London -- Rupert Murdoch made a rare, surprise appearance
before the press here last week to announce that his News Corp. media empire is making
progress in TV investments in Continental Europe, where his overtures have often been
Murdoch announced the creation of a new entity called News
Corp. Europe, which will not have a set budget, but will instead examine each project on a
What's more, Murdoch said, News Corp. has a draft
agreement to take a 39 percent stake in Stream, the digital-cable and satellite platform
in Italy run by telco Telecom Italia. Powerful French broadcaster TF1 will take a 10
percent stake in Stream, as well.
"There are two great markets in the world: One is in
North America, and the other is Europe," News Corp. chairman Murdoch said. "You
cannot globalize your company's activities without a major presence in Europe. We
place the greatest importance on this."
Murdoch, in fine humor, spoke for an hour and touched on
almost every European market.
Murdoch has often made deals or statements aimed at
increasing his involvement in Continental Europe, but all of the proposed joint ventures
have ultimately fallen apart. He recently announced a deal to acquire a stake in
Germany's TM3 channel, adding that to his ownership position in another German
Murdoch's pledge seemed to play a role in the dramatic
drop in the share price of Canal Plus Nov. 23, when it plunged 8.5 percent. The news may
have hit the shares particularly hard because Murdoch's investment in Stream puts him
in direct competition with Canal Plus in Italy. What's more, Stream's other new
partner, TF1, is Canal Plus' nemesis in France.
Together, News Corp., TI and TF1 plan to launch a
100-channel platform through Stream to compete with the D+ satellite service run by
Telepiú, which is 90 percent-owned by Canal Plus. However, Murdoch acknowledged that the
agreement was tenuous at this point, and that it could fall apart.
Provided that the deal moves ahead, Stream is expected to
counter D+ by focusing more on pay-per-view and interactive channels, and it is expected
to take full advantage of TI's massive marketing and distribution power.
"Being owned by Telecom Italia means that we have just
signed a deal to tap into their extensive network of telephone retail outlets to
distribute our decoders and subscription packages, bringing our sales points nationwide up
to 2,500," noted Vincenzo Russo, Stream's head of external relations.
Stream currently has just 88,000 subscribers, compared with
nearly 400,000 D+ subscribers. However, Stream launched a major marketing initiative this
month: It is offering a free six-month subscription to its current bouquet of 12 thematic
channels as a fall/winter promotion.
Murdoch's new emphasis on the Italian market was also
reflected in last week's announcement that Letizia Moratti, former head of Italian
public broadcaster RAI, will be chairman of NCE, based in Milan, Italy. She will also join
the main News Corp. board and the board of British Sky Broadcasting.