The Berlusconi owned Mediaset has been named by the Italian press as a potential suitor for the Spanish direct-to-home satellite platform Mediaset, with Telefónica on board as a local partner. Under the proposal, denied by Mediaset itself, the free-to-air terrestrial channel Cuatro becomes part of the equation for the first time.
The former Sogecable shareholder, previously linked with a separate bid from Vivendi, is currently in hot water with Italian politicians over its refusal to sell the 10% stake it holds in Telecom Italia.
Currently, the Spanish consumer is being tempted from all directions, leaving the sole DTH platform Digital+ struggling to hold subscriber numbers at the two million mark. Recent years have seen the arrival of IPTV services from operators such as the TeliaSonera-owned Jazztel and the incumbent telco Telefónica. Although present for over ten years, DTT has been given a new lease of life through the approval of new pay-TV services and ASO in 2010. The cable operator ONO is now largely digital, though faces severe financial challenges.
Against this background, Digital+ subscribers fell back from 2,001,000 at the end of March to 1,930,793 as of June 30, 2009. Average subscriber revenues came in at €41.5, the fall from €44.3 being partially attributable to a decline in pay-per-view revenues. The Prisa-owned business has flatlined in recent months, with the installed base now below December 2006 levels.
Ownership changes
Canal Satélite Digital, owned 83% by Sogecable and 10% by AOL Time Warner, launched its digital services on Astra at 19 degrees East in early 1997. Sogecable’s principal shareholders were Prisa and Canal Plus, the French pay-TV operator, later acquired by Vivendi. Sogecable had previously run a four-channel analogue package on Astra, as well as the local Canal+ affiliate.
In September 1997, Telefónica launched the Via Digital platform on the Spanish domestic satellite Hispasat at 30 degrees West. In the sports field, the two companies entered a bidding war to sign exclusive contracts with the domestic football clubs. After the government intervened with a 1998 law banning exclusive deals on selected sports, the two companies agreed to pool their rights into a joint venture known as Audiovisual Sport.
In May 2002, the two rivals announced a deal under which Sogecable would acquire Via Digital. A rights issue allowed Telefónica to become a 23% shareholder in the new entity and to select the chairman of the board.
To this day, both Astra and Hispasat satellite positions have been used, and even though Astra is responsible for the lion’s share of the distribution, local pride (and political pressure) led to a new agreement being signed with Hispasat in July 2007. The agreement included a series of joint marketing initiatives and promotions aimed at Spain’s satellite installers, focussing on the country’s many thousand communal antenna systems.
Vivendi sold its share in Sogecable in 2007, Telefónica withdrawing a year later and giving Prisa majority control, and with Cuatro, launched in November 2005 after the cessation of the Canal+ premium channel over the terrestrial network. Only a year later, Telefónica and Vivendi were back in the frame over a possible acquisition of the satellite business now known as Digital+.
Prisa would keep Cuatro, while reducing its debt pile, but the media giant balked at the proposed €2 billion that fell half a million euro short of expectations. Vivendi in particular has continued to make plain its interest in the Spanish platform and potentially faces competition from Mediaset, which already owns the Spanish channel Telecinco.
In the meantime, the lack of interest from its principal shareholder has not helped subscriber growth and a long running dispute between Audiovisual Sport and its rival Mediapro has battered pay-per-view revenues. A high water mark of €10.3 per month in Q1 2008 fell back to just €3.2 in Q3 2008. Prisa has not released later figures with the consolidation of the Digital+ business into its own accounts.
PVR
The iPlus PVR was launched in August 2007. The quad-tuner set-top box features twin satellite and DTT tuners and a 160GB hard drive that equates to around 80 hours of stored programming.
iPlus uses the NDS MediaHighway middleware and will be integrated with the existing EPG and remote control. Regular PVR functionality, such as Pause, Rewind and Series Link, is also included.
In addition to being compatible with HD services, the box also contains a separate DTT tuner. It is priced at €295 and attracts a monthly service fee of between €3 and €6. HD is still not a main mission for Digital+; just three channels – Canal+, Canal+ Deportes and Canal+ Dcine – are currently transmitted in the format.
In January 2009, the Provincial Court of Madrid (Audiencia Provincial de Madrid) ruled that Sogecable and its subsidiary Digital+ should be required to open up the market for decoders of the service. The judgement followed complaints from the Consumers Union of Pontevedra (Unión de Consumidores de Pontevedra).
The Union started proceedings on April 24, 2008, arguing that the contract imposed by Digital+ was illegal by forcing consumers to buy or rent the decoder from the operator in a market which could be worth €927 million.
As part of the evidence, lawyers recorded a telephone conversation between a consumer and the Digital+ call centre about the possibility of using a third party decoder. This was “not possible”, according to the call centre agent.
Canal Satélite Digital is likely to appeal the ruling, according to counsel Miguel Fernandez-Pedrera.
TVE contract renewal
Also that month, the Spanish public broadcaster TVE secured an extension to carriage on the Digital+ DTH platform after a new agreement was signed with owner Sogecable, currently part of media group Prisa.
The renewal covers flagship general interest channels TVE1 and La 2, as well as the broadcaster’s digital offer, which includes sports channel Teledeporte, with its coverage of the English Premier League, news channel Canal 24 Horas, children’s channel Clan TVE, music-based Canal Clásico and the documentaries and features on Docu TV.
Triple play
The agreement between Sogecable and Telefónica over the launch of a triple play service attracted the attentions of the Spanish communications regulator CMT. Under the June 2007 pact, the two agreed to split the Spanish pay-TV and broadband markets.
It was designed to allow Telefónica to offer Sogecable’s Digital+ DTH satellite service in areas that its broadband signal fails to reach. For its part, Sogecable is planning a new triple play package that includes digital TV, telephony and internet. The project went ahead in the fourth quarter, but the regulatory intervention resulted in similar agreements being drawn up with Yacom, Orange and Vodafone. This has created the impression of a subscriber benefit rather than something that is intrinsically part of the Digital+ offer.
A similar situation has evolved in the Digital+ mobile offer, though this is more easily compared with the packages available in other markets. A selection of mobile channels is available to 3G customers of Movistar (Telefónica), Vodafone and Orange, with the price varying according to the carrier. The line-up is drawn from a selection of channels that includes the Canal+ bouquet of movie and sports channels: Eurosport, Sportmania, Paramount Comedy, Adult Swim, Disney XD, Disney Channel, Cartoon Network, Boomerang, Baby First, Odisea, Historia (History Channel) and CNN+.
Internet delivery
In line with many European operators, the Spanish version of Canal+ offers a PC-based catch-up TV service. The streaming service – it is not possible to download individual titles – carries many of the popular genres carried by the channel such as movies, series, documentary, comedy, football and NBA. A feature known as Mi PlusTV (My Plus TV) allows viewers to book specific programmes for when they are available to view.
An element of social networking is included, allowing users to send the details of a specific programme to a friend. It is also possible to embed programmes into a blog. Content is streamed at around 500 Kbps and Windows XP, Mac OS X and Linux are all supported.
Packaging
Digital+ runs a number of different programming packages costing between €15 for a basic package of 41 channels through to the all-encompassing Premium Total for €62.95. The package features 89 channels, including the full range Canal+ bouquet. The premium channel has divided itself into three generalist and nine genre specific channels.
Source: Comisión del Mercado de las Telecomunicaciones (CMT)
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