Viacom Announces Digital TV Deal in France

France is emerging as the next big digital television opportunity for Hollywood, as Viacom announced a deal Wednesday worth $500 million or more.

Viacom said it agreed to license certain movie and television output to a European consortium for use on free television, pay TV, cable and satellite services in France.

In addition, the consortium will carry at least four Viacom cable channels, including Nickelodeon and VH-1, on a digital satellite service it plans to launch before the end of the year.

Viacom’s long-term deal is the first to be announced in France since digital technologies expanded channel capacity and set off a race in pay TV between Canal Plus and a consortium called Television Par Satellite that includes media concerns such as TF-1, France Television, France Telecom, CLT, M6 and Lyonnaise des Eaux.

France is expected to be the second-largest television market in Europe after Germany. Earlier this year, the leader in the German market, Kirch Group, agreed to spend about $6 billion to buy the rights to Hollywood studios’ movies and television shows for its new digital services, as well as for free television.

“This groundbreaking agreement is the first output deal of its kind ever in the French market,” Sumner M. Redstone, chairman of Viacom, said in a statement released by the company.

Kerry McCluggage, chairman of Viacom’s Paramount Television Group, said: “Germany and France are ahead of others in the digital race that is causing these consortiums to compete for studio product. Italy and Spain will occur, but it’s unclear when.”

Under the transaction, Viacom will license its current motion pictures to Television Par Satellite and TCM Droit Audiovisuels, a joint venture of TF-1, M6 and CLT, for pay TV, free television, basic cable and pay-per-view services. TPS and TCM will also have the use of Paramount’s library for broadcast, cable and satellite channels. Besides carrying Viacom channels on TPS’ digital service, Paramount will have an option to acquire a stake in TPS’ movie channel and pay-per-view service.

McCluggage said Viacom’s MTV will not be carried on TPS’ digital service because of a previous agreement with Canal Plus.