Record groups plan rivals to MTV: Local music-video channels to be established on a country-by-country basis

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The Independent Online
THE WORLD's five big record groups are planning to establish local music-video channels to challenge Viacom's MTV Network on a country-by-country basis in Europe, Asia and the Americas, beginning this year.

The four largest - EMI, PolyGram, Warner Music Group and Sony Music - are discussing a plan to replicate a music-video channel they established a month ago in Germany with the Hamburg radio executive Frank Otto.

A spokeswoman for Thorn-EMI confirmed that talks were taking place but said they were at an early stage. 'No decision has been taken yet.'

The German cable channel, called Viva, features mainly local artists and German-speaking video-jockeys.

The new venture would not tackle MTV on its home territory, the US, where it reaches 60 million households, until it has established itself elsewhere.

But another venture involving a fifth record group - the music division of Germany's Bertelsmann media conglomerate - and America's largest cable-TV company, Tele-Communications Inc, says it plans to launch a music-video retailing channel in the US later this year.

The Bertelsmann-TCI venture, first announced last year, would reach 10 million TCI subscribers and compete broadly with Viacom, which recently announced an dollars 8.4bn merger with Blockbuster Entertainment, America's largest video and music retailer.

An industry executive said that Viacom, an arch-rival of TCI in the takeover battle for Paramount Communications, plans to test music retailing later this year on both MTV and VH-1, its companion soft-rock channel in the US.

Music industry executives have expressed frustration with MTV's monopoly over the principal marketing medium for their products, complaining that the network - which reaches an estimated 250 million viewers worldwide - does not play enough of their output and can dictate royalty rates.

A spokeswoman for Warner Music Group noted that MTV's playlist was heavily biased towards American artists and labels. By contrast, about 60 per cent of the videos played on Viva are German.

Only on its new Latin American service does MTV feature 'vee- jays' who speak the local language.

The see-saw battle for control of Paramount Communications tilted back in favour of Viacom yesterday, when directors of the media conglomerate voted to shift their endorsement to its revised dollars 10bn offer.

Rival QVC, which has had the upper hand for the past month, now has until 1 February to revise its offer, which the Paramount board says is now slightly inferior to Viacom's. The Paramount board signed an original friendly dollars 8.3bn merger agreement with Viacom on 12 September, but was forced by a US court to convert the sale to an auction.