Digital TV to herald the end of BBC licence fee

The BBC’s licence fee will disappear when digital TV arrives in the UK, predicts David Elstein, BSkyB’s director of programmes.

Speaking at a TV industry conference last week Elstein said the encryption technology of digital TV would make cutting off viewers possible so the fee wouldn’t be needed.

“Pay TV is the logical outcome of digital TV. Once you can disconnect defaulters there is no place for a compulsory tax for services that people may not want.”

Later the conference was told by Paul Styles, head of media consulting at KPMG, that 1 million households, or seven per cent of the UK, will have digital TV by 2001.

Elstein told the conference that the key issue for digital take-up is the subsidy manufacturers are willing to put on digital set-top decoders to get the price as low as possible. Digital decoders are currently expected to retail at about 500.

Styles also predicted that cable and satellite TV would be in 38 per cent of homes by 2001. It is currently in 21 per cent. He said the growth in cable and satellite, Channel 5 and digital would reduce ITV’s ad revenues by one to four per cent over the next five years.

PACT, the television producer’s association, called at the conference for a forum to be set up where advertisers and agencies interested in funding programme makers directly can meet up with TV production companies.

However, LWT managing director Steve Morrison warned that it was for broadcasters to talk to advertisers as only they could guarantee a programme would be broadcast, scheduled and promoted.

The fragmentation of TV audiences caused by cable and satellite, Channel 5 and digital TV will make media planning so complex that agencies will need to charge clients for work beyond simple buying, the conference was told.

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