As expected, the main bidders for Digital Terrestrial broadcast licences are a
consortium of the BBC and Crown Castle, battling against Carlton, Granada
and Channel 4 as the ITV consortium.The decision of Carlton and Granada to bid again, and to do so under the banner
of ITV is unbelievable. In their hands, ON Digital, renamed as ITV Digital,
collapsed in a heap, leaving investors, subscribers and creditors out of money
and deeply unhappy.
Although Carlton and Granada, this time with Channel 4 in tow, may think they
can turn their previous fiasco around, starting with a clean sheet, I suspect
that they won't have many takers in the public arena; ITV Digital's reputation
proceeds it, and once bitten, twice shy, may prove to a prophetic adage.
Commercial concerns must also weigh heavily against their bid, and it will not
just be the Independent Television Commission's thoughts that may stand in the
way. ITV Digital reneged on their football rights deal, leaving the Football
League out of pocket, and clubs facing bankruptcy.
Carlton and Granada distanced themselves from the original ITV Digital mess,
saying that they did not offer any parent company guarantees, so tough luck,
you're on your own, and we're not bailing you out. It is unlikely that those
dealing with a new ITV Digital will put themselves in that position again,
and Carlton and Granada will not be able to protect themselves quite so easily
in the future.
It is ironic that when Digital Terrestrial Television first kicked off, it was
a consortium of Carlton, Granada and Sky that siezed the floor but now it is
the BBC and Crown Castle who have co-opted Sky as a partner.
The original Carlton, Granada and Sky consortium was demolished when it was
ruled that Sky's involvement would create a monopoly, which ultimately left
Carlton and Granada high and dry, having to go it alone, with its fateful
outcome so many predicted.
The BBC consortium is being much more cautious. Focusing on being a Free-To-Air,
non-profit making service provider, which happens to carry three Sky channels,
also free to view, the BBC is presenting itself as the system of choice between
the existing analogue system and satellite TV.
The BBC are desperate to have some solution in place which saves them from being
just another couple of channels on Murdoch's satellites when analogue broadcasts
are axed in 2010. The BBC does not have the finance, commercial revenue nor
government backing to put its own competing satellites in orbit, and digital
through the aerial is its only chance to keep anything which resembles its own
transmission infrastructure.
At first glance, the BBC's embracing of Sky looks strange, the world leader in
free public broadcasting holding hands with the world leader of commercial,
subscription, and pay-to-view television, but it is not all that it seems.
The BBC claim that their proposals offer an option for viewers which is clear
and distinct from satellite, and will offer the best of BBC output and of
Sky's. In the BBC's view, the best of Sky's output is Sky News, Sky Sports News
and Sky Travel.
It's hardly classed as the best from Sky if you were to ask the viewers,
although the BBC have indicated that they may also carry Sky One later, and
may not be adverse to having their own pay-to-view programming in the future.
The bid at the moment is specifically for the Free-To-Air format, no matter
what the future holds.
The BBC's proposal is therefore nothing more than a souped-up version of what
current analogue television offers; the usual terrestrial channels, BBC
output which is currently carried by Sky only ( including BBC Four, BBC Choice
and BBC News 24 ) plus a smattering of Sky's own output, and a few other
channels to bring the total up to 24.
Sky won't be particularly unhappy with that, as it will remain the dominant
provider of digital television services in the UK, and has stolen a strong lead
and captured much of the collapsed ITV Digital market share. It will also have
a foothold in the terrestrial digital market and well positioned to influence
its future, if it has one at all. As Murdoch and Blair appear to be such good
friends, it is unlikely that Murdoch will face much criticism for his
involvement this time round, and if he does, Blair can always write a letter of
support for Sky, that fine British company, as he did for his good friend
Mittal.
The question is not really which bidder wins which licences, and there are
three licences which could be allocated singularly or as a whole, but whether
the viewing public will take up the option of Digital Terrestrial Television.
The problems which existed with ITV Digital still remain; limited numbers
of channels, poor signal reception, and the need to purchase a set-top box.
The original model of ON Digital - buy a box, take it home, plug it in and
watch TV - was far short of the mark. The cost of set-top boxes was close to
two hundred GBP initially, being given away only after Sky had already hit
the market with that ploy. The service required a subscription, and it was
more than likely that additional money needed to be spent on upgrading the
TV aerial, as many were simply incapable when it came to digital transmission.
The BBC proposal improves on this a little; all channels will be Free-To-Air
so there will be no subscription, just the cost of the receiver and whatever
upgrades needs to be done to the aerial to get the signal into it. The
reduction from 36 channels to 24 may improve received signal quality, but
that remains to be seen. Observers have reported that recent BBC experiments
with digital transmission have shown that they seem quite happy to let their
transmission quality drop to keep bandwidth down, which is a worrying sign for
the future.
But will viewers want to splash out a hundred GBP or so on a Set-Top Box ? By
2010, when the analogue service is shut down, they might not have much choice,
unless they opt to go with satellite.
Sky has the commercial advantage over the BBC when it comes to their belated
arrival in the digital battle arena. Sky's decision to give away its receivers
and rely on subscriptions only hit ON Digital hard, costing them almost 200
million GBP, and probably also took potential customers away. There is no
reason to think that they won't use such 'dirty tricks' again in order to pull
in more subscribers.
The BBC's argument for Terrestrial Digital Television is that it gives viewers
a choice to satellite and offers something which Sky doesn't; quality
programming with zero subscription costs. The reality is not quite so clear cut.
Sky also offer a subscription-free service, requiring only the necessary
receiving system and a viewing card freely obtained from the BBC to
watch the traditional analogue programme material. The
ITC indicates that the following channels
in addition to BBC1, BBC2, ITV1, Channel 4 / S4C Digital, and Channel 5 are
available without subscription -
BBC Choice,
BBC Four,
BBC News 24,
BBC Parliament,
Bid-Up TV,
Boomerang,
Channel Health,
CNN,
Community Channel,
Deals Direct,
Einstein.tv,
Game Network,
Ideal World,
Inspiration,
ITN News,
Liberty TV,
Magazine Showcase,
Phoenix One,
Pin24.com,
QVC,
S4C2,
Screenshop,
Shop!,
Shop America,
Sky News,
Travel Channel,
Turner Classic Movies,
TV Jobshop,
TV Travel Shop,
TV Travel Shop 2 and
Whereits.at - correct as of June 2002.
It is hard therefore to see what advantages the BBC proposal offers over Sky,
or why the BBC would even want to bother investing money and effort in keeping
terrestrial TV going, other than to ensure some independence from the
satellite medium.
Those who will ultimately decide the fate of digital broadcasting will be the
viewers. Apart from the die-hards who only watch BBC 2 and disdain almost all
other programme output they don't consider as quality viewing, and those who
are unable or unwilling to get a satellite dish installed, there seems little
reason not to move to Sky which is well established, and has proven itself to
be generally satisfactory.
There is a risk that a Sky only delivery system locks everyone into the world of
Murdoch Vision, and the dangerous world of the monopoly where we will
all have our wallets sucked dry, but it is the government that has a role in
protecting the viewers who require Free-To-Air material, and it is them to who
we must turn, and trust.
If I hadn't already signed up for Sky, having rejected NTL's confusing
and expensive digital packages and ON Digital, which I thought would never fly,
I would probably be choosing Sky over any terrestrial offering, whether it was
the BBC's reasonable, not for profit offering, or otherwise.
Digital Terrestrial Television has failed once, spectacularly, and I can see no
reason that it should succeed in its second incarnation.
Carlton and Granada have crippled themselves financially already, opening
themselves up for take-over by foreign media corporations, have ruined their
reputations, and don't deserve a second chance.
The licences should be handed to one of the new entrants to the market, such as
Apax, and they should be left to get on with it.
The BBC would be better advised to spend its money on maintaining its quality
programming output, and shining as a beacon amidst the less than stunning Sky
choices. If it wants to push its programming through the service offered by the
licence winner then so be it, but it shouldn't throw licence payers money down
the drain by effectively going it alone.
The BBC Wins
Less than a month after the final bids were made, the Independant Television
Commision awarded all the "multiplex licences" to the BBC and Crown Castle
consortium.A completely unsurprising result. ITV ( being Carlton and Granada ), even with
Channel 4, can't be thought of as serious contenders after their last failed
attempt at digital broadcasting, and with them out of the way, only the BBC has
the financial clout to make sure terrestrial television lasts the course.
Success in bidding was a foregone conclusion for the BBC, and is the only one
which keeps everyone happy, both politically, financially and in practical
terms.
No matter what the cost of terrestrial digital, the BBC has a bottomless fund of
cash, courtesy of the licence payer. If times get hard, the BBC have created an
excellent leverage point to squeeze more money out of the public, entirely with
government backing, as all they need to do is blame their increased costs on
digital, and threaten to pull out if they don't get more money. If they pulled
out, it would leave the industry in disarray, and a government facing
considerable embarassment.
As a result of the award, the BBC has guaranteed itself funding, has created
another obstacle to any proposed changes in the way the BBC should be run, and
has secured an independent means of transmission for itself, without having
to rely upon the commercially oriented Sky to carry its programming.
The government is happy because it can now shut down the analogue service in
2010 as it wants to, knowing that everyone will have access to Free To Air
channels, or at least hoping that so few won't that they can ride the storm of
complaints, and Sky are happy because they've got their finger in the pie.
Something they were prohibited from having when ON Digital sprung into life.
I still think it's a waste of licence payers money, but under the circumstances,
it was the most obvious choice that the ITC could go with. Any other decison,
which lead to a repeated failure of service provision in the near future, would
be catastrophic.
So, we seem to have a solution which is entirely satisfactory to everyone,
except ITV, who most people couldn't care less about, and the poor licence fee
payer who will undoubtedly be lumbered with funding a service no one wants,
and having to pay even if they don't use terrestrial digital.
The question is, will the consumer be happy ?
Well apart from the issue of a possible increase in licence fee, the BBC service
is completely Free To Air, so the cost of a Set-Top Box is the only outlay, and
those with ON Digital and ITV Digital boxes will be able to use them as soon as
the new services launches, which is expected to be in Autumn, 2002.
The BBC have confirmed the channels which will be available, although some
decisions on exactly whats on some channels has yet to be decided. So far, the
channels which will be available are to be ...
BBC One, BBC Two, BBC Choice ( to be replaced by BBC Three if approved ),
BBC Four, ITV1, ITV2, Channel 4, Channel 5, S4C ( for the whole of the UK ),
BBC News 24, Sky News, ITN, CNN, Sky Sports News, UK History ( BBC ),
TCM ( Turner Classic Movies ), CBBC and Cbeebies ( BBC children's channels ),
Boomerang ( Cartoon Network children's channel ), BBC Parliament,
S4C2 ( Welsh National Assembly coverage, for whole of the UK ), Sky Travel,
TV Travel Shop, QVC ( shopping channel ) and The Community Channel ( charity
television ).
In addition, there will be BBCi and other interactive services, a general
entertainment channel, Six BBC radio channels ( Radio 1, 2, 3, 4, Five Live
and 6 Music ) plus commercial radio channels.
Notably lacking are dedicated film channels ( other than the rather
pedestrain TCM ), sports channels ( except Radio Five Live ), Sky One, and
the 'specialist' and 'cult' channels currently carried on satellite; Sci-Fi,
all Discovery channels, religious programming, foreign language channels and
the only adult programming is the soft porn which makes up Channel 5's late
night entertainment, and the odd, "It's Art not porn", programming which may
crop up at times on BBC Four.
It's interesting that S4C2 is to bring the excitement of the Welsh National
Assembly to the whole of the UK, whereas the Scottish Parliament gets no
dedicated outlet.
It's a fairly comprehensive offering, but looks disappointing when placed along
side the choice offered by Sky. It is however an undeniably cheaper option to
financing Murdoch's retirement fund, and certainly better than what analogue
currently offers.
Let's just hope that this time, with the changes being approved to make
reception easier, that the customers can actually receive the channels.
