Inside move: Foxtel looking for fix

Costly H'w'd deals causing companies to rethink deals

Pay TV around the world has become a big headache for Hollywood’s congloms. From Germany and Spain to Argentina and beyond, payboxes that have done deals with the American majors for their movies are struggling financially — and trying to renegotiate what they say are onerous terms.

Latest is Australia’s Foxtel, whose top execs are in town to talk about a rethink of its deal for its so-called PMP movie channels. Foxtel toppers led by CEO Kim Williams will meet at Sony today with international execs from that studio as well as from Universal, Paramount and Fox. The four jointly own and provide the bulk of the product for PMP.

Foxtel execs hope to convince their Hollywood suppliers to cut in half the amount per subscriber per month that the platform pays the studios, to do future deals in Aussie dollars and to bring some much-needed creativity to the scheduling and marketing of the movie channel Down Under.

“Given the debacle in Germany with the Kirch Group, Hollywood execs may find it in their long-term interests to be more flexible in these deals. If they don’t watch out, they could kill off the goose, long before it has a chance to become golden,” said one pay TV expert, referring to some of the ailing payboxes abroad.

The studios may be willing to cut the high sub fees Foxtel forks over on the condition that the deals — due to expire in 2007 — are renewed way into the future.

How speedily and satisfactorily the studios work out the Aussie problem may indicate how likely they are to work well together in sorting out their problems in Germany.