Slowly does it 

25 July 2008 tbs.pm/927

ukfree.tv: Why Freesat did not launch with 230 channels

At the moment this story has only appeared on one website as well as being fairly one-sided (there’s no rebuttal from Sky), so bear this in mind when considering its overall accuracy, but it does raise an interesting issue that has received surprisingly little attention within the media: namely why Freesat still has fewer channels than Sky Digital.

Before May of this year, BSkyB had an almost total monopoly in relation to UK satellite television, with the only truly non-Sky alternative being a free-to-air satellite receiver perhaps combined with programme guide information sourced from the internet; a combination never actively marketed and was possibly too technical for the average viewer.

Until of course Freesat came along, which finally introduced an easy non-Sky alternative for satellite television along with a degree of marketing to back it up. This is particularly worrying for Sky even though it has its own Freesat equivalent, since in the minds of many consumers, Sky TV equals pay-TV due to Sky’s successful long term marketing.

And given the amount of effort Sky had previously put into derailing Virgin Media’s ambitions, which went as far as buying ITV shares in order to prevent a painless takeover by Virgin Media, then you can also bet that Freesat is judged by Sky to be a very serious long term threat to the Sky subscription model.

From BSkyB’s perspective there’s two things that it can do to reduce the Freesat threat. The obvious approach is to attract consumers into subscriptions that are more trouble than it’s worth to cancel, hence the emphasis on Sky+ and “See, Speak, Surf” bundles combining pay-TV with internet and phone calls – cancel one and you have to forego the others.

The Sky+ advantage will be nullified once Freesat boxes with Sky+ equivalent (PVR) functionality appear on the market (before the end of this year, apparently), so that leaves the only other weapon in BSkyB’s armoury apart from marketing, namely the possibility of making life as difficult as possible for certain channels who also want to be on Freesat.

Because BSkyB controls both the Sky Digital encryption system and the associated electronic programme guide (EPG), Freesat has to have its own separate independent EPG system, and because the Freesat EPG data has to be part of the channel (why is another issue altogether) then there’s another hurdle to be overcome.

For certain channels, if new data is added to a channel that passes through a Sky-controlled part of the transmission chain then it has to be ‘approved’ by Sky in a process known as ‘configuration’. And Sky has placed limits on the number of ‘configurations’ that it’s prepared to make in a particular month.

Of course it’s easy to state that this cuts down on the monthly administrative workload for Sky, but it may also be easy to argue that the administrative overhead for Sky should be relatively minimal and the actual configuration process ought to take seconds as opposed to months.

It will be very interesting to see what Ofcom’s response will be to these accusations of Sky deliberately slowing down the approval process in order to restrict the number of channels available on Freesat in the short term, especially given Ofcom’s recent rulings in relation to speeding up the transfer of mobile phone numbers from one network to another.

And naturally there’s another course of action that could be taken via the European Commission, but that could take years as opposed to months to resolve which will do nothing to speed up the current approval process bottleneck, although BSkyB could eventually be hit with a large fine for anti-competitive practices as a result.

A Transdiffusion Presentation

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