Home Shopping and TCI plan TV venture abroad

December 22, 1993|By Bloomberg Business News

ST. PETERSBURG, Fla. -- Home Shopping Network Inc. and Tele-Communications Inc. said yesterday that they would form a joint venture to market cable-television programs abroad.

The venture, to be called Home Shopping Network International, will be Home Shopping's first foray outside the United States, where its shop-at-home programs have been highly successful.

"We are convinced that there is enormous opportunity to develop TV retailing beyond the U.S.," said Gerald Hogan, Home Shopping's president and chief executive.

The companies were short on details, declining to say where they intend to market the programs or when they expect to begin.

Annie Erner, an analyst with UBS Securities, said she had been told by Home Shopping executives that the venture would focus on Europe, Asia and South America.

The venture will combine the TV programming of St. Petersburg, Fla.-based Home Shopping and the cable operations of Englewood, Colo.-based TCI, both of which bear the stamp of John Malone. Mr. Malone is president and chief executive of TCI, the nation's biggest cable-systems operator, with 10 million subscribers and revenue of $3.6 billion last year. He also controls Liberty Media Corp., the third-biggest cable operator, which controls Home Shopping.

Home Shopping, which, with revenue of $1.1 billion last year, is the biggest U.S. cable-TV retailer, reaches 60 million viewers. In venturing overseas, it will be competing with QVC Network Inc., which got a head start by initiating programs in Mexico and Britain last year.

"This joint venture definitely makes sense," Ms. Erner said. "It will be very beneficial to both of them."

Other analysts expressed caution.

"We in the U.S. have a different mentality and culture than do Europeans and Asians," said Kurt Barnard, a retailing consultant. "We're used to commercial television, and to buying things from TV. This commercialism isn't an everyday occurrence elsewhere, and most Europeans and Asians move more phlegmatically than we're accustomed to moving here in the U.S."

Salvatore Muoio, an analyst with Gabelli & Co., predicted that it will take at least five years for the venture to yield significant revenue.

Home Shopping rose 12.5 cents a share yesterday, to close at $15. TCI shares fell 37.5 cents, to close at $29.50.

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