Sony, Fuji Join Murdoch’s Digital TV Service

TOKYO â€”  Moving to add fresh pieces to his global business empire, media mogul Rupert Murdoch announced Wednesday that Sony Corp. and Fuji Television Network Inc. are joining his Japanese satellite broadcasting venture.

Sony and Fuji Television, a major Japanese broadcaster, will become equal partners in Japan Sky Broadcasting Co., a 150-channel digital television service due for launch here in April.

JSkyB was set up in December 1996 as an equal partnership of Murdoch’s News Corp. and the Japanese software firm Softbank Corp., with initial investment of about $170 million.

It is expected to face stiff competition from PerfecTV, a similar service run by Japanese trading companies that started broadcasting here in October, and DirecTV Japan, which plans to start a 100-channel service this fall. Hughes Electronics Corp. owns a 35% interest in DirecTV Japan.

JSkyB said News Corp. and Softbank will sell shares to Sony and Fuji Television to give the four firms an equal partnership in the broadcast venture.

In addition to these four major shareholders, Japanese advertising agency Dentsu Inc., telecommunications firm Hikari Tsushin Inc., trading company Marubeni Corp. and leasing company Orix Corp. will make smaller capital investments, JSkyB said. No specific figures were given.

Asked about reports that Walt Disney Co. may also invest in JSkyB, Murdoch said that “there have been discussions with various Hollywood studios for some lesser investment but nothing has been decided on.�

Each of the equity partners can bring particular strengths to the broadcasting venture. Fuji Television is expected to be a major provider of Japanese-language content, a key need for such multichannel services.

Sony is expected to provide both video and music programming. It is also a major producer of digital studio cameras and broadcasting equipment.

While Sony’s largest satellite TV broadcasting role will be with JSkyB, it also owns 5% of PerfecTV, which is primarily owned by the Japanese trading firms Nissho Iwai Corp., Sumitomo Corp., Mitsui & Co. and Itochu Corp.

Sony also manufactures equipment for PerfecTV and is building a digital broadcasting studio for DirecTV Japan.

Although some aspects of competition among the three multichannel operators--which together may deliver Japanese consumers a choice of 300 channels--are expected to be fierce, there is likely to be cooperation in other ways.

“We have in fact agreed with PerfecTV; we will try to live in an era of coexistence with them,� Murdoch said in response to a question about Sony’s complex role in the competing services.

Antennas and set-top boxes, for example, are expected to be compatible for JSkyB and PerfecTV, he said, so subscribers could receive either or both services with a single set of equipment.

“Unfortunately it will not be possible to do that with Direct Television because they are 20 degrees away in the sky, and it would take too big a dish,� Murdoch said.

News Corp. shares fell 37.5 cents to $17.875 on the New York Stock Exchange.