Liberty Global, which owns the UPC and Unitymedia cablescos, says it is maintaining its monthly content costs at under $2 per subscriber despite pressure from content providers looking to derive additional revenues from new HD and VOD services.
The pressure facing free-to-air commercial channels unable to monetise the upgrade of existing services to high definition has been well documented. In Germany the ProSiebenSat.1 group is currently pursuing additional carriage from cable operators to replicate what it hopes to achieve through the satellite-driven HD+ package. Meanwhile in the UK ITV has struck a deal with Sky for the carriage of additional HD services within a pay bouquet while their SD conterparts remain FTA.
Since the acquisition of Unitymedia in January, Germany has become a major market for Liberty Global, and President Mike Fries says HD is an important component in that marketplace. “There is value for us is launching more HD content because we’re able to put a smarter device in the home and generally we’re able to charge for that, so we’ll work creatively and constructively with providers of HD content to find win-win ways of getting that content distributed”.
Already 13 HD channels are available through Unitymedia, but although the public service channels can be found, HD versions of the key commercial channels remain absent from the bouquets. Kabel Deutschland faces similar issues, though has struck deals for the HD versions of RTL Television and Vox. Last week Unitymedia enabled the DVR functionality on its Echostar HD PVR product introduced at this year’s ANGA Cable.
Fries said Liberty was willing to spend more money on content for its digital platform in the knowledge that digital video subscribers across the UPC network provide the cableco with double the revenue. “We benefit meaningfully from a very fragmented programming deal in Europe, which means in short the cost of programming for us is a fraction of what it costs a US operator, on average we spend around €2 per subscriber per month for all of our content. That would be less for analogue subscribers and more for combined analogue and digital subscribers. That wouldn’t purchase much in the US from programme providers”.
Liberty is currently focusing on the acquisition of HD and VOD content and in the future will turn to IP and online rights for the company’s version of the TV Everywhere concept and its Horizon digital box product.