Pay-Per-View Advances in Australia

Sydney, Australia-The pay-per-view market looks set to broaden in Australia as the summer Olympic Games, to be held here in September, provide a boost to pay TV operators that want to offer special-event programming on a PPV basis.

Seven Network, which holds the Australian broadcast-TV rights to the games, recently announced that its pay TV arm, C7, would provide two channels of Olympic sports to subscribers on a PPV basis.

Also, direct-to-home and cable operator Austar United Communications Ltd. said it was negotiating directly with seven Hollywood studios to establish its own PPV-movie service.

Both new services are outside of an existing PPV joint venture, Main Event Television Pty Ltd., which is owned by the country's three pay TV operators-Foxtel, Optus Television and Austar.

Main Event supplies an adult-PPV channel, Adults Only, and a PPV special-events channel, Main Event, to all three platforms.

Bruce Mann, managing director of Austar Entertainment, said he was optimistic about reaching an agreement with the studios, although some details need to be worked out.

The movie service would air recent-release movies, "somewhere between video releases and the existing movie-channel offerings," he said, adding that the price per movie would vary depending on the title, but it would generally be less than that for a video rental.

"While we anticipate pay-per-view as a great opportunity for us to get incremental revenue margins out of our customers' homes without it cannibalizing our other businesses, we are not at a point where we're ready to execute the agreements on our table right now," Mann said.

He added that the studios were in favor of a model that would ensure them at least a minimum return for the movies.

"What we're really trying to get the studios to embrace is a pure revenue-sharing model where we're able to go out there and drive incremental revenues and reward them, and reward ourselves," he said. "So we're negotiating with them all and we're operating in good faith, but the model that's typical throughout the industry is not something we're prepared to step up to at this time."

Meanwhile, Seven will provide 750 hours of Olympics coverage on two PPV channels to Optus' and Austar's 630,000-plus pay TV subscribers. The two channels will focus on long-form programming, providing complete coverage of individual events and sports.