Traditional tv channel has a brighter future

They may not realise it yet, but one day the likes of ITV’s Michael Grade and WPP’s Sir Martin Sorrell could end up feeling grateful to Andre Vanyi-Robin and Giuseppe Flores-D’Arcais.

In case you are not aware of Vanyi-Robin and Flores-D’Arcais, the Barcelona-based pair may have found a way of shifting the media balance in favour of terrestrial free-to-air broadcasters while offering advertisers precisely targeted TV ads.

Vanyi-Robin, who has an IT background, and Flores-D’Arcais, a lawyer, were involved in Digital Terrestrial Television (DTT) licences in Spain and started to explore how to get more out of Freeview-style digital terrestrial television. After all, with most of the developed world moving over to digital in the next five years more than 1 billion homes will soon be upgrading their TV receiving equipment and in the market for new television offerings.

What they have come up with is a software system that appears to get round the limited capacity on DTT and makes it much easier to offer video-on-demand, catch-up TV such as the iPlayer, high definition and targeted advertising.

The BESTv system uses the existing broadcast signal to continuously download movies, programmes and ads to the hard disc of a DTT box. It is downloaded in the form of data packages, rather like Teletext, and therefore does not affect the channel capacity of the DTT system.

The development allows traditional broadcasters to extend their reach by offering on-demand programmes or pay-TV. With no subscription required, they could compete on cost at the lower end of the market with the likes of Sky, BT or Virgin Media.

Of course people are always coming out of garages with new ideas that either fade away or are absorbed by the mainstream. But this is not pie-in-the-sky. A limited trial to 2,000 homes has been running in Barcelona for some time and last week Silvio Berlusconi’s Mediaset combined with Italian national broadcaster RAI to launch a national digital terrestrial pay-TV service.

The service, which uses BESTv software, is designed to counter the growing power of Rupert Murdoch’s Sky Italia and is aimed at those viewers unwilling or unable to pay large TV subscription packages.

Before long there should be hard evidence from Italy on whether pay-TV packages on DTT are going to take off or not. But if it does, it is claimed that over time the marketing budget for the new Italian service could be as high as €1bn (£895m).

AIM-listed British company Motive Television has worldwide distribution rights for the technology – apart from Spain and Italy – and chief executive Len Fertig says he now plans to target the UK market.

The UK may be a very different market to that of Italy, but the high penetration of DTT would suggest that there is at least the potential for further services beyond Top-up TV. And Fertig, who launched the Nova commercial television channel in the Czech Republic, claims any broadcaster can extend their DTT offering for little more than the cost of a £200,000 server.

He also points out that the system enables appropriate ads to be downloaded with particular genres of programming. As a result, it could give a leg up for smaller, specialist broadcasters like S4C or even GMTV. S4C could draw on its library of Welsh language programmes and GMTV would be able to make its style of programmes easily available outside its limited broadcast hours.

But like Italy, it is difficult to say whether it will it take off in the UK. The history of subscription DTT in this country is colourful to say the least – the embarrassing £1bn failure of ITV Digital cleared the way for the spectacular success of Freeview. With the benefit of hindsight the mistakes made by ITV Digital were all too obvious – vastly over-paying for second-tier sports rights and trying to go head-to-head with Sky.

But things have moved on and something more gentle and economical that goes under the radar, but provides a new modest stream of revenue to replace some of the cash lost to the internet, might just make it.

Perhaps it is time to start thinking about the next stage of Freeview and one that can add iPlayer, VoD and HD+ targeted ads without the need for a broadband subscription. Vanyi-Robin and Flores-D’Arcais might have helped to sustain the future of the traditional television channel.

9th Annual Brands Summit 2010

Attend Marketing Week’s 9th Annual Brands Summit to find out how to best invest in your brand to capitalise on the opportunities arising from a market rebound. Throughout the economic turbulence of the past year, your customers’ perceptions and behaviours have inevitably changed.

Hear what leading brands such as Nokia, Asda, Britvic, American Express, Flybe, npower, Harley-Davidson and Barclaycard are doing to deliver on changed consumer expectations. Find out how they are increasing profits by maximising the success of their customer engagement and brand awareness campaigns. The Brand Summit takes place on the 23 and 24 February 2010 at the Millennium

Knightsbridge in London. For further details, call 020 7970 4770 or visit www.brandsummit.com