Telstra Saturn deal with TVNZ tipped

By RICHARD BRADDELL

There's no deal yet, but the jungle drums are saying Television New Zealand and Telstra Saturn are about to strike a joint programming and distribution agreement.

Telstra Saturn's chief executive, Jack Matthews, was emphatic yesterday that no accord had been reached. But he admitted that his company, along with Sky, had been talking to TVNZ.

Sources said the deal would make sense for Telstra Saturn because it would give access to a wealth of TVNZ programming content and potentially widen its footprint to the entire country via space. TVNZ has an Optus satellite.

At the moment, Telstra Saturn operates only in Wellington, but has begun construction of a cable TV and telecommunication network in Auckland.

Its analogue network is set to go digital at year's end, about the same time it fires up a fully digital network in Christchurch.

Given that Telstra Saturn already carries TVNZ's free-to-air channels, it would be looking for additional programming to fill capacity for hundreds of channels.

These might involve repackaged and more in-depth news programming, perhaps broken up to provide full streaming video over its Chello high-speed internet portal.

For TVNZ's part, it might get a sweeter digital distribution deal than it has tried to negotiate with Sky Television, since distribution via Telstra Saturn's network could enable a degree of interactivity Sky may not be prepared to offer.

Sources suggested a deal could be completed before Christmas. But more cards fell on the table yesterday, when TVNZ gave some indication of its plans in a select committee and on One News, that could accelerate the process.

Sky chief Nate Smith said a broadcaster like TVNZ wanted to be on every platform, be it Telstra Saturn, Sky, Ihug or Walker Wireless.

That, he said, is the definition of broadcasting.

But distribution negotiations between Sky and TVNZ have to date been fruitless.

Mr Smith said Sky's people monitors showed TVNZ was getting caned by not being on a digital platform.

Telstra Saturn has signed a distribution agreement with Sky to enable it to bundle Sky's basic digital service with dial-up internet, mobile telephony, long-distance calling and other services to customers outside its network - a strategy that will give it a potential customer base when it expands its cable network to new areas.

It would almost certainly try to do the same using TVNZ satellite capacity and repackaged TVNZ content.