On 1 April 1996, Kirch started testing twelve digital satellite channels, at a time when several companies were interested in starting a digital satellite operation. These channels were the basis for DF1 and were expected to have as many as five million subscribers within a decade.[1] Coinciding with the signal tests, a pilot service started for 100 households.[2]
DF1 employed its own set-top box known as d-box. Deutsche Telekom employed the SECA system for its digital cable network, which meant that DF1's channels were incompatible with the encryption method used by the cable company. The TF1 Group also showed interest in using the d-box STB.[3] Telekom was accused of blocking a competing service, disabling it from having Kirch's channels on cable.[4]
On 11 June, Kirch revealed details of the DF1 service, as well as its marketing and programming strategies, eyeing for a potential early July launch.[5] It was also in discussions with content providers to launch an interactive games service.[6] In early July, it formed a partnership with BSkyB, after the British partner was dissatisfied with Bertelsmann, which turned out to be one of Telekom's partners.[7] An agreement with TimeWarner was announced days ahead of launching, enabling its movie channels to air Warner Bros. titles.[8]
DF1 started full broadcasts on 28 July 1996, a Sunday, with its key selling point being the multi-camera set-up of the Formula One race held that day, one of its interactive television services.[9] After launch, it signed deals with MCA for Universal titles, while RTL (Bertelsmann) was also snatching titles to 200 titles from the company. Both companies received the highest bids so far at the time.[10]
In a strategic about face for the network, Canal+ announced that it would launch several of its channels on DF1.[11] During its first month, authorities viewed DF1 as some sort of "distribution cartel"[12] On 29 August, it inked an exclusive 10-year deal with The Walt Disney Company worth US$1.3 billion, which would also lead to the launch of a localized Disney Channel.[13] It then threatened to cut the supply of movies to the Premiere network after accusing the competing network to air Forrest Gump as an exclusive, when, in reality, DF1's channels also aired it.[14]
This eventually led to a planned ban on DF1 subscriptions outside of the state of Bavaria, where Kirch Media was headquartered.[15] The ban was lifted later in February 1997.[16] On 7 March, BSkyB left DF1, causing Kirch to continue managing the service alone.[17] In order to try boosting its penetration, it signed deals with Bertelsmann and Deutsche Telekom for a potential source of revenue.[18] It was eyeing a merger with Bertelsmann's interests,[19] a move which Universal Pictures criticized and lodged a complaint to the European Commission to prevent it.[20] On 27 May 1998, the EC banned the planned merger, this time between DF1 and Deutsche Telekom. The rejected plan involved the conversion of Premiere into a digital pay-TV platform.[21] The Kirch Group announced on 1 July that DF1 would continue operation; at the time, it had 160,000 subscribers.[22]
After the rejection of the merger, both Bertelsmann/CLT-UFA (37,5%) and Kirch (25%) agreed to raise their stakes in Premiere. Canal+ owned the remaining 37,5% but agreed to sell.[23]
