You have to feel a bit sorry for the Independent Television Commission (ITC). If ever there were a no-win situation, it’s the decision on who should replace ITV Digital. Which bid should it choose? The one from within the commercial TV family – from ITV and Channel 4? Or the one from the old enemy, the BBC (in tandem with the transmission company Crown Castle, and including three channels from BSkyB)?
The decision is crucial because the winner must rescue the entire digital terrestrial TV (DTT) platform, on which rides the Government’s hopes of switching the whole nation to digital TV. And the bids are diametrically opposed – the BBC says the platform must be free-to-view, while ITV and Channel 4 say there must be pay-channels (to be supplied by a third bidder, headed by former Sky executive David Chance). The two other bids, rightly or wrongly, are widely seen as non-starters.
So which bid should it be?
Here I must underline the declaration of interest which appears at the bottom of this column. I am a BBC employee, but that is not the reason I believe the BBC solution is the right one. Indeed, I remained loyal to the concept put forward by ONdigital and ITV Digital long after wiser heads might have presumed they were doomed.
I now see that my belief in the ONdigital-ITV Digital strategy was rooted in the platform rather than the company. I believed it would succeed because DTT could not be allowed to fail if the Government were to achieve digital switch-over. Cable will never cover the whole country and satellite dishes are banned from many houses and flats. Only by combining cable, satellite and DTT – digital TV through an aerial – can the whole country go digital.
Yet now DTT is on the verge of failure, brought down by poor technology (many viewers couldn’t get a picture), a high cost-base (the Nationwide League deal was the last straw), a platform war imposed by competition regulators (who forced BSkyB out of the DTT consortium), and – above all – consumer confusion.
That is why DTT needs the totally fresh start offered by the BBC. Leave aside the massive PR problem of handing the licences back to the ITV companies that made a mess of DTT in the first place (and the determination of Football League clubs to wreak revenge, which has seen them urging viewers to boycott ITV’s football coverage).
The key to the BBC bid is the simplicity and single-mindedness of its consumer proposition. It would be branded “Freeview” television – 24 free channels instead of five, for the price of a digital adapter or set-top box (plus up to 16 radio channels and extra interactive services). In this way, the platform could appeal to the millions of viewers who are firmly opposed to pay-TV or are simply confused.
The channels would include: the five main terrestrial channels; existing digital channels such as BBC4, ITV2, News 24 and Cbeebies; several channels new to DTT, such as CNN, Boomerang, the film channel TCM, Sky News and Sky Sports News; and some totally new ones such as UK History. Fewer than half the channels would come from the BBC and Sky.
ITV, Channel 4 and Chance’s “Freeview Plus” group are offering similar channels, including a new one called ITV Extra, plus a few pay-channels such as E4 and FilmFour. They say their research – and the BBC’s – shows that most viewers would like “a little bit of pay-TV” as well as free channels, and they claim the Government favours this too.
They point out that E4 and FilmFour would be great assets for the platform. Chance and his business partner Ian West are a class act, responsible for much of BSkyB’s success, and their low-cost pay-TV operation can break even with only a few hundred thousand subscribers.
I too like the idea of one day being able to upgrade DTT to include some pay-channels. I supported the strategy when ONdigital offered a mix of free and pay-channels. But that was then and this is now and, for the moment, pay-channels are a luxury the platform cannot afford.
ITV Digital failed catastrophically, damaging the ITV brand and creating huge ill-will among the football clubs – many of which have yet to suffer the full consequences of Carlton and Granada’s withdrawal. DTT needs a clear break with the past.
The BBC’s rivals insist that neither the BBC nor Sky is being altruistic in pressing for free DTT. They say the BBC’s motive is to ensure the terrestrial platform has no subscription system that could become an alternative to the licence fee. They say Sky simply wants to stymie any rival pay-TV system and to give terrestrial viewers a chance to sample its output. They claim both organisations are monopolists, determined to keep out rival channels, and question why consumers would want so many news channels.
Even if all this were true (and some of the arguments have greater force than others), I believe the BBC’s strategy would be the right one. It cuts through the baggage and confusion of the past and offers a new, clear proposition, keeping alive the Government’s hopes of digital switch-over. The BBC has also promised to support the fresh start with heavy marketing, promoting all the channels, not just its own.
I can’t quite visualise the alternative campaign: “From those wonderful people who brought you ITV Digital…”?
Torin Douglas is media correspondent for BBC News