The crisis-ridden KirchGroup's pay TV unit KirchPayTV has been forced to file for insolvency a month after the KirchMedia holding company filed for insolvency and self-administration.

The pay-TV unit and several of its subsidiaries opened insolvency proceedings in a Munich court today (Wednesday May 8). Kirch Marketing Services was expected to follow suit at a Hamburg court later in the day.

Georg Kofler, CEO of the Premiere pay-TV platform, stressed, "the broadcasting operations of Premuere are not jeopardised. We are continuing to offer our subscribers the programmes as they are indicated in our listings magazine".

Kofler said that Premiere's management had "tried in the past weeks to use even the smallest chance for a continuation of business in the present constellation", but now "received the unique chance with the filing of insolvency for KirchPayTV and the other companies to cast off the ballast of the past and place Premiere on a healthy footing".

He added that Premiere would present potential investors with a new business plan by the first half of June. This could reduce the pay-TV platform's annual costs by more than Euros 500m.

"We must adapt with new realism to the prospects of the media market", Kofler declared. 'In the past, Premiere paid prices which did not bear any rational relationship to the attainable revenues".

Premiere is expected to reduce its workforce from 2,400 to 1,800 by the end of June and to 1,400 by the end of the year.

According to Premiere, the platform's churn rate (of customers cancelling their subscriptions) had fallen from an average 23% in the first half of 2001 to probably under 17% in the first few months of this year.

The pay-TV service had added around 7,000 new subscribers in the first five days of May following the launch of the new introductory package Premiere Start on May 1 for Euros 5 per month: one third had subscribed to Premiere Start, with the other two thirds choosing more expensive packages running for at least 12 months.