News

MTV Germany, Kirch Make Digital Advances

1/31/1999 7:00 PM Eastern

Frankfurt, Germany -- MTV Germany and The Kirch Group have
picked up speed on the digital front.

MTV said it plans to launch up to five digital channels,
split between Germany's cable and digital direct-to-home platforms.

In cooperation with Deutsche Telekom A.G., the
country's dominant telco and cable operator, MTV will "soon" launch two
digital channels -- M2 and MTV Select -- MTV Germany general manager Christiane Salm zu
Salm said.

Deutsche Telekom will officially launch its digital bouquet
in April. So far, it only includes a so-called ethnic package of channels, which will be
expanded.

MTV also has three separate digital channels in development
for Kirch's DF1 digital-DTH platform, although details remain sketchy. It is unclear
when the channels -- MTV Charts, MTV Rock and MTV Jazz -- will launch, MTV and DF1 said.

DF1 currently has only "the option for these
channels," DF1 spokesman Nickolaus von der Decken said.

DF1 -- which was troubled by a slow subscriber uptake when
it launched in 1996 -- is now picking up speed. It currently claims about 300,000
subscribers, and it expects that number to double by the end of the year.

Last week, The Walt Disney Co. said the long-delayed German
launch of its digital Disney Channel will take place this fall on DF1. The platform also
secured exclusive German rights to the Wimbledon Championships tennis tournament for the
next three years.

Kirch's increased push is necessary because its
competitors are also making advances.

The Free Universal Network -- an alliance of some members
of the ARD public-broadcaster group, along with equipment makers -- was officially
unveiled last week. FUN plans to use digital set-top decoder boxes based on the OpenTV
standard to compete with Kirch's "d-box."

Galaxis, a FUN member and equipment manufacturer, already
produces the boxes. So far, they can only receive ARD's digital-broadcast signals.

Competing with the d-box may be difficult. There are
currently about 750,000 d-boxes in the German market. About 450,000 are used by
subscribers to the digital-premium services of pay TV provider Premiere, of which Kirch
owns 25 percent. Galaxis expects to produce 30,000 of the Open TV-compliant boxes by this
fall.

Kirch last week published specifications for its
application-programming interface, which will enable service-providers, such as Internet
and interactive-gaming companies, to program their individual applications for the d-box.

The d-box will also be capable of using public broadcaster
ARD's "bookmark" feature. ARD has criticized the d-box for its past
inability to do so, defending its own digital approach. Now, ARD says it will re-examine
the possibility of using the d-box for its own digital applications.

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