AUDIOVISUALS: EUROPEAN ENTERPRISES ENTER INDUSTRIALISATION PHASE.

PositionCompany Business and Marketing

The German-Luxembourg CLT-UFA group controls 22 television channels attracting more than 120 million viewers, and 18 radio stations in nine European countries. One of the group's rare weaknesses was in programme production. Pascal Josephe, Chairman of International Media Consultants Associes (IMCA), believes the proposed merger of CLT-UFA with Pearson is consistent with the process of vertical and horizontal integration being seen worldwide. The lack of a European "major" to face down the challenge from the United States has long been regretted. This type of agreement shows that the phenomenon of concentration in well under way on the old continent. In a similar move, the Spanish telecommunications company Telefonica recently made a Euro 5.5 billion bid for the Dutch producers Endemol Entertainment (television and Internet).In addition to the medium-content marriage represented by the CLT-UFA/Pearson TV alliance, other major agreements are also in the offing. The Chairman of the Board of the German Bertelsmann group (joint owner of CLT-UFA), has pointed to discussions on cooperation between the new group and Canal+, notably in the area of sports and film rights. Pierre Lescure, Chairman of Canal+, meanwhile emphasises the clear complementarity between the leading free television provider (CLT-UFA/Pearson) and his own group, Europe's leading subscription channel.Agreements between the two giants would give them real power on the rights market. The fundamental challenge facing television operators concerns both the in-house production of programmes and control over associated rights. These rights vary according to whether programmes are to be broadcast on free channels, subscription channels or on new mediums such as the Internet.At a meeting of financial analysts in London, Didier Bellens Managing Director of the CLT-UFA, who is set to take the helm of the new group, indicated that he would be delighted to shortly announce an acquisition in the area of television production. This round-about declaration did not...

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