Pay movie channel challenges BSkyB

A GROUP of cable television companies will shortly launch Britain's first pay-per-view (PPV) movie channel in a direct challenge to BSkyB, the satellite television network that is controlled by Rupert Murdoch.

The channel, Home Cinema, is being launched by London InterConnect, a consortium of six companies, including TeleWest and Videotron, that hold cable franchises in the capital.

The group is on the verge of signing an agreement with some of the biggest Hollywood film studios, enabling it to screen recently released films to subscribers. A deal is expected to be announced sometime in the next few weeks.

In a separate move, the group is also understood to be considering a PPV channel for sport. Sources suggest this could be achieved by developing Wire TV, which currently provides lifestyle programmes, into an all-sport channel later this year.

Wire TV, managed by Flextech, the UK media group, is already diversifying into sport. It recently outbid BSkyB for exclusive rights to the 1996 Cricket World Cup with an offer of pounds 7.5m, and it has also paid pounds 600,000 for Wimbledon tennis coverage with the BBC later this summer.

Home Cinema is expected to charge between pounds 3 and pounds 5 per film. Subscribers will be offered a daily selection of movies which will be broadcast at fixed times. They will 'book' their selection through an electronic device at home. Initially the service will be available only in London but it is expected to be widened to other parts of Britain before long.

The move could pose a strong challenge to BSkyB as PPV stations are normally granted screening rights about nine months after cinema release. In contrast, 'pay TV' channels - such as those on BSkyB that charge an all-inclusive subscription fee - typically obtain rights after a gap of about 18 months.

But experts say Home Cinema's success will ultimately depend on whether it gains the rights to show live broadcasts of major sports events such as cricket internationals or boxing matches. In the US, Home Box Office, which is part of Time Warner, has a huge following and is able to charge about dollars 30 per fight.