DF1 was the first digital television company in Germany. Founded by the Kirch Group and headquartered in the Munich suburb of Unterföhring, it provided the country's first digital satellite package delivered over Astra. Its short existence was plagued by legal problems and a failed merger with Premiere AG, which was halted by orders of the European Commission. Subsequently, several of its shareholders withdrew from the Kirch Group and the former DF1 was subsequently put up under Premiere's hands as Premiere World.
On 1 April 1996, Kirch started testing twelve digital satellite channels, at a time when several companies were interested in starting a digital satellite operation. These channels were the basis for DF1 and were expected to have as many as five million subscribers within a decade.[1] Coinciding with the signal tests, a pilot service started for 100 households.[2]
DF1 employed its own set-top box known as d-box. Deutsche Telekom employed the SECA system for its digital cable network, which meant that DF1's channels were incompatible with the encryption method used by the cable company. The TF1 Group also showed interest in using the d-box STB.[3] Telekom was accused of blocking a competing service, disabling it from having Kirch's channels on cable.[4]
On 11 June, Kirch revealed details of the DF1 service, as well as its marketing and programming strategies, eyeing for a potential early July launch.[5] It was also in discussions with content providers to launch an interactive games service.[6] In early July, it formed a partnership with BSkyB, after the British partner was dissatisfied with Bertelsmann, which turned out to be one of Telekom's partners.[7] An agreement with TimeWarner was announced days ahead of launching, enabling its movie channels to air Warner Bros. titles.[8]
DF1 started full broadcasts on 28 July 1996, a Sunday, with its key selling point being the multi-camera set-up of the Formula One race held that day, one of its interactive television services.[9] After launch, it signed deals with MCA for Universal titles, while RTL (Bertelsmann) was also snatching titles to 200 titles from the company. Both companies received the highest bids so far at the time.[10]
In a strategic about face for the network, Canal+ announced that it would launch several of its channels on DF1.[11] During its first month, authorities viewed DF1 as some sort of "distribution cartel"[12] On 29 August, it inked an exclusive 10-year deal with The Walt Disney Company worth US$1.3 billion, which would also lead to the launch of a localized Disney Channel.[13] It then threatened to cut the supply of movies to the Premiere network after accusing the competing network to air Forrest Gump as an exclusive, when, in reality, DF1's channels also aired it.[14]
This eventually led to a planned ban on DF1 subscriptions outside of the state of Bavaria, where Kirch Media was headquartered.[15] The ban was lifted later in February 1997.[16] On 7 March, BSkyB left DF1, causing Kirch to continue managing the service alone.[17] In order to try boosting its penetration, it signed deals with Bertelsmann and Deutsche Telekom for a potential source of revenue.[18] It was eyeing a merger with Bertelsmann's interests,[19] a move which Universal Pictures criticized and lodged a complaint to the European Commission to prevent it.[20] On 27 May 1998, the EC banned the planned merger, this time between DF1 and Deutsche Telekom. The rejected plan involved the conversion of Premiere into a digital pay-TV platform.[21] The Kirch Group announced on 1 July that DF1 would continue operation; at the time, it had 160,000 subscribers.[22]
After the rejection of the merger, both Bertelsmann/CLT-UFA (37,5%) and Kirch (25%) agreed to raise their stakes in Premiere. Canal+ owned the remaining 37,5% but agreed to sell.[23]
^Kirschbaum, E. (1996, Apr). Kirch bolts from digital TV gate. Variety, 362, 42.
^NEW MEDIA NEWS IN BRIEF. (1996). European Media Business & Finance.
^BBC TO SPEND POUNDS 200 MILLION FOR DIGITAL TERRESTRIAL UPGRADE PLAN industry execs predict the beeb will need partners in future. (1996). European Media Business & Finance.
^Rohwedder, C. (1996, Jun 06). Deutsche Telekom Accused Of Blocking Digital-TV Rival. Wall Street Journal
^Dempsey, J. (1996, Jun 11). Kirch to unveil details of pay-TV service. Financial Times
^Rose, M. (1996, Jun 19). Sega Interactive Channel Hits Prime Time --- Analysts Say Limited Appeal May Hurt Success. Wall Street Journal
^Parker-Pope, T. (1996, Jul 09). BSkyB, Kirch Group Form Link for Digital-TV Service. Asian Wall Street Journal
^Time Warner to let Kirch show films on pay TV. (1996, Jul 26). Wall Street Journal
^Althaus, S., & Dempsey, J. (1996, Jul 31). RTL and Kirch purchase film rights from MCA. Financial Times
^Canal Plus to join rival Kirch package. (1996). New Media Markets, 14(28), 1.
^MEDIA EYE ON...GERMANY. (1996). European Media Business & Finance
^Bates, J. (1996, Aug 30). Kirch, Disney Make a Deal for German Pay TV; Media: Move, estimated to be worth $1.3 billion, means mogul now has alliances with all leading studio owners. Los Angeles Times
^Snoddy, R. (1996, Sep 12). Kirch threatens to cut supply to pay-TV. Financial Times
^Murray, C. (1997). DF1 faces return of ban on national coverage. New Media Markets, 15(5), 16.
^Cecile Rohwedder (1997, Feb 20). Court Lifts Ad Ban on Kirch's DF1. Wall Street Journal
^Ipsen, E. (1997, Mar 08). New Digital Retreat BSkyB Exits 2d German TV Deal. International Herald Tribune
^Cacilie Rohwedder (1997, Jun 20). Germany's DF-1 nears two deals to boost venture. Wall Street Journal
^Kirch, CLT-UFA Give First Details Of Their Planned Pay-TV Merger. (1997, Nov 07). Wall Street Journal
^Taddia, M. (1997). Hollywood threatens German merger. New Media Markets, 15(42), 1-4.
^EC prohibits pay-TV merger. (1998, May 28). Birmingham Post
^DF1 TO CARRY ON FOR NOW. (1998). Interspace, (646), 1.
^German pay TV plan rejected. (1998, Oct 06). Financial Post
