as a natural extension of our international strategy, particularly in light of its proximity to Germany and the introduction of the European ‘Euro’ in January,” said Michael McMullen, president of Home Shopping Network’s international division.

(Cecilia Zecchinelli in Milan contributed to this report.)