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Luxembourg (pte018/21.02.2005/11:45) - RTL Group http://www.rtlgroup.com , Europe's largest TV company, is set to launch pay-TV channels in select European countries, a fundamental shift that comes as the broadcaster faces a rapidly changing television landscape across the region. As the Wall Street Journal (WSJ) http://www.wsj.com reports, using a mix of subsidies and political pressure, a number of European countries including Germany, Italy the UK and France, have been prodding broadcasters and viewers to switch from analogue systems to digital television. According to analysts, the results will be a fragmented television market. In order to avoid losing viewers in a more splintered market, the Luxembourg-based RTL Group wants to supplement its free TV offerings with pay channels. The success of the plan is crucial to the future Bertelsmann, who owns the company. RTL group generates more than 40 per cent of Bertelsmann's profit and is its biggest division.
"We're open to pay TV. But that doesn't mean we're going to introduce it everywhere. It has to make sense as part of digitalization," RTL Group chief executive Gerhard Zeiler said in an Interview with the German business daily Handelsblatt. "Every business isn't going to be able to survive on advert revenue. That's why we're going to establish channels that viewers will have to pay for," he added. According to Zeiler, pay-TV offers the best possibility to create a stable of channels in major European markets such as France and Spain. However, the company would not follow and one-size-fits-all approach, he said. RTL Group operates a network of 31 television channels spanning 10 European countries.
In the 1990s, Bertelsmann lost million on its investment in Premiere, a German pay-TV outlet. Bertelsmann sold out of Premiere, which has since recovered and is scheduled to go public next month. RTL Group is also a partner in TPS, a French pay-TV service that is unprofitable. Premiere http://www.premiere.de plans to enter the stock market on March 9 in Frankfurt.
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