$20m float for pay-TV player
12 April 2006

The West Australian

A new niche player is about to launch itself on the pay-TV market with a low-cost strategy it hopes will address a continuing lack of interest by most Australians in paying for what they watch on the box.
SelecTV, headed by former Foxtel boss Jim Blomfield, is about to start marketing a no-frills pay-TV service which will offer 20 channels for $29.95 a month compared with industry giant Foxtel's packages which cost $50 to $100 depending on the options taken.
The SelecTV offering is squarely aimed at an over-50s audience and other lower income groups which it believes are unwilling to stump up the relatively high cost for pay-TV in Australia.
Its other target market is ethnic audiences via Spanish, Greek, Italian, Vietnamese and German packages which have also just been switched on in the past few days and cost between $19.95 and $44.95 a month.
The marketing campaign which will get under way in the next two to three weeks coincides with the imminent float of SelecTV. It is expecting to lodge a prospectus in the next few days to raise around $20 million at 20<cents> a share, which will represent a third of the listed company.
It has already raised $16.5 million from investors since last August to set up its satellite-based services, in the process accumulating some prominent seed shareholders including Melbourne's Myer family, tycoon Dick Pratt and Wilson Asset Management.
Corporate adviser David Williams of Kidder Williams, which is advising SelecTV on the initial public offer, said pay-TV's penetration in Australia had stalled at around 23 to 24 per cent after a decade.
"I think it's just the cost," he said.
The English-speaking package has five movie channels, news channels BBC World, CNN, Bloomberg and Euronews and a smattering of lifestyle and documentary channels including National Geographic, MTV and Ovation.
Its sport offering is limited to a couple of Europ~ean channels which Mr Blomfield said reflected that most Australians could get their fill of major sports like cricket and football on free-to-air TV and were likely to be able to do so for the foreseeable future under proposed new media laws which will continue to limit pay-TV's access to mainstream sports.
The service requires subscribers to have their own reception equipment, estimated to cost around $400.
The model is really totally different from anything that's really existed," Mr Blomfield said. "We see a few gaps."
Mr Blomfield said SelecTV's subscriber targets were relatively modest. It anticipated breaking even in two years with only 80,000 subscribers.
"We are looking at 150,000 subscribers in five years out of 6.5 million homes in Australia that don't have pay TV," he said.




Copyright 2006 KidderWilliams Ltd

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