ANGA COM 2013: Liberty stays in acquisition mood

Jörn Krieger | 05-06-2013

US media company Liberty Global is interested in further acquisitions in the German cable market following its takeover of Unitymedia and Kabel BW. "We would love to be bigger one day," Michael T Fries, president and CEO of Liberty Global, said at the opening discussion round at the German cable, satellite and broadband trade fair ANGA COM 2013 in Cologne.

Fries criticised the fact that there was no national platform in the German cable market in contrast to other countries. It doesn't make sense that the cable industry has been forced into fragmentation, he said. A national cable platform would, in Fries' view, be advantageous for both content providers and viewers.
The consolidation favoured by Fries would be possible if Liberty Global took over market leader Kabel Deutschland and then be able to cover all, instead of just three, federal states – but it's uncertain whether the antitrust authority Bundeskartellamt would approve such a move. Vodafone is also said to be interested in buying Kabel Deutschland.
Adrian von Hammerstein, CEO of Kabel Deutschland, is flattered by the courtship as it shows "how attractive" the company is, but he declined to comment on the industry rumours.
No rapprochement was reached in the dispute regarding cable carriage fees which has been lingering for months. Despite having lost all five court trials which it has lodged against public broadcasters ARD and ZDF so far, Kabel Deutschland wants to continue fighting "through all instances", affirmed von Hammerstein. The company is convinced it's in the right in its view that the compulsory carriage of the public broadcasters induces a payment obligation: "Must carry means must pay," he said.
Karola Wille, director general of ARD's affiliate broadcaster MDR, believes it's regrettable that both sides are fighting in court instead of jointly tackling important issues such as the digitalisation of the cable networks. ZDF's technical director, Andreas Bereczky, added that he couldn't understand the whole uproar as ARD and ZDF had already announced in 2008 that they would discontinue paying carriage fees from 2013.
Dietmar Schickel, managing director of cable operator Tele Columbus, hopes that Kabel Deutschland will win the legal proceedings as this would enable smaller cable companies to ask for carriage fees from ARD and ZDF as well. In two court cases, Tele Columbus is currently trying to make it so that the public broadcasters have to pay the smaller network operators.
Conrad Albert, chairman of legal, distribution & regulatory affairs at commercial TV group ProSiebenSat.1, confirmed that the commercial broadcasters pay carriage fees. If the public broadcasters were distributed free of charge, this would discriminatory against the commercial channels, he said. In other words, if ARD and ZDF succeed in their non-payment, it is likely that the commercial broadcasters will ask to be treated equally. This explains the cable operators' vehemence to push through their legal position.
The long battle might, however, not be necessary if an out-of-court settlement can be reached. Von Hammerstein and Wille confirmed that they are continuing to hold talks regarding a mutual agreement. The catch-up TV services operated by ARD and ZDF could thereby play a role, as von Hammerstein hinted. Kabel Deutschland would be very keen on developing an attractive video-on-demand proposition on its cable network while ARD and ZDF could save streaming costs by integrating their catch-up services into Kabel Deutschland's offering, he said. Perhaps this could be a solution: the broadcasters will in future not pay for carriage, but only for services which are not part of their public service commitment.