on Continental friends and foes - Media - News - The Independent

on Continental friends and foes

Wily BSkyB may be in trouble over rugby, having been blamed by some for threatening the very existence of the Five Nations Cup through its rank-breaking deal with England. It may still run into regulatory problems in the UK, depending on what the Office of Fair Trading says in its long-awaited report on pay-TV. But its position on the Continent looks firm enough to warrant smug smiles at Sky's Isleworth headquarters.

Consider that just two weeks ago, BSkyB's grand alliance for the launch of digital TV in Europe lay in tatters, its relations with the German giant Bertelsmann strained to the point of ugliness and its share price fluctuating.

Now, BSkyB, the UK's dominant pay-TV company, is back in the driver's seat, with a freshly minted German digital deal in its pocket and a brand new partner in the form of Leo Kirch, the secretive Bavarian media mogul. The two plan a high-stakes all-digital service starting at the end of the month, promising 17 new channels and holding out the prospect of as many as 200 by next year.

The Kirch-Sky link was a classic manoeuvre by Rupert Murdoch, who owns 40 per cent of BSkyB, and his lieutenant Sam Chisholm. When it became clear to them that Bertelsmann's Michael Dornemann was dragging his feet on the earlier digital alliance, and that he was hell-bent on angering Canal Plus, its erstwhile "strategic partner", by backing the French pay- TV broadcaster's rival, CLT, then Murdoch and Chisholm merely marched off to the competition.

Kirch and Bertelsmann have long been jockeying for advantage in Germany, a potential goldmine for pay-TV given how under-developed the market is. It was also unclear which way Murdoch would lean - toward the well- heeled Bertelsmann, which has already developed a functioning decoder for set-top boxes, or Kirch, one of the world's leading rights holders, with 50,000 hours of television and 15,000 movies sewn up.

Not surprisingly, BSkyB today says that Kirch is by far the better partner (how fickle media barons are!). Together, the two companies have the satellite transponders, programming and money to launch a digital service.

But the game is not quite over, for Bertelsmann is already vowing revenge of sorts. Insiders there insist that the German company has not abandoned the pay-TV market, and is prepared to push ahead, with or without Canal Plus (which is still on the sidelines), with its own digital satellite service. Sources at Bertelsmann concede that two digital platforms would be one too many in Germany, and would probably mean a rerun of the BSB- Sky debacle of the late Eighties, when the two competitors freely bled their way to a messy merger. But that is the threat to Sky. "We may not make any money," Bertelsmann seems to be saying, "but we will ensure that you don't either."

All this is posturing, of course. Nobody sets out to lose money, and in view of the fact that both sides know they can't win unless there is co-operation, the only question is: on whose terms?

One outcome could be a four-way link grouping Sky, Kirch, Bertelsmann and Canal Plus. For that to happen, the chilly relations between Sky and Bertelsmann would have to warm up considerably. The European Commission, moreover, might have something to say about a carve-up among all the big media players of a system capable of rolling out across the continent, to Italy, Spain, France and beyond.

More likely, perhaps, is for Canal Plus to join Sky and Kirch, leaving Bertelsmann to concentrate on its powerful position in terrestrial television.

Without a doubt, there will be digital TV in Germany by the end of the summer. And without a doubt, there will be but one digital platform in Germany - eventually. There may have to be a bloodbath first, as Bertelsmann tries to queer the pitch for Messrs Kirch and Murdoch. But in the end, there is no room for two competing systems.

This is not an argument in favour of Kirch's decoder over Bertelsmann's planned system. Nor has it anything to do with who would be the better marketer of pay-TV services. Nor, of course, does it mean that no one else should be allowed access to the digital platform. The Commission is bound to insist on "fair and open access" for broadcasters.

But the battle now is about the delivery system. The winners are likely to be those who get their product to market first rather than those with superior technology. That means Kirch and Murdoch are in pole position, and the others will probably now have to fall in line.

Suggested Topics
News
Residents of James Turner Street such as White Dee will have a chance to share their experiences of benefits on a Channel 4 spin-off show
peopleBenefits Street star says mixed-race children were subjected to trolling
Sport
David Moyes and Rio Ferdinand
FootballRio Ferdinand on why the former manager failed at United
News
Piers Morgan tells Scots they might not have to suffer living on the same island as him if they vote ‘No’ to Scottish Independence
news
Life and Style
techIndian model comes with cricket scores baked in
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100Exclusive interview with the British analyst who helped expose Bashar al-Assad's use of Sarin gas
Arts and Entertainment
Keira Knightley and Benedict Cumberbatch star in the Alan Turing biopic The Imitation Game
film
Arts and Entertainment
Rob James-Collier, who plays under-butler Thomas Barrow, admitted to suffering sleepless nights over the Series 5 script
tv'Thomas comes right up to the abyss', says the actor
News
newsIn short, yes
Extras
indybest
News
Denny Miller in 1959 remake of Tarzan, the Ape Man
people
Sport
BoxingVideo: The incident happened in the very same ring as Tyson-Holyfield II 17 years ago
Life and Style
Jourdan Dunn gave TopShop’s Unique show some added glamour at London Fashion Week
fashion week
News
Groundskeeper Willie has backed Scottish independence in a new video
people
Arts and Entertainment
The Doctor poses the question of whether we are every truly alone in 'Listen'
tvReview: Possibly Steven Moffat's most terrifying episode to date
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Resourcer / Junior Recruiter

£15-20k (DOE) + Benefits / Bonus: Guru Careers: Joining as a Resourcer / Juni...

Head of Design & UX / UX Architect

£55 - 70k: Guru Careers: Head of Design & UX / UX Architect is needed to join ...

Media and Entertainment Lawyer - City

Highly Competitive Salary: Austen Lloyd: CITY - A specialist opportunity with ...

IT Application Support Engineer - Immediate Start

£28000 per annum: Ashdown Group: IT Software Application Support Analyst - Imm...

Day In a Page

These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week
The fall of Rome? Cash-strapped Italy accused of selling its soul to the highest bidder

The fall of Rome?

Italy's fears that corporate-sponsored restoration projects will lead to the Disneyfication of its cultural heritage
Glasgow girl made good

Glasgow girl made good

Kelly Macdonald was a waitress when she made Trainspotting. Now she’s taking Manhattan
Sequins ahoy as Strictly Come Dancing takes to the floor once more

Sequins ahoy as Strictly takes to the floor once more

Judy Murray, Frankie Bridge and co paired with dance partners
Wearable trainers and other sporty looks

Wearable trainers and other sporty looks

Alexander Wang pumps it up at New York Fashion Week
The landscape of my imagination

The landscape of my imagination

Author Kate Mosse on the place that taught her to tell stories