Psychological warfare, Part 2
BSkyB to launch DTT pay-TV
Today saw the big launch of Virgin Media, which is essentially most of what NTL-Telewest used to offer combined with the Virgin Mobile service plus a few new bells and whistles tacked on for good measure. Not exactly revolutionary, but the Virgin name combined with the current fad for 'bundles' and a big marketing push may prove to be far more significant.
BSkyB initially seemed to counter this new threat by just stepping up its "See, Speak, Surf" promotional campaign, but by Sky standards this appeared to be pretty poor when compared to previous headline-making gestures such as last year's ITV share grab or a previous attempt to control Manchester United Football Club.
Therefore if BSkyB sees Virgin Media as a much greater potential threat to its business than anything else - enough in itself to trigger a very expensive ITV share raid - then something else was required in order to take the wind out of Richard Branson's sails on his 'big day'.
Put simply, BSkyB had announced that it wants to replace the three existing Sky channels on Freeview (Sky Three, Sky News and Sky Sports News) with four new encrypted services which will (perhaps conveniently) need a new set top box. However all of this will require Ofcom approval, and there are significant stumbling blocks that could derail today's announcement.
On a basic level Ofcom may be unlikely to refuse such a request since it appears to show very little interest in regulating the usage of existing spectrum, but there are numerous obstacles from a commercial perspective including BSkyB's ITV shareholding and the fact that Sky will end up having commercial pay-TV services on two platforms.
Top Up TV is bound to be annoyed as well, not just from a competition perspective but because they couldn't obtain Sky One for their platform before it was forced to transform the service into its current Anytime incarnation. And anyone wanting to watch Setanta Premiership football match coverage will still at least require an additional subscription and viewing card.
If BSkyB does get its own way and is allowed to launch a Freeview-competing digital terrestrial pay-TV service, will the loss of the Sky channels from Freeview have any significant impact? It might slightly weaken the appeal of Freeview from a sales perspective, but the three channels probably amount to more on paper than they actually do in the real world.
In practice the majority of people will perhaps miss only Sky News, but BBC News 24 will ensure that Freeview won't be starved of a 24-hour rolling news service. And trust me, News 24 is better than Sky News.
The loss of Sky Three is potentially more interesting since Sky will no longer have a free-to-air outlet to promote the offerings of its pay-TV channels, but video on demand services may make Sky Three's loss increasingly irrelevant. Just buy a Futurama box set and you won't have to put up with that annoying on-screen text anymore.
But at the end of the day does it matter to BSkyB if this latest proposal gets rejected by Ofcom (presumably after a lot of pressure from rivals)? In a word, no, since the announcement in itself may have soured Virgin Media's launch day.
And that may have just been the sole intention.
