Digitv.com 2 

1 January 2002 tbs.pm/1654

Well, we’ve already seen the first major casualties of the bursting of the digital channels bubble.

U>Direct and .tv from Sky are both high profile casualties in amongst less well known names such as Channel East and Simply Money.

However the number of new channels launching, such as Magic and EuroSportNews, and the rumour mill both show no sign of slowing up, with constant rumours about channels from CNN Money to The Weather Channel thought be launching soon.

Sky Digital

It seems that although the list of casualties is beginning to mount, there are still plenty of channels out there willing to risk zero audiences and little advertising revenue to launch TV and Radio stations that quite possibly no-one will watch or listen to.

Digital TV is considered the new frontier of broadcasting, much like the dot.coms were supposed to be another new frontier that everybody wanted to be part of.

But not everybody can be successful in any new frontier and just as the dot.com bubble burst in 2000 and the aftershocks of it are still being felt today, the digital channels bubble looks set to burst sometime during 2002.

With Sky losing a channel, and U>Direct completely disappearing off the digital map, it doesn’t bode well for all the players in the UK Digital Television market, from BBC and ITV, all the way down to the single-channel bit players.

I can imagine the number of digital channels available to view dropping quite substantially, perhaps even halving, before this is all said and done.

There are also already signs that some areas of the digital TV spectrum of channels are overcrowded, bursting at the seems.

For example, in the minority channels area of the 600s, there are already lots of subscription services from companies like B4U, Star, Zee, ARY Digital, RTV and others, and some free to air ones too.

Believe it or not, more services are being rumoured about to, or indeed are actually, launching on Digital TV.

Now, to my mind, not all of these services could survive, even if the entire Asian community was hooked up to Digital TV.

So, it doesn’t seem very likely that all of these services will survive now. We don’t know which ones will or won’t survive this, but the ones that seem to best equipped to handle the bursting of the digital channels bubble are Zee TV and Star TV, both with years of experience in television around the world.

Star TV also has the deep pockets of News Corporation to back it up.

There are other signs that areas of the digital TV spectrum are not doing the kind of business that they originally hoped to. In Pay-Per-View, the closure of U>Direct points to the fact that PPV is not doing the kind of business that was initially envisioned.

Certainly there is little evidence that PPV is actually making any money at all. In fact, one could almost guess that from the lack of evidence of it making money, and the closure of U>Direct, that PPV is in fact losing a lot of money.

Another area that is really showing signs of being in trouble is the interactive service, Open…. There have been constant rumours that the service is in fact losing money and in trouble.

These rumours have never been confirmed by Sky but they haven’t been denied either. In fact, it was widely believed that Open…. had lost £116 million in the 6 month period from 1 July 2000 until 31 December 2000.

Sky even went so far as to completely acquire Open….’s parent company, BIB (British Interactive Broadcasting) and merge it with its own New Media division to try and cut costs, renaming the service ‘Sky Active’.

We will soon see just how much profit or loss they will make and whether their attempt to influence the digital TV revolution will go the same way as some of the companies who tried to influence the dot.com revolution.

The further on we go in the digital channels revolution, the more parallels we seem to find with the dot.com revolution that promised much, but didn’t count on the lack of public support.

I can remember people saying that by now half the British public would be buying online.

This just didn’t happen and most of the over optimistic forecasts have had to be toned down to more realistic levels. In the same way, there have been a lot of over-optimistic forecasts about the Digital TV revolution. Whether most of those will go the same way remains to be seen, but seems quite likely.

A Transdiffusion Presentation

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Ian Beaumont Contact More by me

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