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The Age

Foxtel takes more of comedy TV

Author: JANE SCHULZE
Date: 28/07/1998
Words: 591
          Publication: The Age
Section: BUSINESS
Page: 5
The pay TV company Foxtel has increased its ownership of the pay TV channel The Comedy Channel to 80 per cent and renewed its long-term funding commitment.

The Comedy Channel's chief executive, Mr Nick Murray, said a new joint-venture agreement had been signed with Foxtel, jointly owned by Mr Rupert Murdoch's News Ltd and Telstra.

Foxtel gained the 40 per cent of the Comedy Channel previously owned by the now-defunct pay TV operator Australis Media for an undisclosed sum.

Mr Murray said the other 20 per cent shareholder, Artist Services, maintained its ownership but had also renewed its long-term commitment to the channel.

Artist Services is 50 per cent owned by John Fairfax Holdings, the owner of The Age.

"We are the first channel to go through the tough process of restructuring but it's paid off," Mr Murray said.

He said the channel's future had been under threat, with Australis owing it money that it was now unable to recover.

Mr Murray said the original joint-venture agreement had been terminated at the end of last year when Australis breached its funding obligations.

The two-year-old channel continued to operate at a loss, but Mr Murray said he did not expect that to continue beyond three more years.

"They will fund our cash requirements on an ongoing basis, which means that we can keep making lots of Australian programs," he said.

"But we have some very tight controls on costs and program expenses, so it's looking healthy for the future."

Mr Murray said the extent of losses would depend on factors such as the satellite and cable roll-outs, which could result in more subscribers for pay TV.

"Hopefully it won't be more than a five-year break-even period but no one really knows," he said.

"The important thing from our point of view is that it (the restructure) is a vote of confidence from Foxtel and Artist Services that the channel is heading in the right direction."

Mr Murray said advertising revenue was in line with forecasts set during the year, and the channel had had "a healthy start to the new year as well".

He estimated two-thirds of revenue this year would come from subscriptions and the remaining third from advertising, but the channel hoped to make the split even.

"Down the track we would like to have a 50-50 split between advertising and subscriptions but it will take a while to get to that," he said.

"It's part of the growth the industry has to go through as advertising agencies get their heads around pay TV generally."

Mr Murray said the channel's 18- to 35-year-old demographic was attracting advertisers.

"They are coming in with some very solid support, plus the channel has a very good defined identity, the programming is well targeted and fits into a good niche category," he said.

Advertisers that had used The Comedy Channel included the Two Dogs alcoholic lemonade, Toyota, American Express and Hahn Ice.

"Two Dogs hadn't advertised on television before so pay TV is opening up TV as an advertising medium to people who had previously only used outdoor and cinema advertising," Mr Murray said.

The Comedy Channel was screening Australian programs and first-run programs from the United States and the United Kingdom.

It recently signed a three-year deal with the US broadcaster NBC to supply the Tonight Show with Jay Leno and Late Night with Conan O'Brien.

"One of the things that people want to see are programs that are new to Australia that are seen elsewhere in the world," Mr Murray said.

About half the budget was spent on Australian programming produced by Artist Services.

 
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