Premiere reports second-quarter revenue jump

Also sees decline in subscribers, attributed to piracy

COLOGNE, Germany -- More than half a year after his aggressive move into the German pay TV market, Rupert Murdoch's plans for Premiere are taking shape. But talk of a turnaround at the Munich-based pay platform, in which News Corp. holds 25%, is decidedly premature.

Second-quarter figures released Thursday show a 19% jump in revenue to 272.4 million ($373.4 million) but, thanks largely to pricey German soccer rights, an equally large leap in net losses, which increased almost 16% to 37.8 million euros ($58.2 million).

A bigger problem is piracy. Premiere CEO Michael Bornicke blamed German hackers for the decline in subscriber figures, which dropped 2% to 4.16 million compared with the first quarter.

Strategically, however, Premiere is on a new track. The company has launched an aggressive advertising campaign aimed at making pay TV more mass market in Germany. This includes a deal to sell prepaid subscription, at a major discount, at local Tschibo coffee outlets.

Bornicke also has scrapped plans to copy the HBO model of producing high-profile drama series in-house. Instead, the German pay group is closely aping the strategy -- low entry cost, more exclusive sports and film/series rights -- of News Corp.'s most successful pay TV operation, BSkyB.

It all looks good on paper. But the German market has beaten Murdoch before. Back in 2002, BSkyB had to pull out of Premiere in the wake of the KirchMedia bankruptcy. The result? A 1.5 billion euro write-off.