Telefonica, Canal in HDTV deal

Hispasat 1C covers Spain, Portugal

By JOHN HOPEWELL

Telefonica Servicios Audiovisuales will acquire and co-produce content for Canal AD, the first HDTV channel to be produced out of Spain, TSA exec Jose Diaz confirmed at the Malaga Spanish Film Fest.

Soft-launched in December, Canal AD has inked a carriage deal on satellite system Hispasat 1C, whose footprint covers Spain, Portugal and the rest of Europe.

It can be viewed free of charge by subs who own an HD-ready TV set and buy a 60cm satellite dish and relatively low-cost -- some $400 -- DVB-HD MPEG4/AVC decoder.

Telefonica also plans to incorporate Canal AD onto its Spanish Imagenio Internet TV service "within the next six months," according to Diaz, and to adapt the channel for its direct-to-home pay TV services in Brazil, Chile and Colombia.

Imagenio's carriage of Canal AD poses a challenge for Digital Plus, Spain's biggest digital satellite pay TV operator, which is studying the possibility of launching its own HD channel.

While pay TV operators such as the U.K.'s BSkyB have bowed HD services to set themselves apart from rivals, the high cost of HD transmission in Spain, because of the its large bandwidth requirements, has slowed the launch of HDTV in the country.

Digital Plus has traditionally targeted a more upscale and capitalized client base than Imagenio. But IPTV Imagenio will be muscling into this market segment with Canal AD.

Per Diaz, TSA is talking to potential content suppliers such as the BBC and will offer free equipment use against equity in HD projects.

TSA aims for AD primetime to primarily feature fiction programming, Diaz added, calling on creators to approach TSA with ideas for content.