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To: Maya who wrote (26639)	12/14/1997 10:27:00 AM
From: John Rieman	Respond to of 50808

Malone's big order.............................................. multichannel.com TCI, OTHER MSOs TO BUY UP TO 25M SET-TOPS By LESLIE ELLIS Anaheim, Calif. - Saying that he'll become an anchor tenant to attract huge consumer-electronics and communications service providers to broadband, Tele-Communications Inc. chairman and CEO John Malone last week confirmed his plan for his company and others to buy up to 25 million set-tops based on the OpenCable platform. Speaking at an OpenCable press briefing last week, and during a luncheon keynote address at the Western Show here, Malone was uncommonly forthcoming about a triad of potentially big partners - long-distance companies, computer firms and banks - that will further the "broadband is real" validation that has goosed cable stocks over the past three months. Describing a request for quotations for digital set-tops that TCI sent out to vendors two weeks ago, Malone said, "A universal deployment will be of huge economic value" to TCI and to affiliates of TCI's Headend in the Sky. That's partly because the huge order will likely attract large companies that are capable of stamping out set-tops at sub-$300 prices. Plus, he said, a multimillion-set-top environment will convince content providers that large numbers of subscribers will be available to view and use their applications. Requesting millions of boxes should also attract various consumer-electronics makers to the game, capable of cranking out the computerlike boxes in short order. And advertisers interested in interactive applications might be willing to put down money upfront to help subsidize the order by securing a prominent role in the platform, Malone said. "That's the thought process that we've been going through, with the RFP [request for proposals]. We said [to the vendors], `Think of 5 million to 10 million, perhaps going to 25 million.' It all depends on price," Malone said during a luncheon interview at the Western Show last Thursday. The boxes will be supplied "over a three- to four-year delivery schedule," he said. The earliest that the newly designed boxes that Malone envisions could be available would likely be early 1999, he said. Specific vendor responses to the RFP are due Dec. 15. "In our spec, we went for it," Malone said. "We tried to jump to the end point in OpenCable." This means that the TCI OpenCable box will include a standards-compliant cable modem, "a lot of processing firepower" and "fire-wire" hooks to link OpenCable boxes to both TVs and personal computers. The box also could facilitate applications like video telephony at some point, he said. Malone said last Thursday that once TCI evaluates the vendor responses next week, company executives "intend to actually sit down and negotiate a purchase order for one or two of the most attractive proposals." As for timing, he would only say that the purchase contract will happen "sooner, rather than later." Other TCI executives have said that the deals will be announced within a month. Ed Breen, acting CEO of NextLevel Systems Inc. - traditionally a key supplier to TCI, having already shipped 500,000 first-generation set-tops to the MSO - is using its advanced DCT- 5000 set-top as part of its TCI proposal. Malone also indicated interest in Scientific-Atlanta Inc. S-A has been readying its Explorer line of set-tops based on Time Warner Cable's "Pegasus" platform, which already supports Internet protocol applications. "We will undoubtedly be deploying some of the S-A boxes in at least one of our markets," Malone said after the luncheon. "Primarily, the reason for that is to develop the system-integration skills that will be needed for the subsequent deployment when we finally get what we want." Pegasus boxes don't meet all of the technical requirements, he said, but they fulfill some of what TCI wants and they will be available by midyear. TCI expects to run out of its current supply of digital boxes by March, he said. Malone described OpenCable as a "concept" that begins with a ubiquitous digital set-top that provides for "a non proprietary evolution embodied in a set of flexible specifications. "This should encourage outside vendors, telcos and advertisers to come in and anticipate a large-scale customer base," Malone said. Other MSOs that attended an OpenCable press briefing last week praised the move toward interoperable, affordable boxes. As a representative of smaller operators, this is extremely expensive. These boxes are costly. It's a terrible expense for us," said Joe Gans, chairman of the board of Cable TV Co., a small operator based in Hazleton, Pa. "There's strength through unity here," said Ted Rogers, president and CEO of Rogers Cablesystems Ltd. But others called a huge purchase contract based on a specification that doesn't yet exist "fundamentally twisted." "There's something else going on here," said one MSO engineer of Malone's announcement, speaking on condition of anonymity. "Who's paying for these? Who's subsidizing?" Kent Gibbons contributed to this story.

To: Maya who wrote (26639)	12/14/1997 10:39:00 AM
From: CPAMarty	Read Replies (4) \| Respond to of 50808

News Corp.'s Satellite TV Venture Makes Strong Inroads in China interactive.wsj.com By FARA WARNER Staff Reporter of THE WALL STREET JOURNAL HONG KONG -- Rupert Murdoch's News Corp. is back in favor in China, quietly insinuating itself into the nation's growing television industry. The company's relationship to Beijing grew chilly in 1993, after Mr. Murdoch, its chairman and chief executive, proclaimed that satellite television would undermine totalitarian regimes. But now a satellite-TV venture called Phoenix, partly owned by News Corp., is making gains in China -- where it's downplaying its links to Mr. Murdoch. Phoenix has put News Corp. "in a position in China that any international broadcaster would love," says John Wong of Boston Consulting Group International Ltd., who advises media companies in China. To get back in China's good graces, News Corp. had to change its rhetoric and adopt an uncharacteristically low profile. "There's no use bullying your way into a deal, and that's taken us a long time to figure out," says Gary Davey, chief executive of News Corp.'s Hong Kong-based Star TV unit. As concern mounts about Asia's stability and the wisdom of building businesses there, News Corp.'s low-profile, long-haul approach to China provides an intriguing model. The centerpiece of its strategy is Phoenix, a 24-hour satellite-TV channel aimed at China that is 45%-owned by Star. News Corp. had first tried to set up ventures with China's national broadcaster, China Central Television. But when that approach failed, Star teamed up with Today's Asia Ltd., a media company with ties to mainland China, which took a 45% stake, and China Wise International Ltd., an international sales and advertising agent for China's TV stations, which got the other 10%. News Corp.'s timing was superb. Phoenix started broadcasting from Hong Kong in March 1996, at the same time that China's television industry was growing rapidly, with hundreds of cable networks popping up starved for programming. As the demand rose, the cable operators started plucking channels like Phoenix from the sky, making Phoenix an increasingly desirable ad vehicle. The channel now claims a potential viewership in China of more than 36 million homes. China remains a tightly controlled media market, and it is still grappling with how to open its economy while still maintaining social and political control over its people. And squeezed by Asia's raging financial turmoil and by domestic woes such as a shaky banking system, China faces a slowdown in its spectacular growth rate. Still, there are early signs of success for Phoenix. Last month it hosted a sales presentation for ad executives at Beijing's Great Hall of the People. Industry sources say the event gleaned pledges for $34 million of air time on the channel. That's double the pledges made in 1996, media buyers say. Star's vice president for Phoenix advertising sales, Peggy Lam, says by early December $4 million had already come in. To maintain good relations with China, News Corp. continues to do a "lot of work at the political level in China," Star's Mr. Davey says. For example, he says, he visits the mainland about 20 times a year, and Mr. Murdoch also makes frequent trips to the region. In July, during Hong Kong's handover to China, Mr. Murdoch made the rounds as a guest of the territory's new chief executive, Tung Chee Hwa. And News Corp. doesn't just talk. In 1994 it dropped the British Broadcasting Corp. from the collection of channels it beams into China because the Chinese didn't like a program the BBC ran on Mao Tse-tung. The same year, a News Corp. unit published a flattering biography of Deng Xiaoping, written by his youngest daughter, Deng Rong. (A spokeswoman for HarperCollins says "the proposal for the book came in through normal channels" and was approved "on its merits.") Phoenix's success also owes something to how far Mr. Murdoch and News Corp. stay out of the business. "We never mention Star or News Corp.," says a former Phoenix executive. "Phoenix is meant to be seen as a channel controlled by Chinese." Indeed, Phoenix's chairman and chief executive officer is Liu Chang Le, a Singaporean businessman associated with Asia's Today. Phoenix and Mr. Liu provide "an interesting bridge between [an international media company] and China," says Mr. Davey. Phoenix's programming is also controlled by the Chinese partners, says the former Star executive. "It's all supposed to be positive and avoid political issues." Although Phoenix runs "NYPD Blue" late Sunday night, a significant portion of the programming is localized and relatively innocuous, including "Perfect Match," a takeoff on dating-game programs. Mr. Davey disputes the idea that Phoenix doesn't air challenging programs. He points out that during the Hong Kong handover, Phoenix aired the British part of the ceremonies and China Central Television didn't. "That does prove our credentials," he says. An audience survey conducted for Phoenix last year by China Mainland Marketing Research Co. showed that TV viewers in China were aware Phoenix could offer something different from official channels and that about 28% of them said they watched Phoenix occasionally to find out what was going on in Hong Kong and Taiwan. One obstacle for Phoenix: It's still technically illegal for the country's approximately 1,200 cable operators to transmit foreign broadcasting to the nation's estimated 55 million cable homes. Just how that ban affects Phoenix has been a little murky. In early September, mainland Chinese newspapers began reporting that Phoenix had "official" status -- or licensing agreements to provide programs -- on some of Guangdong Province's cable systems. That gave Phoenix distribution in about 2.5 million homes, according to Mr. Davey. But officially at least, the Ministry of Radio, Film and Television takes a different view. The ministry "has never approved the broadcasting of the Phoenix Chinese Channel on either television stations or cable stations," states Wei Zhangjua, a ministry official, in response to questions from The Wall Street Journal. -- S. Karene Witcher in Sydney, Australia, contributed to this article.

To: Maya who wrote (26639)	12/14/1997 6:12:00 PM
From: John Rieman	Read Replies (1) \| Respond to of 50808

DVD in the US......................................... asiansources.com DVD players US DVD industry poised for takeoff WHILE SALES of DVD players in the United States have failed to take off as much as retailers would like, advocates of the technology have almost blind faith in the success of the line. They base their optimism on the growing awareness among US consumers of the technological advantages DVD players have over LD players or VCRs, the most obvious of which are the better picture and sound quality. Most retailers remain confident that DVD players will boost the consumer electronic market, and dismiss the early lack of soft-ware as a teething problem that will resolve itself in time. Organizations like the DVD Video Group (DVG), a nonprofit trade association comprised of major DVD hardware manufacturers and software producers, have come out expressly to promote the line. And more companies are responding by producing titles for DVD. By the end of 1997, DVG estimated more than 600 DVD titles would be available on the market. Software blues Most retailers agree that the more titles there are in the DVD format, the more popular the players will become. Hardware is not a problem, they say, with the big brand names driving the market. "The industry has been preoccupied with hardware, but [the hardware] is fine right now," said Ken Findlay, owner of All Brands Electronics, a retail store in Little Falls, New Jersey. DVD consumers are looking for state-of-the-art features and finding them, Findlay said. "Sony and Pioneer models are in constant back order," he explained. "There are shortages in the higher end." Consumer profile Most of the current crop of consumers are electronically aware individuals who like to be first on the block with the new technology. But while mainstream consumers have yet to buy into DVD, Findlay believes it is only a matter of time before they do so. For one, prices are coming down, so affordability will no longer be a problem. "And as long as software is available, consumers will be willing to purchase DVDs," he stressed. Like Findlay, Richard Stanton, owner of DVD City, also finds demand is outstripping supply for Sony models. DVD City is a supplier that does 90 percent of its business on the Internet and the rest through a small retail store. The higher-end Sony models top out at around $1,000, but they have a lot of different jacks on the back allowing them to be more compatible with other technology. Stanton is also finding success promoting the Toshiba brand name. Models SD2107 and SD3107 feature a picture zoom option that enlarges up to four times. These models also have a color stream feature that provides high clarity as well as built-in karaoke. Stanton thinks the problem of insufficient software will soon be solved as Hollywood appears to have bought into DVD. "The software market is finally catching up with the hardware market," he said. Taking the CD path DVG spokesman Rob Williams estimated that there were more than 275 titles on DVD in October, and that there will be more than 600 by the end of 1997. "It does take time," he said, pointing to the fact that DVDs were just introduced at the beginning of 1997. When CDs were first introduced, All Brand Electronic's Findlay explained, few people bought the players until their favorite album was available in that format. Once consumers realized they could purchase all their favorite albums on CD, CD player sales skyrocketed. Similarly, while the DVD market is growing, many consumers are holding off on their decision to buy. Findlay believes people are questioning if DVD technology will stick around or be replaced by another technology. However, in recent months, more movie studios have developed movies for DVD and more music videos are available in the format. Many video stores are also now offering DVD discs in addition to VHS cassettes. "Once every major title is on DVD disc, consumers will have no reason not to purchase DVD hardware," Findlay said. "As soon as the consumer realizes that he will be able to view his favorite movie in an absolutely better format than he has ever seen before, there will be no stopping him from buying a DVD player." And once the software can be rented, why would anyone want to buy videotape again? Findlay predicts DVD will take over many of the other markets. Consumers will have them in computers, video/audio central units, cars, planes and portables. "It will become the common source from which we will receive all our information," he said. DVD City's Stanton is equally optimistic. He believes that in a very short time, possibly by the year 2000, there will be a DVD player in every American household. The DVD provides a better picture, with better sound quality and many more choices as far as programming goes. The only drawback is that one is not able to record on to it, he said. VCR and DVD complementary Findlay doesn't foresee nonrecordability as being a long-term problem, either. He estimates that the technology will be here in just a couple of years, and then the LD, CD and DVD war will be similar to the VHS versus Beta wars, with the losers becoming obsolete. Findlay is banking on DVD winning that war. DVG's Williams believes that for the time being, the market will be similar to the tape cassette/CD market. CDs are nonrecordable, so cassettes still exist. "It's not necessarily an either/or market. It might be VCRs and DVDs," Williams stated. He is also optimistic about recordable technology emerging for DVDs in approximately three to five years. "Laser disc consumers were some of the very first people to jump onto the bandwagon," he explained. "But overtaking the VCR market is something that you look at in the long term."