News

European Net-Alliance Web Takes New Twists

7/09/2000 8:00 PM Eastern

Frankfurt, Germany-Vivendi S.A.'s recent announcement of changes at its Internet-related units was just the latest indication that the web of Internet ties between European media firms is in a state of constant flux.

The changes follow the unveiling of a deal that will see a three-way merger of Vivendi with The Seagram Co. Ltd. and the Vivendi-controlled Canal Plus S.A. entertainment conglomerate.

Vivendi said recently that its VivendiNet unit-a holding company for its Internet-related businesses-will oversee most of the Internet activities for the combined Vivendi-Seagram, which includes Universal Studios and Universal Music Group.

As part of the whole process, one of Canal Plus' top officials, Alex Berger, will step out of his role as chairman and CEO of Canal Numedia, a unit that houses Canal Plus' Internet activities tied to its programming and direct-to-home platform assets.

He will retain his other title, co-chairman of VivendiNet, and also serve as a senior advisor to Canal Plus chairman and CEO Pierre Lescure, who will become co-chief operating officer and board member of Vivendi Universal once the deal is completed.

The moves indicate not only Berger's clout within the company, but the importance interactive TV and the Internet will hold within the combined Vivendi-Seagram.

Universal Music is widely seen as one of the most attractive elements of the Seagram deal for Vivendi. The unit is expected to become increasingly valuable as music distribution via the Internet grows.

In addition to VivendiNet, Vivendi also has a separate Internet-related business called Vizzavi, a joint venture with U.K.-based Vodaphone Airtouch plc that operates a multiaccess portal for Web-enabled mobile phones and other devices.

"Our strategy includes broadband," one source within Canal Numedia said. However, the source noted that high-speed Internet access in France is developing somewhat more slowly than expected.

Broadband is the future at European media heavyweight CLT-Ufa, said Johannes Züll, who heads the company's recently formed new-media unit.

That company announced this spring that it will merge with Pearson TV, a subsidiary of Britain's Pearson plc. And Züll's division soon may forge an alliance with Bertelsmann Broadband Group, according to industry speculation. BBG is a unit of one of CLT-Ufa's corporate parents, Bertelsmann A.G., and it intends to introduce broadband services throughout Europe.

Germany's powerful Kirch Group is also on the Internet trail. It set up Kirch New Media A.G. last fall. And with the recent word that Kirch is combining its SAT.1 network unit with the Pro Sieben Media A.G. group, Kirch New Media is expected to merge with Pro Sieben Digital Media GmbH.

However, "things are moving too fast these days to say something before the contracts are signed," Kirch New Media director of communications Christian Faltin said, declining further comment.

September