The might of the multiplex

Consortia fighting for digital terrestrial TV multiplexes will overshadow those that won ITV licences. Can such big players unite to sell the concept?

Is the term “multiplex” going to catch on? Somehow it doesn’t have the ring of the words “channel” or “station” – yet in the age of digital TV, the multiplex operator will be king.

That at least is the first impression created by the Government’s policy document on Digital Terrestrial Broadcasting. It is the six TV multiplexes – not the individual channels – that will be licensed by the Independent Television Commission and competed for by consortia of interested companies.

And what consortia. The groupings that came together to bid for Channel 3 and Channel 5 licences will be small and simple compared to the multiplex gangs. A more relevant model may be the National Lottery, which united companies from widely different arenas – computers, telecommunications, security and marketing – to bid for the contract. Now, within days of the digital TV blueprint, broadcasters, transmitter companies, telecommunications groups and electronics manufacturers are sidling up to each other and saying “Wanna be in my gang?”

For it is the combination of programmes, transmission techniques and black boxes that will win the licences, coupled with an ability to convince the public that it will be worth paying 350 to 500 – plus subscriptions – to receive digital terrestrial TV. Advertising agencies may well have a part to play – as they did in the Lottery bids – for the selling of digital is going to be crucial.

Refreshingly, the ITC will have total discretion in awarding the licences, unlike those for Channel 3 and Channel 5, where the cheque book was the ultimate decider. Money will still be crucial – but the amount spent trying to establish digital TV in the market, not the bung to the Treasury.

Having said that, it will be a rather peculiar contest – since five of the first 18 channels have been reserved for the five terrestrial channels. On the face of it, any multiplex bidder that manages to get BBC1, BBC2, ITV, Channel 4 or Channel 5 on its team is guaranteed success. Since that seems too simple, we must assume a certain amount of marriage-broking will be done by the commission.

Will all the five existing channels be grouped on the same multiplexes, say numbers one and two, which will reach 90 per cent of the UK population? That seems to be the plan; if viewers are going to be induced to switch from analogue to digital by the widescreen pictures and CD sound, they will want these enhancements on their favourite channels, not just new ones. The policy document says existing channels must be free to viewers.

But who will be the multiplex operators for these favoured channels? It seems anyone can apply for a multiplex licence except for the BBC – although the corporation is examining the small print, since it would like a multiplex of its own. ITV would also like a whole multiplex – as it made clear in its influential paper to the Government, which demonstrated persuasively why it was important for digital operators to be granted a whole multiplex and not just individual channels.

Only in this way, ITV argued, could the flexibility of digital TV be fully used. Each multiplex contains 18 Megabits, enough either for three channels of widescreen, fast-moving sports action, or perhaps six or seven channels of studio-based discussion. If the multiplex is operated properly, it will be possible to vary the number of channels, hour by hour, as needed. In peaktime, one might have fewer channels, providing high-quality pictures and sound for films, sport, concerts or wildlife programmes, which would benefit from the digital enhancement. At other times, ITV suggested, they could provide perhaps seven local news services.

The Government hasn’t bought ITV’s whole argument. ITV wanted each of the terrestrial broadcasters to get a whole multiplex, so they could control their output and have plenty of room for new services, such as an ITV2 or a sports channel, or in the case of the BBC, perhaps a 24-hour news channel. Instead they have been guaranteed a single six-Megabit channel each (enough for widescreen pictures and CD sound) and invited to bid for others, under the auspices of a multiplex operator.

Will ITV bid for a multiplex as a consortium, or will it find itself split, with perhaps Carlton and Granada each wanting a multiplex of its own? In the latter case, which one would put the ITV channel in its licence application – with its guarantee of acceptance by the commission?

Will ITV, Channel 4 and Channel 5 – the three existing commercial terrestrial channels – be encouraged to go for a joint multiplex? If so, as competing commercial channels, how could they possibly agree on the way the frequencies should be split? Similarly, could the BBC and ITV co-exist on a multiplex? Who would decide when to sacrifice the magnificence of the wide screen and surround-sound for a greater choice of talking heads? And who would be the multiplex operator in these cases?

Reports at the weekend suggested many of the likely players – the BBC, ITV, Channel 4, Sony, BT and NTL, which runs the transmitters for commercial TV – were forming a grand alliance to challenge BSkyB’s plans for 500 digital satellite stations. Yet no one multiplex operator can have more than two or three of the six licences. In the case of the grand alliance, who would the operator be – and how would it resolve the commercial conflicts between its partners?

Such an alliance is right in principle. However competitive the battle to win one of the six multiplex licences, as soon as the winners have been named they must start working together as a single entity, to promote the concept of digital terrestrial TV and a single decoder box. In brand terms, the ITV companies had to do something similar when they won their licences – the difference here is that the winners could include competing manufacturers with differing technological standards.

Ultimately, the viewer need never know who the multiplex operators are – since the multiplex is not the brand. It is the channels and the “idea” of digital terrestrial TV that need to be sold, just as BSkyB sells a multichannel package without telling viewers which bit of the Astra satellites they come from.

If the industry wants to learn how not to do it, look at cable. That should have been sold as a single concept, offering lots of new channels. Instead, we have Nynex and Videotron and Bell and all the others, each with different technologies, channels and pricing structures, adding up to less than the sum of their parts.

It’s going to be hard enough to sell 18 channels of digital terrestrial TV in the face of satellite’s 500, without the multiplex operators squabbling among themselves.

Torin Douglas is BBC Radio’s media correspondent.

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