Galaxy (Australian TV)
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- For other uses, see Galaxy Television (disambiguation).
Galaxy (a trading name of Australis Media) is a former provider of pay television programming in Australia via satellite and wireless cable (microwave) delivery methods.
Galaxy began broadcasting on 1 January 1995 with eight channels via microwave, making it the first provider of pay-TV services in the country. Digital satellite broadcasts began in September 1995.
Australis Media held an exclusive license to broadcast pay-TV in Australia via satellite until 1997. Their main competitors were Foxtel and Optus Vision, both of which operated separate cable networks. The Galaxy channel package was franchised to Austar in regional areas.
At its peak, there were around 120,000 Galaxy subscribers. The service ceased shortly after Australis Media went into liquidation on 18 May 1998.
[edit] History
In 1993, the Government of Australia called tenders for Australia's first pay-TV licenses. Surprisingly, the first license was purchased not by one of the major media players but by an entrepreneur, Albert Hadid, who quickly onsold it for a tidy profit. The license ultimately ended up in the hands of Australis Media, an upstart company in which TCI and Guinness Peat Group were major shareholders. Australis paid a total of AU$333 million for the satellite and microwave licenses they would require to launch a pay-TV service to be branded Galaxy.
Australis secured a contract with four major Hollywood studios - Columbia TriStar, Universal Studios, 20th Century Fox and Paramount Pictures - for the exclusive rights to broadcast their film and TV product on its Galaxy service. The output of these studios formed three channels - SHOWTIME, ENCORE and TV1 - that would become the mainstay of Galaxy's programming.
After the remaining output from the major studios was purchased by Optus Vision, Galaxy's other competitor, the News Corporation and Telstra owned Foxtel, was forced into an embarrassing deal to purchase content from Australis at a reported cost of AU$4.5 billion over 25 years.
Despite this lucrative deal, the financial situation at Australis was troubling. The installation cost of equipment was high (reportedly around $500 for a microwave antenna and $1000 for a satellite dish), forcing them to greatly subsidise installation costs. Furthermore, increased competition from Foxtel and Optus Vision forced Galaxy to lower prices further or lose customers.
The financial crisis at Australis meant that much of Galaxy's life seemed to be spent trying to save the company from receivership. In September 1995 a merger was proposed by Australis and its biggest rival, Foxtel. The proposal was rejected by the Australian Competition and Consumer Commission, citing fears that a merger between the two businesses would stifle competition. Another Australis-Foxtel merger was proposed in July 1997 but was also vetoed for similar reasons. Another proposal made in August 1996 under which Australis and Optus would share satellite infrastructure (while still trading separately) was approved by the ACCC but later blocked by the Australian Federal Court.
With hopes of a merger dashed and serious cashflow problems continuing to plague the company, Australis relied on "rescue packages" of capital injections from a number of new investors (including Kerry Packer's PBL, among others) in order to stay afloat.
On 18 May 1998 the Supreme Court of New South Wales declared that Australis was insolvent and the company went into liquidation. It has been estimated that losses totalled AU$800 million. Of those who purchased assets after the company's collapse, the biggest beneficiary was likely their biggest competitor Foxtel, who were able to purchase Galaxy's 65,000 remaining subscribers as well as terminate their crippling programming deal and renegotiate directly with the studios. There has been considerable controversy over the role Foxtel may have played in Galaxy's demise.
[edit] External links
- Australis Background - an in-depth log of the life of Australis Media. (Link no longer seems to be working, use Google's cache.)
- Rupert's killer of a deal - a news article on the allegations that Foxtel unfairly contributed to Galaxy's death.
- An extract from Mark Westfield's 'Gatekeepers' which recounts the negotiations between Australis and PBL for the first rescue package.
- The Demise of Australis - an editorial using the death of Galaxy as an example of the negative effects of Australian media regulations.
- Online news article announcing that Australis has collapsed.
