HBO expands in Czech market

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PRAGUE -- Time Warner's Home Box Office (HBO) launched a new encrypted satellite delivery system on the Israeli-owned AMOS 1 satellite system on April 1, which has allowed it to expand its technical reach and programming hours in the Czech market and enter the Slovak Republic for the first time.

Home Box Office entered the Czech Republic as a program provider and as a cable operator through its subsidiary KabelNet in 1994. It offers three channels - the premium film channel HBO and two basic cable channels, SuperMax for children and a documentary channel, Max 1.

HBO has acquired 30,000 subscriptions out of 130,000 homes passed, or about 25% of the households where it has been available. But delivery of programming by tape to cable operators, which was an "effective market entry strategy," according to HBO Managing Director Phil Roter, also restricted growth. "We had capped our ability to deliver programming and needed to expand distribution now that we have established ourselves on the market," Roter says.

HBO now broadcasts for 12 hours on weekdays and 16 hours on Saturday and Sunday - a 64% increase - for the same monthly fee of $5.25. Programming is only available to cable subscribers, not direct-to- home (DTH) viewers.

The ability to expand distribution on the satellite system has made it possible for HBO programming to be distributed on Cable Plus for the first time. A US West International company, Cable Plus, controls about 70% of the Czech cable market with 344,000 subscribers out of a total 3.9 million Czech TV households. Cable Plus also reaches 89,000 customers in the Slovak Republic, which has about 1.3 million TV households, so giving HBO its first access to that market.

A points of sale and direct mail promotion has accompanied the growth in distribution. HBO's advertising account is handled by Cernak Christie Landberg, a small creative hot shop.

Copyright April 1997, Crain Communications Inc.

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