CLT management defines strategic priorities in free and pay-TV
CLT-UFA Luxemburg, September 18, 1996
CLT management proposes to its boards that the company concentrate in the future on the free-TV market, and strengthen and develop its leading position in Europe. Core markets are countries in which the company is already positioned such as Germany, the United Kingdom, France and the Benelux countries. Activities will be expanded to other countries in the future. After initial experiences with digital pay-TV, especially in Germany, it has become clear that free TV will remain the dominant form of television in the medium-term future. Therefore, the management of CLT will propose to its boards that CLT not launch at present time the digital Club RTL pay-TV bouquet in the German market. This strategic option has been the subject of in-depth discussions with future partner UFA, which shares this view and fully supports this approach.
However, in light of the future partnership with UFA, CLT will be active in the pay-TV business. The German pay-TV station premiere has been extremely successful, especially in recent months, and will be the future basis for pay-TV and the digital development of the future CLT-UFA group. At the same time, the French TPS project will be vigorously pursued. In parallel to this, the company will concentrate on sports rights trading, notably in pay-TV soccer rights.
Analysis shows that the economic prospects for an additional pay-TV offer in Germany - in addition to premiere and DF 1 - are extremely limited. Therefore, the launch of Club RTL at present would not appear to be timely. International programme software is currently largely overpriced, which makes the prospects of a profitable digital pay-TV venture very poor. In addition, following the decision of Canal+ (besides its participation in premiere ) not to jointly invest with Bertelsmann in Club RTL, the launch of a digital pay-TV bouquet represents a non-justifiable risk.
Furthermore, general conditions for digital pay TV have changed fundamentally, as Deutsche Telekom has announced its likely exit from MMBG. This re-opens the question of the technical standard for digital TV in Germany. Due to extreme irritation among hardware dealers and consumers, a market entry would have little chance of success.