TS News - Digital Alliance For Italy

TELE-satellit News, 26 May 1997

Digital Alliance For Italy
  ROME, Italy, 97/05/26 (TS) -- The next few weeks will certainly be
decisive for the future of digital TV in Italy. Talks are currently
underway among RAI and Stet on one side and Canal Plus on the other side.
The objective of the talks is to reach an agreement by this autumn at the
latest, on which will depend if Italy will have one or more digital platforms.

  Several weeks ago, Italian state television RAI and the
telecommunications giant Stet (through its subsidiary Stream) signed a very
important agreement. RAI will take a 5% stake in Stream and a new joint
company will be formed. Provisionally called NewCo, it will be controlled
70% by RAI and 30% by Stream. It will be in charge of the development of
new thematic channels and for buying TV rights on the foreign market. In
simple terms, RAI will provide the know-how and Stream the financial capital.

  Canal Plus who controls Telepiu is currently the only digital program
provider in Italy. However, it is in Canal Plus's interest to reach an
agreement with other partners. Currently, Canal Plus has a 45% stake in
Telepiu, while the other 45% is held by Kirch and 10% by Silvio
Berlusconi's Fininvest. Talks between Canal Plus and Kirch on the French
company taking over Kirch's stake have being going on for several months
but with no visible result in sight. If no cooperation agreement is reached
between Canal Plus and RAI/Stet, Italy will have two competing digital
platforms and it will be interesting to see whose side will take the other
major Italian TV players Mediaset and TMC who are currently standing by the

  If a favorable agreement is reached, there will be only one Italian
digital platform, controlled by Italian companies but with a large stake
held by Canal Plus. It would be in charge of satellite and cable
distribution (thanks to Stet) and would enable the transmission of all the
major Italian TV channels as part of the "bouquet". One important advantage
of a single digital platform is that there would be no costly war for
obtaining the TV rights to major Hollywood titles.

  However there are some problems which may appear if an agreement is
reached. The first is that the agreement would not be looked upon favorably
by the Italian and EU antitrust authorities. The second is that for Canal
Plus an agreement would probably be rewarding in a financial sense but on
the other hand would decrease its ability to control the platform. A
compromise agreement of sort is also possible which would see the major
players using the same digital platform, but there would be at least two
bouquets of channels, owned by RAI/Stet and Canal Plus/Telepiu. This would
however provoke a bidding war for the movie TV rights.

  According to the Italian daily "La Repubblica",  the managers of Canal
Plus are examining a proposal for substituting all of the 80,000 digital
decoders that have been bought by the subscribers to Telepiu's digital
satellite service. New decoders similar to those used in France would be
sold which is expected to considerately bring down the price of the
receiving equipment. The scrambling system would not be Simulcrypt but a
closed system, not compatible with the current Italian norms.

  By: Branislav Pekic
(c)TELE-satellit 1997. All rights reserved.

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