Sources said that the Home Cinema channel would transmit top-line films soon after their release, charging consumers a set fee for each viewing. This would compete with Rupert Murdoch's BSkyB, which broadcasts Hollywood films on its subscription channels .
Associated, which runs Channel One on cable, has made no secret of its cable and digital TV aspirations. Mirror Group, which this summer launched its Live TV cable channel, is also keen to expand in the pay TV area, having been limited by the Government's proposed media cross-ownership rules from expanding into terrestrial commercial television.
The talks, which are still at an early stage, follow on from attempts early this year to launch a PPV sports and film service on cable, sponsored by leading UK cable operators. Those efforts foundered when BSkyB signed agreements with Telewest and Nynex, the two largest cable operators, to supply programmes for up to 10 years.
In exchange, the two cable companies agreed not to finance competing services which might have jeopardised Sky's stranglehold in these markets. Nynex and Telewest subsequently withdrew from negotiations to launch Home Cinema