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Dyke 'promoted Freeview to save licence fee'
With hindsight it seems fairly obvious that Greg Dyke's Freeview scheme was a way of ensuring that the BBC cannot be funded via the smartcard route in the future by ensuring that there are lots of set top boxes being used that aren't equipped with card slots. By closing this easy route of funding this ensures that the BBC won't suffer through a significant percentage of viewers choosing not to subscribe to such a service.
BSkyB's motives behind the support of Freeview may have been unclear. Greg Dyke said: "I've never really worked out why BSkyB wanted to help us build Freeview. To me, it was always obvious that if it worked it would undermine their own basic-tier pay business. This is now happening, and again, I think history will show that it was a business mistake for BSkyB to help us grow Freeview".
The truth of the matter is that BSkyB had no choice but to support Freeview at the time. Digital takeup was effectively stalling as all the early adopters plus sports and movie fans had already signed up for Sky, and no amount of hard sell from Sky was penetrating a large percentage of the population who for various reasons were refusing to jump on Sky's bandwagon.
BSkyB was/is hoping that once people have sampled the 'delights' of multichannel choice they would then move on to a Sky subscription since Freeview boxes can easily be relegated to a bedroom, and the 'Freesat' model would have been very costly and unproven for Sky to have implemented prior to Freeview's success. And Sky can always fall back to its subscription income as a last resort whereas ITV, etc., don't have that option.
Whatever you may think of Greg Dyke's period at the helm of the BBC, his decision to launch Freeview has at least given the licence fee a chance to prove its worth in a multichannel environment for the next couple of years.
