A consortium of major entertainment companies composed of Time Warner, Sony Corp., Thorn EMI, PolyGram and Ticketmaster are expected to announce Monday plans to launch a global video music channel to compete against MTV, industry sources said.
The new music video channel is conceived as a high-tech version of MTV where viewers would also be able to shop for concert and sports tickets, CDs and other music and entertainment industry merchandise, according to people familiar with the plan.
The four entertainment companies--among the world's biggest producers and distributors of recorded music--would be able to supply the new channel with a steady flow of music videos and other entertainment programming.
But a key element of the plan is the inclusion of Ticketmaster, the national ticketing service, which was taken over by Seattle investor Paul Allen last year. Allen is a shareholder and co-founder of computer software giant Microsoft.
Sources said Allen wants to use Ticketmaster as a launch pad into the coming age of interactive television and has been having talks with several of the cable industry's biggest players, including Liberty Media Corp., the programming arm of Tele-Communications Inc.
The consortium is not expected to launch its music channel until 1995 and will concentrate initially on fast-growing overseas markets that are just beginning to receive cable TV.
The promise of mixing MTV's lucrative child and young adult audience with home shopping has also spurred MTV to begin testing the sale of CDs and other music industry merchandise later this year, with the possibility of launching a new MTV-oriented home shopping channel.
Although Time Warner is the country's second-largest cable TV operator and would be able to support a domestic launch, most cable systems nonetheless do not have the space to add more channels. Additional channel capacity on U.S. cable is not expected for several years.
Moreover, challenging MTV domestically will not be easy. The pioneer video music channel is in almost every cable TV home, and its sister service, VH-1, reaches 47 million. MTV claims that worldwide it is available in 251 million homes. In the mid-1980s, cable mogul Ted Turner tried to launch a competitor to MTV, but it failed after a few months.