Will BSkyB’s new online service be Open sesame for digital TV?

ONdigital and ITV2 can no longer depend on exclusive sports coverage to attract subscribers. Will digital online be their saving grace?

Sir John Birt’s fears of a nation divided by the digital revolution might seem to be some way from fruition, if reports of the latest Mintel survey of attitudes to digital television are to be believed. It shows that two-thirds of people still show no interest in getting a digital service.

Yet like many such surveys, much depends on how you look at it. If the one-third of all householders who are interested went out tomorrow to subscribe to digital TV, they’d be out of luck – the 8 million boxes that would be needed are not in the shops.

The Mintel report suggests that 2 million homes will have installed digital television by the end of the year – which most observers would count as a pretty significant breakthrough, even if it is achieved by giving away set-top boxes worth over &£300 each.

Last week, ONdigital announced it had already signed up 250,000 customers, while SkyDigital is reported to have reached a million – and that’s in the summer, a low time of the year for electrical goods sales, and before the marketing push this autumn.

From September, ONdigital will be making great play of its exclusive sports events, as will ITV2, which at present is restricted to ONdigital and some cable systems (because ITV refuses to put its channels on SkyDigital). ONdigital will have exclusive live coverage of several UEFA Champions League matches, and ITV2 will have exclusive live coverage of almost half the Rugby World Cup games. Both are working in partnership with ITV, which will cover the top matches from the tournaments but cannot fit every game onto a single channel.

The two tournaments have an additional value, since they will help sell ONdigital and ITV2 to the advertising and marketing community, famed for its obsession with sport. Last week’s exclusive coverage of the Party in the Park pop concert may have won ITV2 its highest audience to date, but that was a one-off. The Rugby World Cup will be the first sustained event for which many ad people – and viewers generally – might want to ensure they can receive the channel.

Are ONdigital and ITV2 contributing to Birt’s “divided nation” by signing up such events? The BBC director general suggested in his New Statesman lecture last week that the shared national experience of watching events such as Wimbledon might be lost in an age when every home has dozens of channels, each vying for exclusive pay-TV coverage of such events.

In the short term, ONdigital and ITV2 will indeed divide the nation – just as Sky has done in recent years by signing up sports events exclusively. And arguably, their action will be more divisive than Sky’s.

For until now, ardent sports fans could be reasonably sure that if they signed up with Sky (on top of the terrestrial channels) they would have access to every sports event televised in the UK (even if, in many cases, they had to pay either a subscription or pay-per-view fee to watch it.)

Now, however, they will need two set-top boxes to get full sports coverage. ONdigital does not yet offer all the Sky Sports channels and SkyDigital does not cover the UEFA Champions League or the Rugby World Cup.

Few would claim that the UEFA Champions League qualifiers or the Rugby World Cup “B” matches are the stuff which brings the whole nation together. But Carlton and Granada, which own ONdigital and effectively control ITV and ITV2, will want to snatch other sports events away from Sky.

No doubt they will put in some sort of bid for the next rights to the Carling Premier League. If the Premiership negotiators carry out their promise to divide the rights between several broadcasters, the need for viewers to acquire more than one digital service to get all the available sports coverage may become even stronger.

But, as might be expected, Birt’s lecture dwelt more on the benefits of the digital revolution than the threats – and as much on its online potential as its broadcasting possibilities. He called it a “digitopia” and hailed the way that the global information available on-line would enhance the television output and vice versa.

ONdigital, after a slow start, is now embracing the online possibilities of the digital revolution. It’s making its boxes and subscriptions available to customers on its Website, and promising to launch e-mail for its subscribers this autumn.

Not a moment too soon, for that’s when the long-promised interactive services are due to be launched by Sky and the cable companies. Cable’s CWC and NTL (now tipped to merge before the predicted megamerger with Telewest takes effect) have both been testing their interactive services in homes around the UK.

NTL has a queue of retailers, news organisations and other content providers waiting to get onto its service, which is already available in almost 10,000 homes. When its digital cable service launches this autumn, it will be building on that experience.

But the big interactive arrival this autumn will be the long-awaited launch of Open, BSkyB’s digital shopping, banking and entertainment service. As yet, though, SkyDigital subscribers still await the exclusive preview of the service.

Given that BSkyB’s new chairman, Rupert Murdoch, has now put aside his scepticism about the Internet and is predicting that News Corp’s stock value will one day be mostly “Internet related”, Open will find itself under even closer scrutiny this autumn. How far – and fast – it will boost the take-up of digital TV remains to be seen.

Torin Douglas is media correspondent for BBC News

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