Sat-ND, 14.7.97

Editorial Note

Great! Majordomo did it again. Yesterday's Sat-ND was not sent out because
the HTML version simply was too long :-( So, here's just the plain text
version. A more readable HTML version is available at

by Dr Sarmaz

Here's s short update on what happened in Rupert Murdoch's global media
empire over the past two weeks or so, followed by another edition of

	Rupert's Garage Sale
	Australian pay TV Merger?	
	Fox on the run
	Formula BSkyB
	The Other Sky

Sat-ND, 14.07.97 
	M2A Ground Stations
	DMX Revival Announced
	Savage Capitalism
	Background: CME
	Satellite TV for Zanzibar
	Throw Away Your Valium, Euronews is Coming to Canada
	Blo(o)mberg's Brain Washing
	Eek! Online
	Instant Internet
	Orbital Sciences; Telepiù; Canal+ Nederland

Rupert's Garage Sale
The business activities of Rupert Murdoch over the past two weeks were
marked by what an observer called a 'garage sale,' in other words: cash
generation by spinning off non-core assets. Interestingly, at the same time
rumour has it that Mr Murdoch's News Corp was seeking to increase its
current 40 percent share in British Sky Broadcasting.
As a matter of fact, BSkyB shares had fallen by 27 percent within just two
weeks. Ironically, this meant good news to Mr Murdoch. Sources close to the
company said that the price was now low enough for Mr Murdoch to
contemplate buying up more shares -- something he always wanted to do in
order to gain majority control. 
Such a move would allow News Corp to claim a greater portion of BSkyB's
huge cash flow and operating profits and enable the company to make better
use of BSkyB programming for its other TV ventures around the world. 
Since early June, News Corp has raised A$642.5 million (US$478 million)
under the 'asset sale programme' announced by Mr Murdoch in May. However,
he also said that News Corp would raise US$800 million. Among the assets
sold were stakes in PMP Communications, Australian Newsprint Mills, and
Computer Power Group Ltd. Mr Murdoch has meanwhile denied that the company
wants to sell its HarperCollins unit but admitted he's looking into running
the book publishing operation jointly with one or more partners.
An analyst noted that News Corp was "under pressure from the ratings
agencies and they need to be seen to be heading in the right direction,"
regarding Mr Murdoch's aggressive and costly expansion into U.S. movies,
network television and satellite television. 
Investors and analysts became concerned after News Corp's acquisition of
International Family Entertainment (The Family Channel) for US$1.9 billion,
and the US$1.1 billion sale of its U.S. satellite television assets to
Primestar -- unfortunately not for cash but for convertible Primestar notes
and stock.

Australian pay TV Merger?
The Australian Financial Review reported that Pay-TV groups Foxtel and
Australis Media Ltd were not only holding merger talks but that the merger
had already been agreed to by the key shareholders in each company.
Quoting an industry source, the paper said these discussions were no
secret; however, "no deal has been struck." It is yet unclear whether an
announcement will be made this week as any deal also needs regulatory
approval by the anti-monopolies group.
According to the newspaper, loss-making Australis would remain listed on
the stock exchange and become majority-owned by Foxtel partners News Corp
Ltd and Telstra Corp under the deal.
It also said Kerry Packer's Publishing and Broadcasting Ltd, a major
shareholder in Australis and its largest local financier, would become a
partner with News Corp in the rationalisation of the industry.
Foxtel/Australis would compete with the third player in pay-TV, Optus
Vision, which has more than 180,000 subscribers. Foxtel has attracted about
200,000 subscribers while Australis' satellite-based service has about

Fox on the run
Rupert Murdoch's Fox News will for the time being have to stay out of Time
Warner's New York's cable system. A federal appeals court upheld a lower
court ruling that found the New York mayor could not force the cable
operator to put Fox News on its systems in New York. 
Mayor Rudolph Giuliani had attempted to carry Fox News and Bloomberg
Television News on a city-operated government channel on the Time Warner
systems, which refused to carry either channel. The U.S. Court of Appeals
concluded that the city could not force the cable operator to carry
commercial channels on a channel that was reserved for government use. 
According to the New York Times, the issue will nonetheless come up again
next year when Time Warner has its cable franchise to be renewed. 

Formula BSkyB
The Independent on Sunday reported that BSkyB is considering investing in
Formula One Holdings in a move that could boost the broadcaster's slumping
share price...
......even though, as explained, the low share price may not be bad at all
for Mr Murdoch; and it's a bit unclear how another shopping spree could
boost its price anyway. Anyway, Formula One, owned by Bernie Ecclestone, is
preparing a launch on the stock market this autumn. The planned public
float is expected to value the company at up to 1.5 billion. The reported
BSkyB deal would also include the UK pay-per-view rights for the 17 Grand
Prix races of next year's season. Neither BSkyB nor Formula One would
comment on the deal. 

The Other Sky
This is one of those stories that do confuse. There is a Sky Network
Television in New Zealand, known for short as Sky NZ, but it is by no means
part of Rupert Murdoch's global media empire -- not yet, that is.
Currently, it is controlled by two U.S. regional phone companies. 
Mr Murdoch undertook a first attempt to control Sky NZ last February when
he tried to buy 80 percent of the TV service through News Corp's New
Zealand publisher Independent Newspapers Ltd but did not succeed. 
This time, Independent Newspapers is now reportedly negotiating to buy a 51
percent interest in the network from U.S.-based HKP Partners. The company
that is currently building up its cable TV operations across New Zealand is
owned by U.S. telecommunications companies Bell Atlantic and Ameritech.



Sat-ND, 14.07.97 - Scallion And Tomato Nerd Diet
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(c) Copyright by Peter C. Klanowski 

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M2A Ground Stations
Satellites? Sort of. The Titan Corporation today announced that it is a
member of a consortium led by Alcatel Telspace, a French subsidiary of
Alcatel, that was selected by PT Multi Media Asia Indonesia, a joint
venture between Pasifik Satelit Nusantara and Indosat to supply the ground
segment for Multi Media Asia Satellite Telecommunications System (M2A). 
M2A is an interactive Asian multimedia network expected ultimately to
provide telephone, fax, Internet access and television services to
approximately four million subscribers in several south east Asian
The contract awarded to the Alcatel-led consortium for the initial phase of
the system is valued at US$105 million. Titan's primary responsibility is
to develop and provide innovative hardware and software technology to be
integrated into the subscriber terminals used in the system. Other members
of the consortium include Alcatel CIT, a French member of the Alcatel
group, and Thomson Multimedia, the French consumer electronics company. 

DMX Revival Announced
The founder of DMX Europe, Jerold Rubinstein, has come up with a new
company that will continue the pay-radio service formerly known as DMX
Europe. DMX Europe filed for bankruptcy on July 1 and has ceased
transmission on the ASTRA satellite system in the early hours of July 11. 
Earlier, the service that was also carried in some digital TV packages was
replaced there by its competitor MCE. In addition, all smart cards of UK
listeners were blocked a few hours before the close-down of the service.
Time will tell what has really happened. However, there's some hope for DMX
Europe subscribers as Selco, the company that so far has marketed the
service in the German speaking countries, announced a DMX revival although
under a different name. 
XTRA Music Ltd, set up by Mr Rubinstein, has asked Selco to inform its
customers that a new service by the name of XTRA music will be available as
from September. It can be received with the same equipment, i.e. a
DMX-compatible ADR receiver. All fees paid so far by subscribers will be
acknowledged, and there will even be some kind of a bonus to compensate for
the break. 
In a press release of their own, XTRA Music (XM) said it had "acquired the
rights to the programming of DMX Inc. for several territories, which
include Europe. This programming was formerly distributed by DMX Europe NV.
In addition XM has acquired all of the rights an technologies necessary to
allow XM to deliver the programming by way of 'ASTRA Digital Radio' (ADR.)"
Interestingly, DMX UK, the DMX Europe company that seems to have folded
first, is not mentioned. DMX UK reportedly had attracted just 550
Next one. XM said it will take two to six weeks until the new service will
be launched but did not elaborate. Too bad, it would be interesting to know
what technical or other reasons cause the delay. Anyway, the press release
states that "the full compliment of DMX music channels will be offered over
the next several months." It was not mentioned, by the way, whether DMX
will return to those digital TV packages that have switched to MCE. 
Above all, the main question has to remain unanswered: will subscribers put
some trust the new service and deliver, say, one year's subscription fee
upfront? Or in other words: how can the new service survive when DMX Europe
couldn't? Whosoever subscribed to DMX Europe probably knew he or she would
take a certain risk. That's okay -- once. But once bitten, twice shy.

Savage Capitalism
Has the NWO (New World Order) finally arrived in Eastern Europe? In the
Ukraine, the lucrative TV market became a battleground of U.S. companies.
Central Media Enterprises (CME,) controlled by billionaire Ronald Lauder,
has set up commercial TV channels in several Central European Countries and
became market leader in almost every country where it got hold of a
license. Reportedly, CME invested some US$300 million but cashed in over
US$1 billion -- not too difficult because offering western TV programming
in Central European countries is about the same as selling water in the
But it's different in the Ukraine with its 52 million TV viewers: another
U.S. company, run by John Perekhid, had been granted a ten-year license to
operate the network UT-2 in 1993. That's at least what Perekhid thought
until Ukrainian officials decided last year to issue a new license for
The prime-time slots fell to an Ukrainian company by the name of Studio 1+1
that is half-owned by CME. It went on air on January 1 and has since then
gained a 30 percent audience share, offering predominantly original
programming as opposed to Perekhid who had not much more to offer than
yesterday's CNN news and Westerns [Bonanza?]
Perekhid has in the meantime filed a US$-750 million lawsuit in a New York
Court -- US$250 million in compensation and US$500 for the violation of TV
It is unclear whether this will affect the Ukrainian TV licenses even
though Perekhid is talking of bribery. CME president Leonard Fertig was
quoted as replying "This is blackmail."
Ukrainian officials have meanwhile come up with an explanation why the
license was re-issued. Information minister Zynowi Kulyk said that Perikhid
did not fulfil his promises. Having just his company's growth in mind, he
did not invest anything into Ukrainian television. "A typical case of
savage capitalism," notes Alexander Rodnyansky, director general of Studio

Background: CME
Central European Media Enterprises, set up by U.S. cosmetics heir Ronald
Lauder, has been building a media empire in Central and Eastern Europe. It
operates national stations in the Czech Republic, Romania, Slovakia,
Slovenia and Ukraine in conjunction with local partners. The most
successful station is the Czech TV Nova. CME reportedly is also eyeing the
Baltics, the Balkans and the former Soviet Union.
Observers called the abundance of television sets -- even in countries with
few telephones -- an odd legacy of the communist era. No coincidence,
explains Leonard Fertig, chief executive of London-based CME. "The
governments wanted to make sure everyone could hear the message." 
Nowadays, the audience gets different messages -- commercial messages. But
this is just the beginning, remarked David Murrell, chief executive of
KPMG's international media practice. "This is like UK television before
Channel 4. The market won't run out of steam for the next ten years."
All his is happening on the two to four terrestrial TV channels available
in each country as cable and satellite reach no more than a quarter or a
third of the population. Terrestrial channels are "scarce resources," knows
Fertig. "So when you win that there isn't much left for the next person."
Recent activities of CME: the company wants to take legal action against
the Hungarian media authorities. Although CME turned in the highest bid,
its competitors RTL Klub and Window on Europe were granted terrestrial
The Romanian channel Pro TV, which is controlled by CME, will launch a
cable channel in Moldova. That will cost not too much (US$1 million) as
most Moldovans happen to speak Romanian. [Should you happen to be bored,
just spend an afternoon researching that country's history. Even more
confusing than watching Bloomberg TV.]

Satellite TV for Zanzibar
Television Zanzibar (TVZ) plans to introduce more channels and increase air
time for its programmes. Currently, it operates for seven hours from 5 p.m.
to midnight daily. [And people there are still alive -- imagine that ;-)]
TVZ Director Hassan Mitawi was quoted as saying that there were
negotiations with a South African company on establishing a commercial
television channel. Broadcast via satellite, it would operate around the
clock. Mitawi said that the station also plans to introduce a distant
learning channel that would also be run on a commercial basis. 
TVZ also has plans to widen its receivership range to cover more towns on
Tanzania Mainland. (Did you know that in 1964, Zanzibar was merged with
Tanganyika to form Tanzania? Neither did I.)

Throw Away Your Valium, Euronews is Coming to Canada
Poor Canadians! Canadian Satellite Communications Inc. (T.SAT) said it has
filed an application with the Canadian Radio-television and
Telecommunications Commission for a license to broadcast Euronews, the
multilingual European news network, across Canada. 
T.SAT said in a press release that Euronews continuously broadcasts all
world news events as seen from a European perspective [if only they would]
and transmits simultaneously in five languages: French, English, German,
Italian and Spanish. 
Euronews would be uplinked directly from France via a transatlantic
satellite whose footprint includes Canada. [Yeah... they would run into
serious reception problems should they have chosen a satellite whose
footprint did not include Canada. <Sorry, just couldn't resist.>]

Blo(o)mberg's Brain Washing
Oh yes, and then there was Bloomberg TV. Not Blomberg, that's a German
manufacturer of washing machines. Come to think of it, both could indeed be
related in a way because staring into a washing machine in action is about
as confusing as watching Bloomberg TV.
So, what does Bloomberg TV do here? A UK version has started broadcasting
on ASTRA, reaching not only the UK but also parts of Europe -- unscrambled
and analogue. The service will form part of the Sky digital television
package which is expected to launch in the UK in 1998. Does that mean it
will disappear from European TV screens? Maybe, because what's shown
currently is definitely a UK version some parts of which are not too
interesting for viewers on the Continent. But there are so many Bloomberg
TV versions announced, e.g. a German one, that their analogue transponder
won't get cold too soon.
But what is it all about? Bloomberg's on-screen format resembles a computer
screen, noted a news agency, with a live presenter in one corner and text
information bars on the bottom and sides. Well, if I wanted something that
looked like a computer screen I would switch on my computer instead of the
tube. And if I wanted go get sick, I'd just stick my head into my washing
machine for a change.

Eek! Online
E! Entertainment Television has purchased the 50 percent interest in E!
Online so far owned by CNET Inc.
Launched August 5, 1996, E! Online, will now be a wholly-owned subsidiary
of E! Entertainment Television. In connection with the purchase, CNET has
agreed to license certain technology to E! and to provide technological and
marketing consulting services to E! Online. 

Instant Internet
If I remember correctly, the launch of WebTV in the UK was more or less
expected for the Christmas season. There's a saying, however, that the
early bird catches the worm. 
I won't speculate about the worm, but he early bird goes by the name of Net
Station. The device, which was introduced today, enables its owners to
access [yawn] the Internet and email services via standard TV sets in the
UK. Priced at about 300, the gadget comes equipped with 4Mb ROM and 8Mb
RAM, stereo audio-output and an HTML v3.2 browser that supports forms,
frames and tables.
Internet access via NetChannel is billed at a flat rate of 14.95 per
month. Local telephone call rates apply from anywhere in the UK.

Orbital Sciences; Telepiù; Canal+ Nederland
Orbital Sciences Corporation today announced that it has reached a
definitive agreement with CTA Incorporated to purchase its satellite
manufacturing and communications service business units. These units
generated revenues of US$80 million in 1996 and currently have a firm
contract backlog in excess of US$150 million. Orbital will acquire
substantially all the assets of these businesses in exchange for US$12
million in cash and, in addition, will assume certain liabilities,
including refinancing approximately US$25 million of the businesses' short-
and long-term debt. 

The Italian pay-TV channel Telepiù will be relaunched on September 1 now
that France's Canal+ has taken over control from German Kirch Group. The
first change will be the start of a music channel by the name of Match
Music, a localised version of French music channel MCM.

Canal+ is also active in the Netherlands following the merger with NetHold.
Canal+ Nederland has acquired the live broadcast rights to Dutch football
[soccer] for a five-year term. The deal that allows two matches per week to
be shown live on pay-TV channel FilmNet is worth some US$73 million.


Copyright (c) 1997 by Peter C. Klanowski, pck@LyNet.De. All rights
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