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Week of July 27, 2015

Just how big is the digital world?
focus on world

The French national data protection authority (CNIL) this week indicated, once again, that internet search provider Google is failing to comply with the “right to be forgotten” as recognized last year by the Court of Justice of the European Union (CJEU). Google, they say, has callously dismissed the directives intent by delisting references to webpages individuals consider “outdated or offensive” only from the search engines national domains and not the universal google.com. Non-compliance could result in tribute paid to the French government.

Google, unsurprisingly, is having nothing to do with this. "No country should have the power to control the content that someone in another country can access,” said the public response, which asked the CNIL to withdraw its demand. “If the right to be forgotten is now the norm in Europe, this is not the case worldwide. There are countless cases where what is illegal in one country is not in another. This approach represents a race to the bottom: in the end, the internet would be just as free as the least free place in the world.“ Google lawyers are in the process of appealing the CJEC decision but are pursuing compliance limited to removing links to “offending” webpages on national Google domains. (See more about Google here)

"We have taken note of Google's arguments, which are mostly of a political nature,” retorted the CNIL, quoted by the BBC (July 31), while its view is “strictly legal.” The genesis of the European “right to be forgotten” directive stems, in part, from a visceral fear of documents being used for inhuman ends. Interests, political and otherwise, have co-opted this anxiety for more human gain.

Neither Google executives, board members nor shareholders will tolerate a legal decision anywhere that could form the basis for an existential threat. A solution - truce, more likely - will come from a political decision. Sometimes that’s popular and sometimes not.

Reach exceeding grasp, deal fails
No matter what you hear in Silicon Valley, patience is a virtue

And so the big merger plans of German media houses Axel Springer and ProSiebenSat1.Media, widely reported, slipped away quietly this week. For all the obvious reasons, very few observers expected this one to more forward. The two companies have, however, agreed to jointly pursue digital investments, details forthcoming.

To a great extent the failure of this deal falls hard on the very impatient Axel Springer CEO Matthias Döpfner. The company’s growth under his leadership has been built on tactical acquisitions of the digital order, none with the ear-ringing buzz of a major TV broadcaster. Nor with a big name English-language publication; the Financial Times bid was short a mere €100 million.

In the end ProSiebenSat CEO Thomas Ebeling didn’t need the deal. With Axel Springer’s controlling shareholder Friede Springer intractable about absolute control Herr Ebeling, not beholden to a monolithic force, clearly saw no strategic advantage. ProSiebenSat may or may not ever be a takeover target. Axel Springer, some day in the future, will be valued by the sum of its parts.

Licensing plan for broadcasters moves along, political plan not so easy
just bring cash

In the midst of tackling weighty issues economic and political the Greek government is pressing reforms on the media sector. A draft law under consideration would, if moved forward, force privately owned television broadcasters to apply for licenses. A 30 day public consultation period began last week and reaction has been less than positive.

Greek private TV broadcasters have operated under “temporary permits” since 1990. A law passed in 2007 established rules for broadcast licensing but implementation has been delayed by a variety of amendments. “A new TV landscape in the country,” said deputy infrastructure minister Christos Spirtzis, will come this autumn with “different ethics than we are used to,” quoted by typologies.gr (July 24).

The draft law authorises the National Council for Radio and Television (ESR) to hold auctions, exact number yet to be determined. There will be national and regional licenses for either general interest or “non-informative” channels. Any legal entity can apply so long as there’s €8 million in the bank. A national general interest channel will cost €5 million, entertainment channels only €2 million. The license fee must be paid all at once. Fees for regional channels are yet to be determined. (See more about media in Greece here)

Successful applicants will be required to fulfil minimum employment quotas ranging from 400 people for national general interest channels to 50 people for regional channels, reported tovima.gr (July 28).

Aside from the financial constraints imposed on current broadcasters, several suffering in the severe economic conditions, there’s a bit of an administrative issue with the ESR. The draft law requires “full” approval from the ESR board. Alas, there are but four current members of the seven person board and naming replacement members requires a four-fifths approval from the Chamber of Deputies, in the current environment not considered a simple task.

New digital channels dig into archives
endless opportunities

Come September Italy’s public broadcaster RAI will be offering new radio channels. All will be available online and via the DAB+ platform. Two existing RAI radio channels will be rebranded.

Radio6Teca will explore the vast RAI archives, both spoken word and music. It is an upgrade for an online-only channel available since 2010. The archive material will be presented in original form with new introductions. In September, for example, past Prix Italia programs will be offered. (See more about media in Italy here)

A bit more experimental is Radio7Live, which will offer as the name suggests live broadcasts. Some will be formerly live events previously broadcast. It is designed to be quite diverse, from music festivals in Italy and elsewhere to studio performances.

Surprising only because it’s new is Radio8Opera. All opera, all the time. This is, of course, Italy. It replaces an online-only pop rock channel. Along with newer material, it will offer recordings of the RAI Orchestra dating from the 1950’s.

The two cable channels (Filodiffusione - FD), also on FM in major cities, will continue as Radio4Light (soft pop) and Radio5Classica (classical music). These channels are also available via satellite and DVB-T platforms.

The digital plan, said RAI radio director Nicola Sinsi, is to extend DAB+ coverage beyond major cities, currently a bit more than 40% of the population.

Ambition and creative finance form partnership
“I sometimes feel small”

The buyout of French broadcaster Next RadioTV involving billionaire financier Patrick Drahi, announced this week, continues the transition of media from operating to financial enterprises. In the complex transaction, dutifully described by Le Monde (July 27), M. Drahi formed Altice Contents as a subsidiary of Altice Media, which he owns, with NextRadioTV principal Alain Weill, who sold his 49% stake in NextRadioTV for €670 million. That amount is reinvested in Altice Contents making M. Weill a 24% stakeholder and CEO. A call option allows M. Drahi to buyout M. Weill’s stake in the company after March 2019.

The next step is a €595 million public offering, bank financing readily available, for outstanding shares in NextRadioTV traded on the Euronext Paris exchange. Altice Group owns French telecom SFR, Virgin Mobile, Portugal Telecom and, more recently, US mobilecom Suddenlink. "An alliance with a leading telecom is now an absolute necessity,” said an internal memo from M.Weill, quoted by Le Monde. (See more about media in France here)

Altice Media acquired French newspapers Libération and L’Express and is in the process of buying
B-to-B publisher Intescia, formerly known as Reed Business France, which owns online business portal strategies.fr. M.Drahi has assembled an impressive coterie of financial experts for Altice Media from Morgan Stanley’s Dexter Goi and Bernard Mourad to former Liberty Global treasurer Dennis Okhuijsen and now M. Weill.

NextRadioTV evolved from M. Weill’s acquisition in 2000 of enfeebled French national radio channel RMC after leaving NRJ Group. Digital all-news BMF TV was added in 2005. Both have achieved a level of prominence - and criticism - in France for “Anglo-Saxon” programming methods. Growth opportunities in France, however, are limited by market share caps. "I sometimes feel small in France," said M. Weill to Le Monde. “Rather than being like the rest, I prefer building something more ambitious.”

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