Rival French TV Networks in joint cable venture

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PARIS--Top French TV networks TF1 and M6 have scrapped plans to launch competing cable channels aimed at attracting the young adult market and will instead pool their resources in a new venture called TF6, set begin operations in early-December.

The partnership on TF6, initially slated for broadcast on France's TPS cable and satellite system, will avoid a battle for audience share and advertising revenues between the two networks, each of which had planned to launch a cable channel aimed at attracting the coveted under-50 audience segment. TF1 and M6 are part owners in TPS, France's second digital cable system, which reaches just more than 1 million households, but are ferocious competitors in traditional broadcasting.

TF1 and M6 have committed $20 million to the new joint venture, which represents a drop in the bucket for their respective owners, French construction and communications giant Bouygues and Franco-Belgian utility and communications conglomerate Suez Lyonnaise des Eaux. But the $20 milion investment is a hefty chunk of change in France's compact audio-visual sector.

TF1 had to sweeten the deal to convince M6 to play along. It ponied up $20 million for a 50% stake in an existing themed channel, Serie Club, that already has strong brand recognition among the young adult target audience on several leading cable systems. And it hinted that the two networks could work together on future cable joint ventures linking similar programming, starting with competing home-shopping channels.

The agreement between TF1 and M6 came as a surprise to executives at independent agency Louis XIV, Paris, which was only tapped in mid-September to handle launch advertising for TFX, the channel TF1 planned to launch before the new arrangement with M6. The agency is scrambling to find details on whether its launch brief has changed given the new dimensions of the planned channel.

Copyright October 2000, Crain Communications Inc.

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