Down to Earth: Satellite Technologies, Industries, and Cultures

Chapter 11: Content vs. Delivery: Content vs. Delivery The Global Battle for German Satellite Television

1 1 @ Content vs. Delivery The Global Battle for German Satellite Television paul torre Three days after the launch of its digital pay TV platform Premiere World, powerful German rights trader Kirch Group predicted that Rupert Murdoch’s News Corporation and other competitors were permanently blocked from grabbing a significant chunk of the pay TV market in Germany. —E. Hansen, The Hollywood Reporter, October 5, 1999 Getting content that will attract and hold subscribers is the primary critical success factor for the management of a digital platform. It is all about getting content before someone else spots its potential, and then tying up the rights exclusively. —Alan Griffiths, Digital Television Strategies In the era of globalization, influential policy actors are based not only in national governments but also in supranational bodies, regional and local administrations, as well as transnational and translocal networks and corporations. —Paula Chakravartty and Katharine Sarikakis, Media Policy and Globalization Media expansion is a risky business, and the success of a new media venture depends on a number of factors. The challenges of competition, cooperation, and regulation are omnipresent considerations. Is it more important to control the media content, or is a successful launch dependent upon control of the delivery system? Within the media industries there are many examples of the basic conflict of content versus delivery, of television producers versus cable companies, or, in the context of emerging media, of gaming companies versus mobile providers. One entity may own the content while another owns the distribution system. In a number of cases, media cross-ownership, or consolidation across sectors, may bridge this bifurcation, as in the case of Disney producing television programming for its ABC television network and, even more directly, for the ABC stations that Disney owns and operates. Media industries typically function as competitors, even if cooperation and consolidation may smooth out many of the ostensible conflicts. Regulation of media industries often complicates media-sector expansion, with regulatory bodies deciding how best to arrange and control these fundamental conflicts over the production and delivery of media content. Media regulation at supranational levels involves governmental regulatory bodies that oversee the transnational or global interests of the media industries. Media companies confront challenges of acquiring content, developing technologies, securing delivery systems, addressing regulatory demands, jockeying with competitors, and finding an audience. These challenges have been central to efforts to launch digital and satellite television in various contexts, as I explore in this analysis of the launch of satellite television in Germany. In his discussion of the launch of the Star and Phoenix television ventures in Asia, Michael Curtin considers the combination of infrastructure, politics, and brand management as a set of “sociocultural forces” confronting those companies launching satellite television. For instance, “within the infrastructural realm, government regulation and market forces significantly influence the configuration of delivery systems for satellite TV.”1 In this chapter I analyze the competitive arena, the regulatory environment, the political complexities, and the marketing challenges, both inside and outside German borders, as digital satellite television was developing in the territory. Moving Toward Satellite Television In the mid-1990s, with more than thirty million television households and a growing economy, Germany was considered the strongest market for television revenue, primarily via advertising. In 1994, the German media company the Kirch Group, the cable company Deutsche Telecom, the pan-European conglomerate Bertelsmann, and the French media company Canal Plus joined together in an attempt to launch the first digital television service within Germany; the service was called Media Service GmbH (MSG), but the consortium was blocked by the European Commission (EC).2 The EC, citing its action against the proposed merger, noted that while it would “continue to favor agreements which promote technical progress, and which promote market entry, [it] would not allow agreements or mergers which have the effect of foreclosing markets or creating dominant positions, or giving the parties the possibility of denying access to new entrants.” In this instance of supranational media regulation, the concern was to preserve competitive content vs. delivery 205 markets, to disallow an alliance that could have led to “excessive pricing, as well as a loss of innovation and product variety.”3 In July 1996, however, the Kirch Group successfully launched Digitales Fernsehen 1 (DF1), the country’s first digital and satellite television service, one that promised dozens of channels to satisfy multiple niche audiences. Bertelsmann, with major holdings in Germany, was offering the pay...