The controversial Nordic Satellite Distribution consortium is in danger of collapsing because of a row between two of its three big shareholders.
The row, between Swedish programmer Kinnevik and Norwegian telephone company Telenor, threatens the chances of the consortium coming up with a restructuring that will win acceptance from European Commission competition officials.
NSD has been trying to turn the 1 degree West orbital position – home to the Thor and TV Sat-2 satellites – into Scandinavia’s “hot bird” position. But Kinnevik also plans to take a substantial slice of capacity on the Swedish Space Corporation’s planned digital satellite Sirius-2, at 5 degrees East. Telenor is furious.
It is demanding that Kinnevik drop the plan and also give up its existing transponders at the 5 degrees East position, on the Tele-X and Sirius-1 satellites. Kinnevik already plans to give up its Astra transponders, to the relief of Telenor.
Kinnevik is buying capacity on the rival system simply as a way of hedging its bets. Sirius-2, with 16 transponders offering a mix of digital and analogue channels for the Scandinavian market, could become a powerful satellite and Kinnevik is worried that a strong rival service might be developed on it. The company is thought to be negotiating for six of the 16 transponders (another 16 transponders are aimed at the rest of Europe).
Per Bendix, chairman of the NSD, said that the group could continue without Kinnevik, although it would be difficult to find another company with such large pockets.
He downplayed the rows between the shareholders: “Of course, there are tensions between Kinnevik and Telenor. You can’t imagine a process like this, a complicated business deal, without some frictions which create some warmth. None of the partners can stop this initiative, it has gained too much momentum.”
TeleDanmark, the third member of NSD, has tried to play a mediating role between Telenor and Kinnevik.
One source close to the consortium said: “Kinnevik is definitely interested in investigating other satellite operators for the digital future. The company is known for doing exactly as it pleases, which clashes with Telenor which is trying to get 1 degree West into shape.”
Kinnevik and Telenor have clashed repeatedly over Kinnevik’s refusal to give up the 5 degrees East position, where it transmits five channels on Sirius. The issue has been exacerbated for Telenor by the fact that the mostly unencrypted Sirius/Tele-X package has achieved a better penetration than the encrypted Thor package.
The two companies have also been at loggerheads over the restructuring of the consortium, forced upon it by the European Commission.
Last July, competition commissioner Karel Van Miert ruled that NSD, which was planned as a vertically-integrated company providing programming, subscriber management and satellite capacity, was anti-competitive.
He ruled that NSD would “create or strengthen a permanent dominant position as a result of which effective competition would be significantly impeded” in the Nordic market for satellite broadcasting. It would dominate the provision of satellite transponders in Scandinavia, cable television in Denmark and direct-to-home pay-television distribution.
Bendix, with the backing of Telenor, has been trying to broaden the shareholder base by bringing in other Scandinavian programmers. But Kinnevik opposes the move because it does not think that it will meet Brussels’ concerns. It also does not want to play second fiddle to other programmers.
The shareholders have looked at other options, including one of splitting NSD into separate companies covering transponder-leasing, subscriber management and programming. The companies could have different ownership. Pele Tornberg, Kinnevik’s deputy managing director, would not say what alternative plan Kinnevik is proposing.
NSD has until next month to present Brussels with a revised shareholding structure.
Helsinki Media, the Finnish broadcaster, has rejected an approach to rejoin NSD, which it left in 1994 in a row over Kinnevik’s influence. President Tabio Kallioja said that the company maintained its view that NSD gave Kinnevik a stranglehold on the allocation of satellite capacity to other programmers. He added that Helsinki Media was interested in the plans for digital satellite television being developed by NetHold and by Telia Media, owned by the Swedish PTT, Telia.
As a reporter for two Financial Times newsletters, New Media Markets and Screen Finance, I covered the rapidly growing UK (and Scandinavian) television and new media markets and the expanding film-financing sector in Europe.
From Special Report: NMM (New Media Markets) Spotlight On The Emergence Of Satellite Porn Channels In The UK
The aspect of satellite and cable programming most feared by the British government when it pushed the development of new media in the mid-80s looks set to become firmly entrenched as a part of the emerging television era.
Next Wednesday, the USA’s most famous soft-pornography channel will arrive in the UK, almost certainly heralding a satellite porn war for the eyes of the British public.
The Home Office, which used to look after televsion, was worried that porn would be one shock too many for the British and would create havoc with British television laws. But the mores of the marketplace have changed the climate, although the Broadcasting Act and the Independent Television Commission (ITC) still create limits that are stricter than in most other countries.
Hard-core pornography – such as that shown on several continental channels which can be picked up in the UK – remains out of bounds, as evidenced by the Department of National Heritage’s recent proscription of the hard-core TV Erotica.
But the drawing of the line between hard-porn and soft-porn changes over time: the programming now permitted by the ITC is a lot stronger than many might have thought likely a few years ago. The porn channels have learned how to push the boundaries of acceptability and, with competition increasing, are likely to push their luck even further.
Politicians, journalists and old-fashioned new-media programmers – for instance, the United Artists people who were dismayed at the decision of parent company TeleCommunications Inc to bring Playboy over to the UK – may believe that porn channels serve only to cheapen the quality of life.
But the supply side of the marketplace detects that there is a widespread demand for porn and (ironically) religion and so programmers will follow the demand by supplying suitable programming.
The soi-dissant “adult” channels estimate their potential audience at between 7 per cent and 30 per cent of cable and satellite homes – between 400,000 and 1.7 million homes at present penetration levels.
Their main target market is the consumer of “top shelf” magazines which range from the glossy, even glamorous Playboy to the more downmarket magazines of the “reader’s wives” variety. According to the Campaign Against Pornography, the top six pornographic magazine titles sell about 2.5 million copies a month. Altogether, there are about 200 pornographic titles on sale in the UK.
Deric Botham, programmer at the recently-launched Television X – The Fantasy Channel and a porn-industry veteran, estimates that the total UK sex industry – from videos and magazines to sex aids, but excluding prostitution – generates revenues of £4 billion a year, a figure which is difficult to substantiate but is equivalent to 10 times the investment in the UK film industry in 1994.
According to Botham, “our research shows that people want this thing and the majority of people want it to some degree.”
The porn channels are finding it relatively easy to find satellite capacity, largely because they are forced by the rules to operate at a time of day (i.e. night) when most channels have quit their transponders and are only too happy to find someone to sub-lease them to.
The first of the new porn channels will be the Playboy Channel, which likes to think of itself as being a cut above the others. The others, it claims, are for “sad, lonely men”. Playboy, on the other hand, is for “happy, heterosexual couples”.
The channel, probably the softest of the genre, will be launched on November 1 by Flextech, BSkyB and the US Playboy Channel.
It will be followed by the not-so-soft Penthouse which is being launched in the UK by a joint venture of Penthouse magazine owners General Media and Graff Pay-Per-View, which already owns the UK Adult Channel.
Two other channels have received licences from the ITC – David (Sunday Sportnewspaper) Sullivan’s Babylon Blue and the Adam and Eve Channel. With the Adult Channel and Television X already broadcasting, there could be six porn channels on offer to UK viewers.
But two other channels are beamed into the UK for those willing to pay the cost of extra reception equipment: the continental pirates, Rendezvous and Eurotica. There is also the now-banned TV Erotica.
Cable and satellite was bound to be an attractive medium for the porn channels, given the possibility of encrypting the signal and imposing a subscription fee and, as a consequence, benefiting from the lighter regulation that has seemed likely. Sex-channel executives say that the ITC has become increasingly flexible in what it will allow.
Three other factors have fuelled would-be channels to turn to cable and satellite:
The replacement of the independent high-street video store by big video superstores has robbed the porn industry of a key outlet. New-media distribution should bring in consumers who are embarassed to hire a porn video from a shop. Yet buying a subscription to a porn channel may be a more embarassing act within the family environment.
The Adult Channel is regarded as demonstrating that there is an audience for porn in the UK: it is thought to have about 224,000 subscribers.
Cable and satellite has far more potential for the porn industry than the traditional-format channel. The prize, which will make everything worthwhile, is pay-per-view (ppv). Bill Furrelle, Playboy Channel’s sales director, said that he had been asked by several UK cable operators about providing a ppv service next year. The operators want Playboy, the Adult Channel and Adam and Eve to contribute to the Home Cinema ppv service which they hope to put together.
Susan Sontag, the renowned American essayist, described pornography as a “crutch for the pyschologically deformed and brutalisation of the morally innocent.” The Campaign Against Pornography in the UK believes that pornography exploits women and children “in a degrading and humiliating way, often with the message that we enjoy this and want to be abused.”
The campaign encourages its supporters to take direct action against any distributor of pornographic material as part of its wider campaign to put the industry out of business.
The porn channels dismiss arguments that they degrade women and encourage male violence against women. Playboy managing director Rita Lewis argues that “women are happy to consume erotic imagery like pin-ups. Women are not hung-up by this anymore, they are not threatened by the fantasy women we show in our programming. We hope Playboy will lead to couples’ making love together.”
Andrew Wren, financial director of the Adult Channel, also dismisses the link between pornographic programming and sexual violence. “I don’t think there is anything in programmes that would encourage men to go and rape. Women are interested in sex as men are.”
Television X’s (Deric) Botham says that porn programmes are “a bit of titilation” in the fine, upstanding tradition of the British Carry On films. None the less, he admits that “I wouldn’t want my daughter to get involved in pornography.”
He says that the women involved in the programmes, some of them housewives, are willing participants and enjoy the opportunity. “I don’t produce anything that is against the law. We speak to the individuals concerned. If you have a reluctant model, it doesn’t work – I just won’t buy the video.”
The Campaign Against Pornography sees it all rather differently. Ann Mayne, a member of the campaign’s management committee, was particularly critical of two programmes on Television X – Shag Nasty and Mutley and Fly on the Wall.
She said that Shag Nasty and Mutley, in which a presenter approaches women in the street or in supermarkets and offers them £25 to look at their knickers, or £50 to be filmed having sex with him, gave the message that women were simply objects and that it was acceptable to harass them.
“It is complete prostitution of female sexuality,” she said. “Botham wants full-on, across-the-board prostitution of women. In his view, every woman must have a price.”
Mayne said that Fly on the Wall, in which real-life couples are shown having sex, was an open invitation for men to coerce their partners into being filmed, possibly to the point of abuse.
UK laws on satellite porn among toughest in Europe
UK regulations on what can be shown on sex channels are tougher than in most countries of the European Union. Channels such as the hard-core Swedish TV Erotica and the recently-launched French Rendezvous are licensed in their respective countries and transmit explicit scenes of sexual intercourse, straight and gay, featuring close-up shots of copulating genitals.
Graff Pay-Per-View, the experienced US sex channel operator, consciously decided to exclude the UK as a market for its hard-core Eurotica channel which is licensed in Denmark and, like the other hard-core channels, transmits via a Eutelsat satellite. But pirate smart cards for the channel, as for the other channels, are available in the UK in specialist satellite shops.
Graff’s seeming respect for the UK regulations may not be unconnected with the fact that it owns the Adult Channel and would be wary of upsetting the ITC. Broadcasting unacceptable material into the UK could provoke the ITC into seeing Graff as a body unfit to hold a licence, thereby threatening the Adult Channel.
The ITC’s guidelines on sexually explicit material state that representations of sexual intercourse can be shown only after 9pm and that “the portrayal of sexual behaviour, and of nudity, needs to be defensible in context and presented with tact and discretion.”
There has been some relaxation of the rule. The ITC will, on an experimental basis, allow the watershed to be broken by a ppv or video-on-demand service. It is not, however, prepared to give this freedom to a porn channel, at least not in the early days, because it does not want to be seen to be licensing pornography. The relaxation will affect only general services.
The ITC will also monitor any ppv service to ensure that there are no cases of children accessing the programming before deciding if the programme code should be revised.
The transmission pf 18-rated films on terrestrial or new-media channels is not permitted before 10pm. Films with a 15-rating are not allowed before 9pm on terrestrial channels such as BSkyB’s Sky Movies or the Movie Channel. These are minimum requirements. Some 15-rated films, for instance those which show scenes of sexual intercourse or drug-taking, would not be deemed suitable for transmission even on an encrypted channel at 8pm.
In practice, the ITC does not permit depictions of erect penises, anal intercourse, close-ups of genitalia or ejaculation.
Where channels have overstepped the mark and gone abroad to get licences from less strict authorities – the late Red Hot Dutch and TV Erotica – the ITC has recommended that the channels be proscribed, action which has subsequently been taken by the Department of National Heritage. The ITC is now monitoring the Rendezvous channel, which shows a mix of gay and heterosexual hard-core pornography with graphic scenes of sexual intercourse.
The DNH issues proscription orders under Sections 177 and 178 of the Broadcasting Act. The orders make it a criminal offence to supply equipment to receive the channels or to market and advertise them.
The European Union directive on transfrontier broadcasting lays down that one country cannot prevent the reception of channels licensed by other European Union countries. However, it allows individual governments to take action against any broadcast which could damage the physical, mental or moral development of minors.
The Playboy Channel, due to launch in the UK on November 1, is trying to position itself as being a cut above the existing sex channels with which it will compete for subscribers.
The channel, which is running an advertising campaign costing more than £1.5 million, believes that its big budgets and slick production values will attract viewers who have hitherto been uninterested in so-called “adult” entertainment. It hopes to win an audience among women as well as men.
Managing director Rita Lewis dismisses the other sex channels as being aimed at people who are “a bit sad and on their own”. The channels promote “deviant” behaviour.
Playboy hopes to attract happy, heterosexual couples who will treat the channel as an aid to foreplay: “We hope Playboy will lead to couples’ making love,” said Lewis, who believes that women, as well as men “are happy to consume erotic imagery like pin-ups.”
In the USA, according to Lewis, 70 per cent of the audience for the channel comprises couples.
She said that the UK Playboy will run programmes that have more in common with programmes like Channel Four’s The Good Sex Guide. “These days, a whole bunch of people are sampling erotic programming like The Good Sex Guide. It is very sexy programming with mass-market appeal.”
Playboy’s movies would have a high standard of production, she said, very different from what she claims to be the cheap programming made for the other channels, often home videos and often shot with hand-held cameras.
Playboy’s programming will comprise sex films, interviews with “centrefold” models, documentaries on the sex industry and general-entertainment programming such as quiz shows.
The rival channels claim that Playboy will not be a big threat to them. The Adult Channel’s Wren says that all the new channels “hype the market, which helps us.” In any case, adult entertainment consumers have already been weaned on harder mix of programming and do not want something that offers little more than what Channel Four shows.
The UK Playboy Channel, which is owned by UK programmer Flextech (51 per cent), British Sky Broadcasting (30 per cent) and Playboy Enterprises (19 per cent), will transmit from between midnight and 4am on the Bravo transponder on Astra 1c.
New Media Markets and Screen Finance were published by the Financial Times in the 1990s.
I worked as a journalist for magazines and newspapers from 1991 to 1997 in Canada and the United Kingdom and as a radio host for a weekly spoken word interview programme, Word of Mouth (CKLN-FM).
This included working as an investigative journalist for Now Magazine, “Toronto’s alternative news and entertainment source”, as a Medical and Health Correspondent for Today’s Seniors, and as an investigative journalist and reporter for two Financial Times newsletters, New Media Markets and Screen Finance.
Could it be possible to do high-quality investigative journalism in the context of a shrinking economy undergoing austerity, and where the media sector is contracting and consolidating around a small number of media companies? Is it possible to launch new media products in the face of a contracting economy and reach new audiences and create new markets?
In Canada, the early to mid 1990s were the years of government austerity and economic crisis. After the crash of 1989/1990*, institutions came under great stress. Health care, for example, was pitched into a period of turmoil and change. Drawing on my experience working in the health sector (Princess Margaret Hospital/Ontario Cancer Institute), I covered this crisis in many stories for various publications, in particular Today’s Seniors.
The Canadian economy severely contracted and unemployment was at 11.4 per cent by 1993 (Statistics Canada), and as Statistics Canada says, “Because employment recovered at a snail’s pace after the recession of the early 1990s, the decline in the unemployment rate was delayed until 1994”.
The media in general could not avoid the wider economic crisis. According to the book The Missing News: Filters and Blind Spots in Canada’s Press (Robert A. Hackett and Richard S. Garneau, Canadian Centre for Policy Alternatives, University of Toronto Press 2000), Canada’s media was also in a crisis throughout the 1990s, as declining resources, staff layoffs and media closures reduced the breadth and depth of news coverage. Canadian media as a whole also has a “great dependence on advertising, which accounts for more than 70% of daily newspaper revenues, about 64% of magazine revenues,” which means there is enormous pressure to only publish stories that do not upset advertisers. And monopolies exert great control over news content in Canada: “In the United States, ten companies control 43.7% of total daily newspaper circulation. By contrast, in Canada since 1996, one single company controls a comparable share of the media pie.”
The impact of this crisis was summed up by Jeffrey Simpson in the book The Missing News, where he said newspapers are “shrinking in size, personnel, ambition and, as a consequence, in their curiosity,” …. “I believe the result has been a diminution in quality.” (p64)
This is the context in which, ironically, it was possible to flourish as a much-sought-after investigative journalist who could get the story and get the quotes and as an editor. And it was also a time for opportunity, in particular as new media rose in importance, from cable and satellite television, to the rise of the Internet.
I broke original stories for Now Magazine as a member of their investigative reporting team, for Today’s Seniors as its Medical and Health Correspondent, and as a reporter for two Financial Times newsletters in London, UK. I also broke original stories as a freelancer for many other magazines and newspapers, including Hospital News, The Toronto Star, This Magazine, The Annex Gleaner, Flare, The Financial Post Magazine, Canadian Living, and others. I drew on strong contacts in health care, media, politics, international relations and the military.
I was an editor for magazines, newspapers and newsletters as well, gaining invaluable experience and contacts. This included as Editor-in-Chief for start-up youth publication, Watch Magazine (see Case Study 2), and as Features Editor for Id Magazine (see Case Study 3).
Themes covered included the uses – and abuses – of data, the impact of military engagements to uphold international law, how to re-structure health care when budgets are tight, with populations ageing, and technology and scientific advances quickly expanding options, the emerging new media world of cable and satellite television and the Internet, the sexual revolution 2.0, urbanization and how it re-shapes politics and community, international development, and youth culture.
Story highlights include covering data concerns over Canada’s border screening measures, questions about the air quality of aircraft cabins, the debate over airstrikes in Bosnia, scandals involving peacekeepers in Somalia and reporting on the UN peacekeeping mission in Haiti, reforms to medical education in Canada, innovators in health care, the tug of war over health care spending during austerity measures, London, UK designers, the growing role of Nordic countries in cable and satellite television, the film financing scene in Europe and the UK, the new sexual revolution and its impact on cable and satellite television and the rising Internet, changes to Canada’s media industry, and Toronto’s embracing of the megacity concept and the political battles it sparked.
I edited newsletters and newspapers aimed at specific communities, from Canada’s medical history community to part-time students. And had the privilege of helming a start-up youth magazine as its Editor-in-Chief to its commercial success (see Case Study 2).
* “The last two recessions in Canada occurred in 1982 and 1990. … The most recent Canadian recession began in the second quarter of 1990 and over the next 12 months GDP fell by 3.2%. … The recovery from this recession was unusually slow; there was almost no growth between mid-1991 and mid-1992. This slow recovery was export driven.” (The Canadian Encyclopedia)
“In early 1994, Canada’s economic situation was not that favourable—our economy was facing some rather serious problems.
“… the recession here was more severe than in the United States.
“Working their way out of these difficulties was disruptive and painful for Canadian businesses. Defaults, restructurings, and downsizings became the order of the day. With all this, unemployment took a long time to recover from the 1990–91 recession and, in many instances, wages and salaries were frozen or reduced (Bank of Canada: Canada’s Economic Future: What Have We Learned from the 1990s?)
A small sample of published stories with links is below:
1991: Begin career as investigative journalist and editor.
1992: Work as a Medical and Health Reporter for Today’s Seniors and as an Investigative Journalist for Now Magazine. Work as Editor and Writer for the Hannah Institute for the History of Medicine’s newsletter.
1993: Published in many publications, including The Toronto Star, Canadian Living and This Magazine.
1994: Work on re-launch of Watch Magazine 2.0 and its expansion (see Case Study 2).
1995: Work as reporter for two Financial Times newsletters in London, UK.
1996: Work on re-launch of Watch Magazine 3.0 and its expansion. Begin work at Id Magazine as its Features Editor (see Case Study 3).
1997: Begin two-year assignment with the United Nations mission in Mongolia (see Case Study 4).
“David South … proved himself to be a penetrating, thorough and hard-working journalist. He produced a lot of very good stories …” Neil McCartney, Editor, Screen Finance, Telecom Markets and Mobile Communications, London, UK
The Swedish government is set to clamp down on satellite channels which carry advertising aimed at children and will tell channels to drop such advertising or face legal action.
The centre-left government’s threat of tough action follows Sweden’s winning extra powers last week through an amendment to the European directive on transfrontier broadcasting agreed by European culture ministers (NMM 13:42).
The main focus of the Swedish government’s wrath is the TV3 channel, owned by Kinnevik, which uplinks to the Astra 1a and Sirius satellites from the UK. TV3 based itself in the UK in order to benefit from the Independent Television Commission’s more liberal rules on advertising.
TV3’s main commercial television rival, TV4, has long protested to the government about what it sees as unfair competition from TV3 and other foreign-based channels.
The government will initially go after TV3 and the Luxembourg-based cable and satellite channel Femmen. The Ministry of Cultural Affairs said that pro-European satellite channels such as TNT/Cartoon Network and the Children’s Channel were lesser priorities, but could face action in the future.
TNT/Cartoon Network has a Swedish soundtrack and many Children’s Channel programmes are subtitled in Swedish on cable systems.
The Ministry of Cultural Affairs plans a two-pronged attack to remove the advertising it finds offensive and which is banned under Swedish broadcasting law: advertising aimed at children under 12 and carried in breaks around children’s programming.
First, the consumer-protection agency the Konsument Ombudsmanen will take action against advertising agencies which produce children’s advertising. Monica Bengtsson, a legal adviser to the Ministry of Culture, said that agencies will be warned once and then fined if they violate the rules a second time.
If this fails – and some observers believe that it will, because advertisers could move their accounts to non-Swedish agencies – the Ombudsmanen would then try the riskier move of taking channels to court to stop the ads.
The Ombudsmanen is not expected to act until it hears the results of the case it has already taken to the European Court of Justice against Italian children’s magazine publishers De Agostini for allegedly placing commercials targetting children under the age of 12 on both TV4 and TV3. Judgement is expected in mid-1996.
The Swedish government is also banking on public opinion to help pressure satellite channels to stop showing children’s advertising. The political climate in Sweden is strongly in favour of strict controls on advertising aimed at children. Swedish prime minister, Ingvar Carlsson, made cracking down on such advertising a key part of his opening speech to the present session of the Swedish parliament.
The amended directive (which still needs the approval of the European Parliament) allows a member state to ban children’s advertisements under its own rules even if the channel satisfies the rules of the country from which it is broadcast.
The Swedish government believes that the combination of the amended directive provisions and its ban on children’s advertising is all it needs to prevent the adverts.
Per Bystedt, vice-president of TV3, insisted this week that the channel is UK-licensed and therefore does not fall under Swedish law: “We are following the Independent Television Commission’s rules.”
New definitions on which countries are responsible for regulating channels, adopted by the European culture ministers last week, could lead to TV3 being regulated in Sweden rather than the more liberal UK if it is deemed that the channel is really established there. However, the Swedish government has investigated the extent to which TV3 is based in the UK and, according to Bystedt, has declared that it is satisfied that the company is British.