Deals for content, distribution

     Europe's media giants are getting ready to surf the web. The premiere league of the continent's commercial media companies are positioning themselves for the internet's arrival in European homes. The leading players include UK-based BSkyB, the French Canal Plus and German media giant Bertelsmann.
     Last week CLT-UFA, the largest broadcasting and production company in Europe--part owned by Bertelsmann--confirmed that their German channel, RTL, was negotiating with America Online to set-up ''access gateways" on the internet. In addition to these portals, Bertelsmann is getting into new media content and has launched a broadband division that will produce interactive entertainment for PCs and TVs beginning next year.
     To cover the distribution base, Bertelsmann has also confirmed that it is talking about a joint bid for part of Deutsche Telekom's cable television operations in partnership with Microsoft. 
    Rupert Murdoch's News Corp., the 40 percent stakeholder in BSkyB, sees primary content rights--especially in soccer-- as the best insurance policy for an online future.
     The theory goes that European audiences are going to access television via the internet, just as radio listeners tune into the airwaves today. In that event, distribution platforms can no longer be relied upon as tollgates, and governments will be powerless to prevent companies from broadcasting wherever they want to.
     This would be a mixed blessing for BskyB. It now enjoys strong Pay-TV revenues, despite having faced numerous setbacks from government regulators.
      But with universal distribution, the key to success would be control of content. With the right content, and for Murdoch this means soccer, News Corp. would have whatever access to continental viewers it wanted, and the need for alliances with European media groups would disappear.
     Nothing would please News Corp. more.  Although the company finally got a toehold in the mainland Europe, gaining a 35 percent stake in an Italian digital TV station earlier this month, this came only after a number of   failed attempts to join up with such media companies as Telecom Italia, Bertelsmann, Canal Plus, Deutsche Telekom and Kirch. 
     French media giant Canal Plus is following a similar content-based strategy. The company is a leading pay-TV operator, with a presence in 11 countries and more than 10 million subscribers. It recently announced a collaboration with Universal Pictures in which the two companies will co-finance British production company Working Title, which was founded by the directors Tim Bevan and Eric Fellner. In addition to ‘’Four Weddings and a Funeral’’ and ‘’Bean,’’ two of the most successful British productions ever, Working Title has been responsible for art house films such as ‘’My Beautiful Laundrette.’’
     Where they can, most media companies are backing all options with investments in both distribution and content. However, not all bets are expected to pay off, and as the era of the web approaches many of the established operators will happily settle for a foothold in
the new media topography.

-Simon Bond writes from outside London.