Murdoch in European Pact to Provide Satellite Pay TV

Rupert Murdoch on Wednesday teamed up with French companies Canal Plus and Germany’s Bertelsmann in a new alliance to provide satellite pay TV in Europe.

The deal strengthens the hand of Bertelsmann and Canal Plus in their battle for the German television market and answers the question of whom Murdoch would link up with in European pay television.

Murdoch’s News Corp. is a shareholder in Britain’s BSkyB, which will be a partner in the alliance, as yet without a name, which will launch the Premiere pay TV service in Germany in the fall.

Britain’s Pearson and France’s Chargeurs are the other main shareholders in BSkyB.

The move, which is subject to regulatory approval, creates a European stronghold in the pay TV market with three of its most aggressive players.

It also represents BSkyB’s first move into continental Europe.

Bertelsmann, Canal Plus and BSkyB will each have a 30% stake in the new joint venture and Canal Plus’s major shareholder, Havas, will own 10% in nonvoting shares.

In a statement, Canal Plus, Bertelsmann and Havas said their joint venture would speed up the introduction of digital TV in Europe.

Murdoch has also held talks with Luxembourg’s CLT and the latter issued a brief statement in which it announced it would continue with its own plans for digital television in French and German.

Havas, with Belgium’s Groupe Bruxelles Lambert, is a key shareholder of CLT, which runs the RTL TV channels.

Digital satellite pay TV is set to become a major force in the entertainment industry and a huge source of advertising revenue for broadcasters.

Due to the high costs involved in setting up the technical facilities, European media groups have been jostling for position in the hope of joining the team with the most popular decode.

Consumers are unlikely to put two decoders in their homes.