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Aussie feevee industry catching on.

SYDNEY After five years of lawsuits, huge losses and the demise of three carriers, Australia's feevee industry is finally streamlining. Last week, moribund carrier Cable & Wireless Optus talked its movie suppliers Disney, MGM and Village Roadshow into cutting A$250 million ($166 million) from their fees over six years.

In return for the studios shaving 40% off Optus' minimum subscriber guarantees, a memorandum of understanding allows the studios to supply to such rival operators as Rupert Murdoch and Kerry Packer's Foxtel if Foxtel in turn agrees to provide its Universal, Fox, Paramount and Sony movies to Optus.

At present, Optus' profit-crushing deals are thought to cost the cabler $6.60 per sub each month on minimum subscriber guarantees of 750,000, which was due to rise to 900,000 in July.

For six months, Optus has been negotiating to get that down to a more realistic level of about 400,000 subs at $4.75 a month, given that after two years of inert marketing and boardroom battles its subscriber levels are only about 220,000, trailing Foxtel (430,000) and rural paybox Austar (325,000), which last year inked non-exclusive movie deals with all studios.

Last year, Foxtel inked new supply deals to slash its movie expenses and then in January, the three remaining cablers agreed on a cost-saving deal to share satellite delivery infrastructure.

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Date:Jun 21, 1999
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