ITV Digital Dead. Licence to Be Put Up for Re-tender

01 May 2002

The prequal to the saga is over.

As the hour heralding May Day chimed, the coup de grace was delivered when suppliers of ITV Digital's paid-content programming turned off the tap – the most significant of whom was Rupert Murdoch’s BSkyB whose aggressive competitive tactics, ITVd management claimed, were a major contribution to its downfall.

For the time being the platform will remain on-air, broadcasting free-to-view programmes supplied by the BBC and ITV1. But despite the bullish noises made right up to the eleventh hour by administrator Deloitte & Touche [WAMN:29-Apr -02], not a single investor was prepared to hand over sufficient ready money. Said despondent D&T manager Nick Dargan: “There is no appetite in the market for a preservation of the business as a going concern.”

Short of a miracle ITVd will go into liquidation almost immediately. Some 1,500 jobs are on the line at the company’s two call centres and its London headquarters. Around fifty key staff will be retained to ensure that the platform’s free-to-air channels continue to transmit, and UK commercial television regulator the Independent Television Commission is poised to start a fast-track process to appoint three new terrestrial digital TV licensees.

The ITC says the new licence will be split into three to allow more than one company to participate in the digital terrestrial platform. Many in the media business believe Rupert Murdoch has been waiting in the wings just such an opportunity, although this would trigger a tsunami of political and anti-trust opposition. The BBC is believed to have flagged its interest and an ITC statement about the new licensees is expected June 12.

The failed venture – in which BSkyB was one of the founding triumvirate before competition regulators intervened – has cost Carlton Communications and Granada Media in the region of £1 billion ($1.46bn; €1.62bn). Lamented Carlton chairman Michael Green: “It's a sad day for the staff of ITV Digital, for its customers, and its suppliers. And it's a sad day for digital television in Great Britain.”

And, as one close observer of the media scene commented: “A sad day too for Carlton and Granada investors, whose boards of management pursued a strategy of promotional and programming largesse unsupported by pockets of the same depth as ITVd’s main competitor.”

Meantime, hapless shareholders in the ITV duo also face a prospective £500 million breach of contract lawsuit from the Football Association for upward of £500m in compensation for the soccer TV rights contract on which ITVd reneged.

Data sourced from: Financial Times; additional content by WARC staff