The new ruling, which may take until 1997 to put in place, takes teleshopping out of the category of advertising under the TV Without Frontiers directive. The directive, which limits TV advertising time to 9 minutes per hour on TV, had lumped teleshopping into that category, effectively stopping its march across the Continent.
Another document within the European Commission proposes to treat multimedia services, including teleshopping, separately from broadcasting.
The opportunity to expand will give a much-needed shot in the arm to the U.K. operation of QVC, which is among the leading round-the-clock TV shopping services worldwide. Pending the availability of satellite space, analysts believe the channel will be a winner.
"The marketing opportunities in Europe are great," said Peter Fey, QVC's marketing and promotion manager in London. QVC launched here in October 1993 and is now received in a small number of cable homes in Denmark, the Netherlands and Ireland. But like most TV shopping operations, QVC sees satellite broadcasting as the gateway into the European market, which some analysts are conservatively valuing at $400 million. Research group Key Note, London, goes as far as to value the U.K. home shopping business alone at $10 billion by the year 2000.
Financial analysts at Goldman Sachs, London, forecast QVC will show its first profit, of $800,000, by the end of 1996 and $6.4 million a year later. But that would only be possible if it successfully implements its reorganization under new management.
Launched in October 1993, QVC has more or less remained stagnant in the U.K., while potential rivals plan a European invasion. One service set to start up there is HSN Direct Europe, a joint venture between the U.S.' Home Shopping Network and Kinnevik's TV-Shop Europe. Software giant Microsoft Corp. also aims to bring online shopping to Europe.
QVC, meanwhile, was poorly positioned to expand beyond the U.K. That market was chosen out of necessity because the U.K.'s liberal interpretation of the TV Without Frontiers directive made it one of the few European markets to consider teleshopping separate from advertising.
But there was a trade-off: because of limited satellite capacity in the U.K., QVC entered into a 50-50 joint venture with British Sky Broadcasting, Rupert Murdoch's U.K. satellite TV network. While BSkyB gave QVC much-needed satellite capacity, the arrangement also limited QVC's reception to 3 million satellite dishes.
The road has since been rocky. In the 16 months ended January 1995, QVC U.K. lost $12.8 million, excluding start-up costs. Barry Diller, outgoing chairman of QVC Inc., said: "It is losing money like a sieve."
Things are, however, already looking up. The company has bought back 30% of its shares from BSkyB, which now has only 20%, and arranged for the channel to be picked up by another 250,000 U.K. satellite dishes.
The next step is European expansion. QVC is talking to FilmNet, the Brussels-based pay-TV service, about entering the Benelux and Scandinavian markets and is also believed to be looking for a partner in Germany.