Is the future of digital interactive TV really bright? Alasdair Reid asks if the crisis within Kirch's media empire in Germany offers lessons for media owners within the UK digital TV market. (Forum).

At first glance, Leo Kirch and Rupert Murdoch seem poles apart. Kirch is Bavarian to his bootstraps and the cosmopolitan Murdoch (an Australian-American of Scottish descent, with a Chinese wife) is active on just about every continent on the planet. He's even a bit of a player in Germany and, famously, has more than a bit part in the troubles engulfing the Kirch empire -- Murdoch's decision to call in commitments on his Kirch holdings played a significant part in triggering the crisis in the first place.

However, the two media moguls have more in common than you'd think. They are both advanced enough in years to qualify for free public transport and both have stacked up enough power, longevity and gravitas to qualify as grand old men of media. Also, political establishments regard them with fear and distrust in equal measure.

They are both iconoclasts, having played lead roles in blowing away the old order in their respective markets, and both can claim to be visionaries, believing not just in pay-TV but in digital interactive TV being able to access multiple revenue streams. Both had dangerously brave investment strategies, paying huge amounts to secure premium programming, notably feature films and sporting rights.

But, in Kirch's case, it looks as if the gamble has been lost. The question is, what lessons can we learn from Kirch's recent troubles? In particular, should we re-examine the prospects for digital TV, not just in Germany, but in other markets? For instance, there was also news last week that the main Spanish digital platform was also in trouble. Is the malaise infectious?

One very interested observer is Michael Winkler, the European media director of the Gillette Group. He's not at all surprised that digital has struggled in Germany. In fact, he says, the only surprising thing really is that there was so much optimism in the first place.

The thing about the German market is that it has been so heavily cabled for so long. For a fairly cheap subscription package you can receive more than 30 channels and historically there's been so much competition on this lower tier that it offers stuff that, in other markets, you might expect to see on pay-per-view or higher subscription tiers.

For instance, the Sky Premier films touted as "first UK screening" will be appearing at almost the same time on mainstream cable channels in Germany." In Germany, the advertising market is relatively unregulated so they have more opportunities to invest in good programming which in turn means pay-TV has less scope. RTL, for instance, invested a lot of money to get Titanic first," Winkler states.