Localization Delays Israel Channel Launches

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Tel Aviv, Israel -- Regulations governing the localizationof foreign channels are delaying the launch of several new networks and hampering cableoperators in their effort against direct-to-home start-up YES.

The government claimed that the regulations, in existencefor a few months, are vital to the preservation of Israel's television industry andculture in general. While the government's "Open Skies" policy permitsforeign channels to be transmitted into Israel "as is," cable channels areprohibited from televising ads targeting Israelis.

At the same time, cable operators must pay a$1.50-per-subscriber, per-year fee to the government if the channels carry subtitling.

The fee is "not a great burden," claimed EliNissan, senior media consultant to the Regulatory Broadcasting Administration of theMinistry of Communications.

The cable industry differed. "Instead of bringing in10 to 12 subtitled channels, we can only afford to bring in two or three. The consumerloses," said Idit Herzeg, spokeswoman for Israel's No. 1 cable operator, GoldenChannels.

No fees have been paid yet as the cable industry voices itsopposition.

How the fees are to be spent is another contentious issue.

Each network is required to invest in local production tobe televised in Israel, which raises objections on the grounds of practicality andexpense.

"How are foreign channels going to add localorigination?" asked Pnina Schenhav, vice president of programming and marketing forcable operator Tevel Israel International Communications Ltd. "We are in negotiationswith Granada U.K. Is a British company suddenly going to make British drama inIsrael?"

As Golden Channels, Tevel and Matav Cable Systems MediaLtd., the country's other operator, hurry to sign new carriage deals, opposition tothe regulation continues to mount.

That's in part because it protects YES, which is dueto launch next spring, as it doesn't apply to any distribution platform with fewerthan 200,000 subscribers. YES is not expected to reach that level for some time.

Foreign programmers said they're disturbed by theregulations, even though Nissan claimed, "They accept it -- they're used toit."

Hallmark Entertainment Network, for one, has signedcontracts with Matav and Tevel to transmit with Hebrew subtitling. It also inked a dealwith YES to transmit with Hebrew, Arabic and Russian subtitles.

The channel's representative in Israel, Ami Ella,countered Nissan's claim. He said Hallmark stands to lose "a lot of money. Wehope advertising will be allowed in a few years."

Ella added that he's aware of other foreign channelsthat have expressed their frustration with the regulations. "But the platforms arethe people who must fight, and they're better able to do it than we can," hesaid.

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