German pay-TV broadcaster Premiere plans to branch into free-to-air television as part of a deal under which it has secured the German rights to show the Uefa Champions League soccer competition for the next three years. Premiere argues that low market penetration rates in Germany - well below the 40-45 per cent seen in UK and France - leaves plenty of room for expansion. It forecasts it will have 4 millions subscribers by the end of 2007 compared with the present 3.3m in Germany and Austria.
Many analysts contend that Germany's large range of free alternatives means viewers have little incentive to pay extra for content such as top football matches. The company is paying an estimated €50m for each of the three seasons from mid-2006 beating commercial rivals ProSiebenSat.1 and RTL for the rights. To meet the concerns of sports bodies which feared that viewers could be turned off if all matches are only available via pay-TV, Premiere has guaranteed that it will broadcast 13 of the 125 matches each season on a free-to-air channel. To do so Premiere will have to diverge from its pure pay-TV model by either launching or acquiring a rival channel.
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