Market Insight

Strained relationships between Norwegian TV2 and Canal Digital continue

November 27, 2012

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The Ministry of Culture has asked Norway's TV2 and Canal Digital Kabel to resume negotiations in an increasingly bitter carriage dispute that saw TV2's group of thematic channels dropped by the cable operator. News channel TV2 Nyhetskanalen; light entertainment channel TV2 Bliss; and TV2 Filmkanalen were all dropped from the cable system after a 23 November deadline passed without agreement. Dispute centers on a shift of the channels from the standard basic pack to the lower-reach Freedom tier.

Friction between TV2 and Canal Digital Kabel began back in 2011 following an increase in the carriage fee for 2012 for TV2's main channel to NKr8 (€1.087) per month. The carriage fee for TV2 was previously increased to Nkr5 (€0.68) in 2011 from Nkr0.57 (€0.0775). Fellow cable operator Get and Canal Digital challenged the price increases but lost the ensuing legal battle. Six months later, in June 2012, Canal Digital dropped TV2 channels TV2 Zebra and TV2 Sport from its line-up. This latest dispute means that only the must-carry TV2 main feed and its HD version are now offered on the Canal Digital cable network. Carriage fees for the thematic TV2 channels have not been revealed by TV2.

Canal Digital Kabel remains the only major Norwegian pay TV operator not to have completed negotiations over the TV2 thematic channels. In July 2012 TV2 successfully struck agreement with Canal Digital's main cable competitor Get and then in November reached agreement with pay DTT operator RiksTV. Since the agreement, both operators have announced increases in their basic fee, with RiksTV increasing its price from December 2012 and Get raising its fee for direct subscribers at the start of 2013.

 The focus of this latest dispute appears to be on reach. In the summer of 2012, the niche TV2 channels were placed in Canal Digital Kabel's Freedom offering on top of 28 core basic channels, meaning they became optional. That move doubtless would have resulted in a significant drop in reach for the TV2 thematics, impacting both TV2's reach and revenue derived from advertising. Canal Digital Kabel has over 490,000 cable TV subscribers taking basic.

By contrast, the new agreement with Get saw the channels placed in the core basic offer, ensuring potential viewership for all of TV2's channels.The thematic TV2 channels represent around seven per cent of weekly viewing in Norway, but Canal Digital has suggested that its customers have a wide choice of alternatives to the channels, making the carriage of the TV2 thematic channels of lower importance. 

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