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Cyprus

The TV channel that showed others how it’s done

Lumiere Television (LTV), the first cable provider in Cyprus has closed after more than 20 years

By Angelos Anastasiou

THE STORY of Lumiere TV (LTV) borders on the mythical, from its inception and meteoric rise right down to its eventual demise over a period of two decades. Cyprus’ first pay-TV channel that generations of Cypriots grew up on, once enjoyed imperial status among content providers, overwhelmingly dominating the airwaves for much of the ‘90s and ‘00s, but suffered devastating convulsions over the years – in part due to its own complacency and infighting.

Back in 1989, it started out as a production company for movies and television advertisements. From there, it evolved from the equivalent of most Eureka moments – it seemed insane, but the more its five founders-to-be fleshed it out on paper, the genius of its simplicity became increasingly obvious. Still, they had a hard time convincing financiers.

“I will never forget when, before we founded LTV, the banks made fun of us,” LTV co-founder Yiorgos Xinaris narrated earlier this year. “The first thing a banker told us when we asked for a loan was ‘Who is going to pay for TV, are you nuts? We get the CyBC for free!’”

Other bankers were more open-minded, and the aspiring media men were finally able to make their dream come true.

LTV caught Cyprus by storm and, by virtue of competition, elevated television content to heights never before imagined by any of the traditional open channels. For a mere £8 monthly subscription, it offered brand-new movies and TV shows, making a mockery of the aging content offered by its free rivals.

“Though the company itself has basically gone bankrupt, LTV’s business model has absolutely not failed,” one insider told the Sunday Mail. “When it started out, the pay-TV model was considered suicide. But we all know how it turned out.”

At a time when even cinemas had breaks in the middle of movies and free-to-air channels routinely loaded movie breaks with ridiculous numbers of ridiculously annoying commercials, LTV offered uninterrupted content, with a conspicuously modest number of ads placed between broadcast items – not during them. It also introduced adult films in its late-night slot, hurling a giant rock in the still waters of the embarrassingly prude Cypriot ethos.

More than a premium-quality TV channel, it fostered a culture of respect for viewers and even catalysed cultural changes – water-cooler discussions moved away from the CyBC’s latest tired skit offering cheap satire of Cypriot societal backwardness to first-world themes and controversies.

But what truly catapulted LTV into the stratosphere was its sports content. It was quick to acquire the rights to the Cyprus football league, as well as several international ones, including the then-budding and now-dominant English Premier League. Instead of attempting to corner the existing market, LTV created its own market where it thrived unopposed.

By the middle of the ‘00s, competitors realised the market’s huge economic potential and rival pay-TV providers began to spring up. Instead of trying to offer alternative options, some employed a strategy aimed at chipping away at LTV’s content, bit by bit. In 2004, semi-state Cyprus Telecommunications Authority launched MiVision – today’s Cytavision – in an effort to beat LTV at its own game by offering a ‘triple-play’ package: telephony, internet and television. In 2006, the dissolution of LTV’s exclusive deal with Dutch NETHOLD, which had produced the Nova Cyprus platform that carried LTV’s channels, did not just mean LTV had to go its own way in managing its subscriber base – it also meant much of its previously exclusive content, which enhanced its own programming of local productions, would now be available through Nova Cyprus, now a rival provider.

“Cytavision played a critical role in the story,” a Sunday Mail source said on condition of anonymity. “It seems fairly obvious to any observer that its goal has been to stifle competition through basically unlimited resources, which no other pay-TV provider could possibly match.”

A consistently loss-making enterprise, Cytavision has been an increasingly controversial project. Latest figures indicate the platform has recorded annual losses running in the tens of millions over each of the last four years, yet shows no signs of slowing down. Its loss-making operation is lost in the consolidated financials of the semi-state giant telecoms company, which effectively subsidised Cytavision’s uneconomical deals through profits from the rest of its operations. Cytavision ended up acquiring what had been left of LTV – its sports content – but not before it had driven competition into the ground by going after any item of programming that showed any promise of attracting subscribers.

Increased demand for TV content soon translated to prices shooting up. In order to remain competitive, LTV had to pay more for its programming, and it did. But at the same time the subscriber base became increasingly fragmented, and monthly subscriptions across the board were also hiked to help pay for pricier content.

As well, content fragmentation meant that viewers who wished to watch, say, all of the Cypriot league games, would need to subscribe to two or three providers at various points in time, a venture that would require a monthly subscription well north of €150.

What had once been LTV’s exclusive realm soon became the object a savage war of attrition, where competitors would fall one by one and the last man standing would be declared the victor – and, most importantly, reap the spoils. In such terrain and with a virtually unlimited war chest, Cytavision was never going to lose – it was just a matter of time.

To boot, as if a competitor who threw money at every problem was not enough of a problem, LTV’s management decided to focus on peripheral issues like piracy. Time and again in recent years, one company official after the other got cause-and-effect backwards and lashed out at the ever-popular Dreambox, a device used in illegally mass-delivering a single unscrambled cable signal via internet connections for a meagre monthly subscription as low as €10. Despite its illegality, an estimated 40 per cent of Cypriot viewers opted for this method in 2010.

“I am being clear,” LTV co-founder and chairman Joseph Avraamides told an interviewer in 2009. “We will move legally against all, whoever they may be, if this [piracy] situation continues.”

While an economist might describe the popularity of this illegal method as a perfectly rational response to subscription hikes that were not the result of content enhancement but market fragmentation, LTV failed to get the message and fought the war on a different front – it tried to suppress the use of the Dreambox by virtue of its illegality, without addressing the underlying cause of its stellar rise.

In an interview shortly after departing from LTV earlier this year, Xinaris defended the strategy and blamed law enforcement for not doing enough to curb the problem.

“I have been greatly disappointed by the fact that television in Cyprus has not been protected,” he said. “Piracy was allowed to destroy a promising industry. It’s all very disheartening.”

In an attempt to strike back at Cytavision, in 2010 LTV joined forces with telephony and internet provider Cablenet to match the semi-state’s ‘triple-play’ offering. But it was to prove too little, too late. Even after it was finally able to largely rid itself of piracy in 2011 with the introduction of digital television signal in Cyprus, LTV’s fortunes didn’t change. A reported 60,000-strong subscriber base at the turn of the decade had withered to some 8,000 by its final days in mid-2014.

In July, Cytavision announced the purchase of LTV’s remaining sports content for an undisclosed sum, including the home matches of Cypriot powerhouse APOEL, the rights to the Premier League and Bundesliga, and NBA games, and the launch of three additional sports channels to accommodate it. With that, the TV channel that showed TV channels how it’s done was no more.

“The reason was unfair competition,” the LTV insider insisted. “Cytavision basically acquired the TV-rights to most of Cyprus’ football clubs at prices which the market can’t possibly sustain. And it could afford to do that because it has access to a basically bottomless money-pit. It wanted to kill the competition by blocking them with walls of money – and it did.”

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