Strike two 

1 October 2002 tbs.pm/1830

The ITC have decided that the future of digital terrestrial television (DTT) in the UK is a platform of free channels, with no pay services involved.

BBC

The three multiplexes released by the collapse of ITV Digital have been given to a consortium of the BBC and Crown Castle International, the company that owns the BBC’s transmitters.

Three other groups bid for the licence. ITV and Channel 4 backed one. Their proposition would have been marketed under the name Freeview.

It involved a “pay-lite” element, called Freeview Plus, which would be run by a different company. This was well thought out, and contained as much detail as the winning bid.

The other bid was from SDN, a company that already run a multiplex, which is shared with Channel 5. SDN would have offered a similar service to the “Freeview” bid, with free to view channels and a “pay-lite” service, although the pay service would only be available in some areas.

The SDN bid was slightly less detailed about their plans for the platform, with no mention of any of the channels they planned to carry.

The main problem with the SDN and Freeview bids is that they both used the untried idea of “pay-lite”. The idea is that people will pay a small sum for about 6 pay channels.

This idea may work in the future, when everyone has DTT receivers. However, until there is a large audience for the service it would probably lose a lot of money, and the ITC probably didn’t want another failure on their hands.

The final bid was a rather vague service of 40 free to air channels, and probably had the remotest chance of winning.

The ITC probably decided in BBC and Crown Castle’s favour because they didn’t want to risk another failure of a pay service on DTT.

Once is unlucky, but twice would be careless. They also didn’t want to risk a backlash involved in giving the licences to another bid involving Carlton and Granada.

The winning bid was a safe option – no attempt at trying to do anything revolutionary – and also had the advantage of not attempting to fight Sky. BSkyB are even involved in some parts of the bid.

One of the main points of the winning consortium’s plan is to change the method of transmitting DTT. This will improve reception of the services, but it will reduce the bandwidth available for services.

This leads to a new limit of about four channels per multiplex for acceptable picture quality. Assuming they persuade the operators of the other two multiplexes to change their transmissions, this will limit the platform to twenty-four channels.

However, far more people should be able to receive the services. In the future MPEG encoder technology may improve, so it may be possible to add extra channels to the service without a loss in picture quality.

The consortium also plans to run trials to increase transmitter power and improve reception of the multiplexes.

One multiplex is assigned to the BBC. Most of this space is being used to bring a limited version of the interactive services seen on digital satellite for various sports, including Wimbledon and football.

The version on DTT will be limited to two screens, rather than the five that satellite has. More of the space will carry BBC services that need to be moved from the existing BBC multiplex after the change in transmission style.

The Community Channel will also be given space on the new BBC multiplex, along with the BBC digital radio channels like 6 Music.

The other two multiplexes are assigned to Crown Castle, and will carry commercial channels. This is where BSkyB come in. They provide three channels in Sky News, Sky Sports News and Sky Travel. UKTV will provide a new channel, UK History.

Three channels, CNN, Turner Classic Movies and Boomerang will share a channel. After these it suddenly gets vague. A ‘Music Channel’ is promised, an ‘Entertainment Channel’ – Channel Six? – appears, and an interactive service of some sort and some commercial radio channels also get nods.

The BBC, Crown Castle and BSkyB will work together to promote DTT, forming a company to provide support and marketing for the platform. The consortium will also provide information to retailers and customers about reception issues.

The question is, will this provide a future for the platform? The plan is to get people to buy set-top boxes to receive DTT, such as the models already on sale from Pace and Grundig, or TVs with an integrated digital tuner (known as IDTVs).

The cost for the set top boxes is currently around £100. The price is similar to the cost of subscribing to Sky for a year to get a cheap Sky box.

IDTV’s are fairly expensive however, as most are large widescreen models. The targets for the service is people who don’t want pay-TV and people who already have digital, but not on every TV in their house.

Their hope is that people will pay the one-off sum to get the twenty extra channels.

There is already an audience of about a million households with digital terrestrial receivers. Most of these were rented from ITV Digital, and the administrators of the failed company haven’t reclaimed the boxes and don’t have any plans too.

The software in the old ITV boxes is compatible with the new transmission mode, although it is unlikely to be updated, so users will probably be stuck with the notoriously slow speed of the boxes.

The manufacturers and retailers of ITV Digital boxes are also offloading their stock of unsold boxes after making deals with the administrators. The prices are comparable with the other DTT boxes on the market.

But one of the main factors for take-up of the service will be the channel offering. ITV2 and BBC Choice are reasonable entertainment-orientated services, although they are fairly cheap and cheerful.

UK History and Sky Travel are services with rather limited niches, and channel with wider targets would better suit the limited amount of channels. Sadly, I doubt we’ll see a free UK Gold or Sky One, but surely UK TV and BSkyB can produce something better than these two?

Due to the lack of subscription services, the platform has a bias towards existing ‘free’ news channels, with BBC News 24, Sky News, Sky Sports News, CNN and ITN, although the latter two won’t be on 24 hours a day.

However, there is the vague entertainment channel to look forward to. There are three children’s channels, CBeebies, CBBC and Boomerang. I would have preferred the original Cartoon Network, but it’s still a reasonably offering.

TCM offers a reasonable selection of movies. Another unknown quantity, the music channel, really depends on the content offered. A 24/7 pop-music jukebox would be a turn off for many viewers.

A well-rounded music selection would be a far better use of the limited space. Finally, there is space for commercial radio services, presumably the various digital-only services like OneWord, and an unknown interactive service, which could be anything.

The publicity machine is already starting to turn, and we’ve already seen some moves, such as a BBC trailer reminding people of the free digital services they provide.

The BBC claim they will expose the average viewer to about 100 messages about DTT over the next year. We can also probably expect press advertising and adverts on commercial channels to bring DTT back into the public eye.

In my view the channel line-up is reasonable, if a little news orientated, but it won’t grab the traditional multichannel viewer, who’ll want Sky One, E4, Nickelodeon and their ilk. I’m not convinced many people will spend £100 to get the channels either, but prices for boxes are coming down. One company says they plan to offer a £30 box.

These cheap boxes will help increase the number of people going to digital. But I don’t see cheap boxes being able to significantly increase digital take-up. The main thing that would increase take-up would be cheaper IDTVs.

At the moment digital functionality is reserved for expensive widescreen models, which aren’t an option for many consumers. Cheaper IDTVs in different forms, like smaller portable TVs, are needed.

They need to be replacements for all TVs, not expensive main sets. One option to do this would be for the government to force manufacturers to phase out analogue only TVs, but I can’t see the manufacturers going along with this, at least not when the digital switch off is so far away.

All in all I think the new services will make good use of the limited DTT space, and should provide something for nearly everyone. Although channel line up is rough in places, it should improve in the future if companies try and be more adventurous.

However I can’t see many people rushing out to buy a set top box for these services, and the overall success of the platform will probably depend on people buying IDTVs instead of analogue sets.

[Since this article was written, a free service called Freeview and a small pay service called Top Up TV have launched on digital terrestrial]

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