Mergers, Expansion Stir Net Talk at MIP

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Cannes, France -- While there was much talk on the Cannes
Croisette about absent buyers -- The Walt Disney Co. was even a no-show on the exhibitor
side -- there was still plenty of headline-making news at last week's MIP-TV program
market here.

Atop the list was confirmation from both parties that rival
Middle East pay television platforms Orbit Satellite Television and Radio and Arab Radio
& Television are in talks that might lead to some sort of cooperation.

Orbit president and CEO Alexander B. Zilo confirmed that
the Saudi Arabian-owned platform is in discussions with ART. "At this stage, merger
is much too strong a word," Zilo said. "But any cooperation between us, at
whatever level, will benefit both sets of shareholders."

ART president Sheikh Saleh Kamel took a slightly more
circumspect view, saying that cooperation is good, "but not marriage." Kamel
also indicated that the drive for talks came from Saudi Prince Al Waleed, who owns 30
percent of ART.

Amid the merger talk, pay TV programmers were busy with
their own activities.

National Geographic Worldwide president Sandy McGovern said
the company will boost its U.K. coverage with two new channels this autumn. National
Geographic Channel made its global debut in the United Kingdom barely 18 months ago, and
McGovern said it will again test a new model there.

First will be an NGC multiplex, shown one hour ahead of the
original feed, transmitted on British Sky Broadcasting Group plc's digital
direct-to-home platform.

This will be followed by a brand-new -- and yet-unnamed --
channel that McGovern said will be "furrier and cuddlier" than NGC. That
offering is likely to compete head-to-head with Discovery Communications Inc.'s
Animal Planet.

McGovern didn't comment on market speculation that it
will partner with News Corp. on a version of NGC for North America. "We are
continuing our search for the right partner in a market that will be our most expensive
investment yet," she said.

Meanwhile, Fox Kids Europe is making its own advances,
president Ynon Kreiz said. In a strategic shift, Kreiz will also head Saban Merchandising
Europe, effective July 1, taking its licensing and merchandising effort closer to the
regionally controlled markets.

Fox Kids Russia, a 12-hour-per-day satellite and cable
channel, is set to bow Tuesday (April 20), just weeks after Fox Kids' Romanian
launch. Fox Kids is now in 12 European countries.

E! Entertainment Television is also spreading its wings in
Europe. Fresh from launching in Poland April 1, E!'s next move is into the United
Kingdom, senior vice president of international development Jon Helmrich said.

"Our No. 1 goal is to launch in the United Kingdom,
and it will be on-air this year, with or without [BSkyB's] help, although we very
much want [BSkyB] alongside us," Helmrich said, adding that syndication deals in that
market represent between 8 percent and 10 percent of E!'s international income.

At the same time, "we could run a Style block on an E!
channel, or an E! block on a Style channel," Helmrich said. "They are
complementary services."

Helmrich also said the Polish launch "is our
springboard for Russia, and the channel for that market is happening sooner than we
anticipated."

A&E Television Networks is also eyeing Poland,
according to A&E international vice president John Cuddihy.

Although he declined to comment, it's known that
A&E would like to partner its The History Channel with a firm other than rival Polish
digital-platform rivals Wizja TV and Canal Plus Polska. Zone Vision Group of Cos. and HBO
Poland are speculated to be on A&E's list of possible partners.

Success in this area would enable A&E to springboard
into other Central and Eastern European markets.

Cuddihy said the United Kingdom's expected 1
million-plus digital viewers by autumn make the launch of new channels there more
favorable.

"We have other ideas, and we'll be discussing how
those ideas fit into the plans of BSkyB," he said. A&E is partnered with BSkyB in
that market.

While Cuddihy declined to discuss specifics, one
possibility could include the U.K. launch of A&E's Biography Channel. Its
programming is a nightly mainstay of The History Channel in the United Kingdom.

A&E is already affiliated with France's AB Sat
digital DTH platform on La Chaine Histoire in France, and now, "We are negotiating to
acquire equity in the channel," Cuddihy said.

Scripps Networks is also seeking a greater European
presence, vice president of international development Kristen Jordan said. The aim is to
establish more dedicated and branded program blocks in order to build upon its program
distribution.

Similarly, ZDTV is looking to expand in the digital arena,
worldwide sales director Tom Grams said.

"The time is right," he added.
"Increasingly, people are turning off the TV set and favoring their PCs [personal
computers]. Our channel helps to reverse that and also fills a superb niche."

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