German ad industry cautious on Murdoch, Kirch Pay-TV deal

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MUNICH--German ad agency execs and media buyers say it's difficult to assess the immediate impact of this week's surprise link up between Rupert Murdoch's BSkyB and Germany's Kirch Group to launch a digital pay-TV service in Germany on July 27.

BSkyB has agreed to take a stake of up to 49% in Kirch's DF1, which will begin transmitting an initial 17 channels to Germans who install a d-box, or set-top box to unscramble the digital signals.

Unlike Germany's private TV stations, films on DF1 will not be interrupted with commercials. DF1 plans to only run commercials at the beginning and end of films and sitcoms. Children's programs will not be interrupted, either.

"For the time being there will be no run by advertisers to grab ad time," a media manager says. "There is no research for the time being. It could be a very long until agencies find out which programs the viewers prefer."

The advertising campaign to launch DF1 is being handled by Munich-based ad agency Serviceplan.

The BSkyB/Kirch alliance is a significant setback for German media giant Bertelsmann. It replaces a deal agreed only four months ago between Murdoch's BSkyB and Bertelsmann to forge a Europe-wide pay-TV alliance. A Bertelsmann-led alliance involving Canal Plus and Havas is launching a digital pay-TV service in Germany.

BSkyB is an experienced pay-TV operator, with more than 5.2 million subscribers in the U.K., while Kirch has a massive movie library and holds the TV rights to a number of European sporting events.

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