NEWS

‘Bubble’ of digital TV bursts in face of Greek media group

Last Wednesday’s collapse of Alpha Digital pay-TV channel came as no surprise to the television and sport market. Fees for covering matches and expensive contracts signed by most first-division teams led to the liquidation of Alpha Digital Synthesis (ADS) and its merger with rival platform Nova, owned by NetMed. Two years ago, NetMed paid 3.5 billion drachmas (10 million euros) for the first-division championship, while last year, Alpha shelled out 24 billion drachmas (70.4 million euros), including 1 billion (2.9 million euros) for television rights to Panachaiki’s home games for a year and another 5 billion (14.7 million euros) to Olympiakos. The «chronicle of a death foretold» had begun some time earlier. Even before ADS went on air, it was talking to Nova about the possibility of a merger. When talks broke down, and negotiations with the Hellenic Telecommunications Organization (OTE) and state television (ERT) also came to nothing, Managing Director Stathis Tsotsoros decided to go ahead with Alpha Digital, blind to the messages coming from the market and what was happening in other countries. In Europe over the past year and a half, it has emerged that digital television has not been as popular as expected, a situation not helped by the economic recession. It has not been the best of times for the development of newer, more expensive media. Nevertheless, Alpha did not think that two pay-TV platforms – even if not of similar content – were one too many for the small market in Greece (with a population of 11 million), when even advanced media audiences such as Britain could not sustain them. It appears that the age of fatted calves has long gone in the European media. In Britain, ITV Digital, with whom first-division teams signed a 516-million-euro contract, has closed. Three years ago, Canal Plus had a 275-million-euro contract with the French teams, but with its finances in a slump, the channel will be negotiating smaller amounts. In Spain, teams that are now earning 180 million euros will have to settle for less next year. In Germany, the bankruptcy of the Kirch group has sent ripples through the soccer world. For the next three years, teams will be earning about half – 290 million euros down from 400 million. At the same time, ADS was seeking alliances and mergers even with groups the size of Kirch, and smaller ones in Spain and Italy. Market players wonder how such a plan could have been implemented (a crazy one indeed, according to representatives of Rupert Murdoch, whom Alpha Digital’s president had contacted a year ago) and how businessmen such as Dimitris Kondominas and representatives of the Onassis Foundation could have become involved in such a risky enterprise. According to one view, Tsotsoros wanted to get into NetMed at all costs, so he needed as many subscribers as possible in order to increase his negotiating power. In an agreement on the sidelines, shareholders in the former ACS hold 22 percent of NetMed without any real form of control. Nor is NetMed required to assume any of the responsibility for Alpha Digital’s debts. NetMed is also expected to end this year at a loss. The winner will be Multichoice, which has managed to stay on as Greece’s sole digital platform, referred to by Alpha Digital in the announcement of its dissolution as the «other Greek pay-TV channel.» If they so desire, Alpha Digital’s subscribers can transfer to Nova, which will thereby increase its subscriber base. There is a problem for those who have subscribed to both or who have paid advance subscriptions. Once again, Greek subscribers are being asked how much they are willing to pay to watch their soccer teams play. There is likely to be a small increase in the total price of a subscription to existing pay-TV services.