United Pan-Europe Communications, best known as one of Europe’s leading cable operators, is also set to become a major satellite pay-TV operator. The company’s president, Mark Schneider, talked to Interspace about the place of DTH in his plans…

United Pan European Communica-tions (UPC), fast becoming one of the leading forces of change in the European cable industry, last month also made a significant foray into satellite DTH broadcasting by buying Polish pay-TV operator @Entertainment. Mark Schneider, UPC’s president, says he will boost the number of channels available to @Entertainment’s Polish DTH and cable subscribers. Schneider says there is no chance of any rapprochement with the platform’s arch-rival Canal Plus Polska.

Speaking exclusively to Interspace, Schneider says that now that the purchase of @Entertainment is complete, "we are going to go and build our business. A satellite platform business is wonderful, and we bought this business to keep it and not to flip it off to Canal Plus or somebody else. We are sitting on top of 40 million people and another 40 million in markets where we are the largest cable operator next door in Czech and Hungary. The odds on us not selling 300,000-400,000 DTH units to take this to cash-positive are nil. We are going to sell a lot more than that."

Schneider says UPC is not afraid of making the necessary investment in Poland, or anywhere else in the ever increasing portfolio of UPC systems, and that the company is in Poland (and the DTH business) for the long haul. He cannot restrain himself from taking a mild dig at third party operators such as Canal Plus, which he sees as seeking a free ride on the coattails of somebody else’s investment. "[Our holdings] all require investment," he says. "We are not an Internet company riding on someones capital investment, which I see as one of the big debates that will go on for the next couple of years. My view is that if you build the pipeline, the highway, then you should have some say or control in what goes on it. That’s certainly our expectation and desire as we build our networks. Our philosophy is not to be exclusive, but inclusive. We want to give the consumer the very biggest book store or magazine rack that’s possible. It is not in our interest to exclude content, acting as the gatekeeper. We want that gate to be as wide open as possible provided that any kind of reasonable commercial transaction can be made between the parties. That’s something Canal Plus does not understand. It’s flatly beyond their comprehension for whatever reason. I do not know why, and I have watched them for a number of years now and they do not understand that last statement."

UPC, in addition to its Polish satellite system, is also creating a European HITS satellite-delivered service for cable and DTH reception. "Why keep the satellite content tight compared with cable?," says Schneider. "There’s no difference. Your whole objective is to offer choice, and as far as Poland is concerned we will keep making it more rich, that’s the objective. Cable has an inherent value in a country like Poland where it is aspiring to wealth. It may not be right there yet, but from the way they are behaving and growing their country, they are going to want lots of choice and lots of channels like anyplace else. What you can expect to see is a broadening of offering and choice on satellite. But a cable hook-up offers much more than satellite on a house by house basis. There’s a purpose for both and we see satellite for the rural or less dense areas, or our competitors areas. It’s a way of extending the reach of our business, but that does not mean you offer less choice."

Schneider also sees considerable satellite and cable spin-off benefits resulting from its 10 per cent stake in Scandinavian Broadcasting System – itself in the process of absorbing Central European Media Enterprises. "SBS and [ourselves] are in many of the same markets, doing different things. They are developing local programming, combined with their large-scale buying of Hollywood movies and sports and other programming. They are a match to our own content development, with synergies to buy together for them and our own platforms. They also want to be part of those platforms, which gives them a chance to invest in those platforms going forward. I very much like the way Harry Sloan attacks the business, and it’s a great partnership for us. They are also an advertising driven vehicle, with lots of eyeballs. Market awareness is a large part of what are going to need to do."

Schneider stresses there is no magic formula for these different properties and investments. "We have a country by country strategy, with a different formula for each country and language group. We have two strategies, the big strategy and the other is the implementation or sub-group. The big strategy is simple, to get everybody served with as much service as we can at the best price and with the highest quality. We want them to get voice, video and data and to think of us as the premier supplier to their homes and businesses over time. That’s the big strategy. Each country then offers a different set of challenges in [terms of] knowing what is happening in the local TV business, who are the players in the news business, [and] what is the state of regulation."

UPC is developing its own range of niche channels, and Schneider’s view is that there is plenty of scope for new broadcasting niches. "People have said there were three networks and that was enough, then it was four and then five and then HBO and ESPN and CNN and people said that would be plenty," he said. "Then it was a few more speciality channels and that was going to be enough, and then there was 100 of them and that was plenty. More is always better than less, and I think we are going to give people choice, because they want to watch what they want, when they want. So that choice will break down further and further until we get to pure transactional television, with people going through the menu just buying that product they want. Our job is not to be elitist about what people want, and simply to try and satisfy those wants from high brow to low brow."