Matsushita looks at stake in BSkyB
Friday 04 April 1997
The story was fuelled by the fact that Matsushita is understood to have already entered into a partnership with BSkyB, BT and Midland Bank to create a joint venture, the Interactive Services Company, which the companies would use to subsidise the UK launch of digital television.
They are expected to spend up to pounds 500m between them to cut the cost to subscribers of the set-top boxes that will be needed to unscramble signals and allow users to access interactive services such as home shopping.
Analysts admitted that BSkyB might need to raise finance to fund its share of the subsidy, which will cut the cost of boxes from the full retail price of about pounds 400 to between pounds 200 and pounds 300. But they played down speculation that the company might want to issue shares to Matsushita to do so.
BSkyB's shares, which have been highly volatile thanks to the small free float not held by Rupert Murdoch's News Corporation, Granada and other founder investors, started moving after Matsushita told reporters it was talking with many European broadcasters about taking possible stakes, including BSkyB.
Yesterday BSkyB's shares closed 7.5p higher at 612p, having been 14.5p higher at one point.
Seinosuke Kuraku, who heads Matsushita's European division, said the company was seeking a broadcasting partner in each area of the European market and BSkyB was one candidate.
Matsushita is mainly interested in getting its television hardware into people's homes and sees an equity stake as the best way to get leverage in the competitive market.
Japan recently decided to launch terrestrial digital broadcasting as early as 2000, and analysts estimated that Japan's five terrestrial broadcasting stations, including their group firms, would spend about 1,000bn (pounds 5bn) to replace their studio-use equipment by 2000.
Matsushita holds a 15 per cent stake in DirectTV Japan, along with Mitsubishi Corporation, Mitsubishi Electronic Corporation and US company Hughes Electronics.
DirectTV will start beaming 100 channels later this year when it launches digital satellite broadcasting in Japan.
In Britain, there are plans to launch digital cable, digital satellite and terrestrial digital services by next year. BSkyB was planning to launch its satellite service at the end of this year, but the start of that service is thought to have been put back three months after a delay to the launch of the Astra satellite it will use.
BSkyB is also involved in one of the two consortia bidding to run digital terrestrial TV. Its partners in that venture are Carlton Communications and Granada.
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