Europe is about to be engulfed in a multibillion-dollar television war that promises big profits for its media companies but, in the eyes of opponents, threatens the cherished cultural heritage of individual countries. ”Television without frontiers,” as it has been dubbed, has become a celebrated cause shaping up as a major test over Europe`s much-ballyhooed plan for greater economic unity by 1992.
A Luxembourg company made the opening volley Feb. 5, when it switched on Astra, a 16-channel direct-broadcast TV satellite that allows households in most of western Europe equipped with a $350 antenna to pick up the same programs. Homes, especially in England, are beginning to sprout dish antennas.
Initial consumer demand for Astra satellite reception appears strong in England, where Dixons, the leading consumer electronics retailer, reports it has 8,000 customers awaiting installation of dish antennas.
Danielle Galloway, of suburban London, was one of the first to plug into Astra, paying $455 to have a 24-inch antenna mounted to the side of her home. She said she was ”quite pleased” with the investment, noting that the picture quality was better than on the four land-based channels.
”My husband wanted the 24-hour sports, and I wanted the films, ” she said. ”There`s not much on the regular tele.” Nevertheless, old habits die hard. In a telephone interview, Galloway acknowledged she was tuned to Channel BBC-1, produced by state-owned British Broadcasting Corp.
Not all of the early customers are entirely happy, however. William Clark, 75, of the village of Iver, west of London, complained that his antennas, installed Feb. 13, don`t get the 18-hour-per-day sports channel, the thing he really wanted.
Clark, the first in his village to have the dish, said he likes the films, news and reception. But he has complained repeatedly to the shop that sold him the antennas about the sports channel. ”They still can`t get an engineer until next Thursday,” he said. ”I`ve got to wait a fortnight to get the damn thing working.”
The $237-million Astra satellite is expected to be joined this year in space by multichannel, transnational TV satellites from France, Britain, Sweden and West Germany, in addition to a wave of new land-based stations.
Up to 200 new channels may be created in the next few years, giving a suddenly wide choice to viewers and advertisers accustomed to having just a few national channels.
Astra`s premiere sets the stage for a political showdown in Europe. Though the 12-nation European Common Market prepares to eliminate trade, capital and labor barriers by the end of 1992, the countries are split over the prospect of surrendering their long-held right to control what their citizens see on TV.
The agreements for the 1992 reforms don`t specifically address broadcasting. Nevertheless, investors are pushing forward with their plans to launch transnational television companies.
Publishing magnate Rupert Murdoch has led the way with his Sky Television project, which has taken up six of Astra`s channels. Two of them, a movie channel and a European version of the Disney Channel, are to be subscription services, and the others-arts, news, sports and general entertainment-are to rely on advertisers.
Two other English-language channels on Astra, one for sports and the other for women`s programming, are being produced by British book retailer W.H. Smith. Astra also has rented out three transponders-devices on satellites that relay signals-to Scandinavian television services, and it has earmarked the remaining five channels for German-language programming.
Astra and particularly Murdoch`s Sky Television will be challenged in the British market this fall by a five-channel satellite to be launched by a joint venture called British Satellite Broadcasting. BSB, which has raised $619 million and is seeking $525 million more, is backed by Pearson PLC, publisher of the Financial Times, Reed International, Granada Television and Bond Corp. of Australia.
BSB plans to operate three of the channels, offering movies, news/sports and general entertainment. However, BSB is seeking government approval also to operate the remaining two channels.
Astra and BSB employ different antenna systems and incompatible broadcasting formats, which will force British consumers to choose between them if they want more than the four nonsatellite channels currently offered. Whereas Astra broadcasts to the European continent as well as England, BSB is aimed at England.
”BSB executives have said there will be only one winner, and instinct leads me to believe they`re right,” said Mark Astaire, analyst with Hoare Govett brokerage firm in London.
Astra officials predict they will reach 800,000 to 1.15 million households in England by the end of 1989, and BSB hopes to capture 400,000 homes. But advertising agency Saatchi & Saatchi is less enthusiastic, predicting that no more than 418,000 British homes will have bought equipment to receive either service in the period.
Both appear to be preparing for a war of attrition. Murdoch reportedly has budgeted first-year losses of up to $200 million.
Though Murdoch and BSB initially are counting on pay-TV revenue from their premium movie services, they ultimately are targeting the advertiser. By 1992, advertisers are expected to double their spending on European TV to about $21 billion, or 30 percent of their spending on all media, according to European Association of Advertising Agencies in Brussels. In 1987, European advertisers spent $9.5 billion on TV, or 23 percent of total media spending.
”Advertisers are hungry for more choice, more airtime and lower costs that competition, at least theoretically, will bring,” said an international media planner at a major London ad agency agency.
Though the satellite makes transnational advertising possible, experts predict it will be a long time before advertisers are in a position to take advantage of the technology. They point to a shortage of pan-European brands, language barriers and cultural differences that force marketers to formulate different sales pitches for different countries.
”Pan-European advertising will take a long time to come of age,” said David Grimbley, media analyst with UBS/Phillips Drew stockbrokers in London. Its development, he predicted, ”will be limited by the pace of cultural convergence” in a post-1992 environment.
Another problem the new TV industry faces is that Europeans don`t watch a lot of TV. A recent study showed that the average European household watches little more than two hours a day-less than one-third the time logged by U.S. households.
What`s more, surveys indicate that in markets such as Belgium, where most homes have access to multichannel cable TV, the additional choice has not stimulated viewership.
”I don`t think Europeans will change their viewing habits very much,”
said Alistair Tempest, director of the ad agency association. So, he said that audiences will be splintered and that ad spending, though increased overall, will likely be insufficient to support all the channels.
Politicians are locking horns over the concept of ”television without frontiers”-a Common Market effort to draft a directive to liberalize a tangle of regulations that restrict the content of TV programming and advertising from country to country.
”It`s political dynamite,” said a source at Societe Europeenne des Satellites, the private Luxembourg-based consortium that launched Astra into orbit last December.
Instead of supporting the Common Market directive, Europe`s culture ministers are favoring a 22-country multilateral convention that gives each country the right to prevent the transnational broadcast of any program or commercial that violates its domestic regulations.
It also seeks to preserve the ”cultural integrity” of Europe by requiring a minimum of 50 percent of the programs in transnational broadcasts to be produced in Europe.
”This is a metaphor for the problems Europe is facing as it approaches 1992,” said Tempest. ”The convention represents the status quo, the ancient regime, the power of sovereign states to control what is seen and heard by their populations.”
