TCI, Time Warner discuss venture

March 15, 1994|By Bloomberg Business News

NEW YORK -- Tele-Communications Inc. Chief Executive John C. Malone has held discussions with Time Warner Inc. executives about joining an international cable music program to compete with Viacom Inc.'s MTV channel, executives close to the discussions said yesterday.

The discussions could threaten an agreement in principle that TCI reached in September with Germany's Bertelsmann A. G. to launch their own channel competitive with MTV.

Time Warner's Warner Music Group, Sony Corp.'s Sony Music, Thorn EMI PLC's EMI Music unit and PolyGram, majority-owned by Philips Electronics, revealed in January that they were setting up their own international music channel.

A Warner Music executive confirmed that Time Warner has held talks with TCI but added that the company is also considering alliances with other cable companies.

TCI spokesman Bob Thompson insisted that the Bertelsmann agreement is "still alive," but acknowledged that the nation's largest cable system operator "has also taken an interest in the possibility of another channel with a network of other companies."

TCI has not ruled out the possibility of pursuing both ventures, he said.

The companies have not revealed how much they plan to invest in the two projects.

Mr. Malone also talked last week with Sumner M. Redstone, chairman of Viacom Inc., which owns MTV. Mr. Redstone named Mr. Malone in an antitrust suit filed as part of his takeover battle for Paramount Communications Inc.

In an interview last week, Mr. Redstone said he would discuss resolving the lawsuit with Mr. Malone.

Mr. Thompson of Tele-Communications declined to comment on the discussions with Mr. Redstone.

Trish Heimers, a Bertelsmann Music Group spokeswoman, said the music channel venture with TCI is still slated to begin operations by the end of the year.

The venture with Time Warner and Sony, which hasn't been named, is modeled after a cable venture started in December in Germany called Viva that includes the same partners.

The service is offered to more than 90 percent of Germany's cable customers. About 60 percent of the music offered on the channel is German -- unlike MTV, which relies largely on American products.

The new venture would differentiate itself from MTV by offering a broader range of foreign language programming and music.

The venture between TCI and Bertelsmann is slated to allow consumers to purchase items such as CDs and tapes by telephone. Ultimately, the partners hope consumers will be able to order items electronically by clicking remote controls.

MTV reaches about 252 million households in 80 countries. MTV and its sister network, VH-1, posted profit from operations of $272 million in 1993, a 32 percent jump from 1992.

Time Warner, Sony, PolyGram and EMI Music together supply 63 percent of MTV's music videos.

An MTV spokeswoman was not available for comment.

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