British TV Titans Explore ‘Digital Coalition’

05 December 2001

Four unlikely media bedfellows – the publicly owned British Broadcasting Corporation, ITV Network, Channel 4 and BSkyB – are exploring a ‘digital coalition’ with the aim of stabilising ITV Digital, the cash-haemorrhaging pay-TV platform jointly owned by Carlton Communications and Granada Media.

According to insiders, the moving force behind the initiative, BBC director general Greg Dyke, is eager to involve the Rupert Murdoch-controlled satellite broadcaster BSkyB which currently claims 5.4 million digital subscribers.

Dyke [and, it is believed, the UK government] is advocating the launch of a subsidised digital terrestrial service carrying twenty free channels – to which, if it decides to participate, BSkyB would supply some of its programme content along with the other partners.

BSkyB chief executive Tony Ball did not rule out the idea: “There might be an opportunity for Sky to participate in that free-to-air service with a couple of channels,” he said. An opportunity said to have especial appeal would be a “best of Sky” channel designed to cross-promote its pay-TV services.

The news comes in the wake of Tuesday’s revelation of plunging profits at Carlton [WAMN: 04-Dec-01] and illuminates the cryptic remark uttered by the broadcaster’s chief executive Gerry Murphy who referred to “more creative solutions” than closure to the current woes of ITV Digital.

The conjugation of mutual interests also sparked a rare outbreak of positivism among London’s entrail-rakers. Enthused Credit Suisse First Boston media analyst Carlo Campomagnani: “The economies of converting a free-to-air digital viewer to pay-TV are transformed. ITV Digital was supposed to be a black hole but if it can stop giving away the set-top boxes, I am convinced it can make money.”

News source: Financial Times