BBC in Talks with ITV Digital to Prevent Murdoch Dependence

07 November 2001

Commercial network ITV is in advanced talks over the future of cash-haemorrhaging dTV platform ITV Digital with a hitherto unexpected ally – the publicly funded BBC.

The BBC wants to ensure continued free access to its channels in the digital age, but is concerned that if ITV Digital fails, the only UK distribution systems available will be Rupert Murdoch’s BSkyB and the US-owned cable operators Telewest and NTL. Said one source: “[The Corporation] does not want to be dependent on Rupert Murdoch.”

The answer? A “digital coalition” of free-to-air broadcasters ITV, the BBC, Channel 4 and possibly Channel 5, all of which would combine their digital terrestrial broadcasting operations to deliver multichannel dTV free of charge.

The scheme – in which BBC director general Greg Dyke is said to have taken a personal interest – involves the sale of set-top boxes in the high street for around £100, which would provide access to around twenty channels without further subscription payments, reversing ITV Digital’s current policy of giving away boxes for free then charging for the channels.

However, should owners of the set-top boxes want to gain access to premium services such as sport and movie channels, they could upgrade by purchasing a credit card-sized device for £20–£40 to be inserted in the back of the box, allowing ITV Digital to stop handing out costly technology without charge and reducing its projected losses by about £100 million.

The scheme is thought still to be weeks away from being finalised, and may well run into opposition from BSkyB and cable operators.

Although the BBC would not contribute any money to the initiative, the amount of further investment needed from ITV Digital’s owners Granada Media and Carlton Communications before the service broke even is expected to fall from over £300m to around £150m under the plan. The duo have to date pumped over £800m into the platform.

News source: Financial Times