Trio Ends Deal to Develop European Digital TV

French pay TV company Canal Plus indicated Thursday that its relations with Germany’s Bertelsmann are deteriorating and that a three-way alliance with Britain’s BSkyB to develop digital pay TV across Europe is dead.

British Sky Broadcasting, a unit of Rupert Murdoch’s News Corp., is withdrawing from a three-month alliance with Bertelsmann and Canal Plus. In response, Canal Plus issued a statement saying it “regrets that Bertelsmann seems to have resigned itself so quickly to doing without a partner so powerful and competent in the pay TV business as BSkyB.” BSkyB’s pullout came just months before the fall launch of the joint digital TV service planned for Germany.

The New York Times reported Thursday that Canal Plus and BSkyB are disturbed that Bertelsmann is merging Ufa, its audiovisual division, with Audiofina Cie’s Luxembourgoise de Telediffusion to create a separate broadcasting venture. Canal is worried this would make Bertelsmann a competitor with it in France even while Canal and Bertelsmann are partners in Germany.