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The Age

Australis gets film rights

Author: Ben Potter
Date: 22/11/1994
Words: 605
          Publication: The Age
Section: Business Age
Page: 43
Australis Media has secured Australian rights to the output of three Hollywood studios, raising the pressure on the Telecom and Optus Communications cable TV groups to deal with Australis or buy it out.

Australis, which aims to launch its satellite and microwave pay TV service early next year, said yesterday that it had formed a partnership with Paramount Pictures, Sony Pictures (Columbia TriStar), Universal Pictures/MCA and Australis's United States shareholder, Tele-Communications Inc.

The partnership will be owned in equal shares by the five partners and will have exclusive rights to the output of the three studios for five-and-a-half years with a further five-year option.

It will produce two 24-hour movie channels - a local version ``with an Australian look and feel" of Showtime and a first-run movie channel which rates second to Time Warner's HBO on American cable TV. It will also produce Encore, featuring hits from the 1960s, '70s and '80s.

While the Optus Vision cable consortium is believed to have signed the powerful Disney and Warner Brothers studios, the Paramount-Sony- Universal alliance represents a formidable attraction.

The three studios have produced Raiders of the Lost Ark, Jurassic Park, Schindler's List, The Godfather, Reds, Indecent Proposal, What's Eating Gilbert Grape, Basic Instinct, Philadelphia, Sleepless in Seattle, Chaplin, The Age of Innocence, Last Action Hero, When Harry met Sally, Ghostbusters, Tootsie and Gandhi. Current hits include Forrest Gump and River Wild.

Optus Vision, a partnership of Optus, Continental cable of the US, Kerry Packer's Publishing & Broadcasting and Seven Network, also has access to major local sports such as AFL (channel 7), rugby league and cricket (channel 9), which will be attractive to subscribers.

It plans to offer services from the second half of 1995 on a $3billion aerial cable system that will pass 3.4million homes by 1998.

Telecom has formed a joint venture with Rupert Murdoch's News Corporation, delivering the Twentieth Century Fox film and TV studios, and plans to accelerate the installation of its embryonic cable system to pass four million homes by 1999 at a cost of $3.5billion.

It has little other programming, and Mr Murdoch's attempts to set up a rugby league super league have been thwarted by the Communications Minister, Mr Lee, insisting it will be subject to pay TV anti- siphoning rules. It has informally agreed to allow Australis 15 channels on the cable system.

Mr Packer is believed to be determined to keep Australis off Telecom's cable system, but would have to make a hostile bid for Australis to achieve this. Australis is capitalised at $315million, based on the 84 cents its shares last fetched, but a bid would cost Mr Packer more than $400million.

To lock Australis in, News may be prepared to do a friendly share swap deal to cement their alliance, said an ANZ Capel Court media analyst, Mr Bob Peters. If Australis joined up with one of the cable groups, the other would be in trouble, he added.

The three studios will also get options to buy Australis convertible debentures at $1.40 apiece in the next 27 months to a maximum of 10 per cent of the total debentures on issue (currently 241 million). TCI and its US cable associate Gerry Lenfest will each be allotted 875,000 shares at $1.33 apiece.

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