UK dTV Sector Braced for ITV Digital Disaster

25 March 2002

The British television industry is bracing itself for the imminent collapse of ITV Digital, the floundering digital terrestrial platform that faces closure after failing to renegotiate a soccer rights deal.

Last week, the Football League (the three soccer divisions below the elite Premier League) rejected ITVd’s plea that the £178 million ($254m; €289m) still to pay on its three-year rights deal be reduced to £50m [WAMN: 22-Mar-02].

The decision leaves the loss-making platform – co-owned by Granada Media and Carlton Communications, the dominant duo in commercial network ITV – facing financial ruin.

One ITV Digital executive admitted on Friday that there was a “very, very real threat” of the ITV Sport channel (on which Football League games are shown) closing in May. However, other reports suggest the whole platform could be closed by its owners in the next fortnight unless an eleventh-hour compromise with the League is hammered out.

The latter solution does not look likely – the League wrote to Granada and Carlton over the weekend threatening the platform with a lawsuit if it goes under, claiming compensation of £500m for the remaining rights payments and lost ad revenue at football grounds.

Such developments have caused concern throughout the nation’s television sector. One major fear is that the collapse of ITV Digital will be a huge blow to the growth of the dTV industry as a whole.

Should the platform cease broadcasting in the next couple of weeks, the publicly funded British Broadcasting Corporation is believed to be preparing a package of free-to-air channels (including BBC Choice, ITV2 and BBC4) for ITVd’s 1.2m subscribers.

The BBC and ITV have been in talks with other broadcasters for months about setting up a digital coalition offering free-to-air channels, with subscribers having only to pay for set-top boxes.

These discussions are set to intensify this week in the wake of the ITV Digital debacle. Indeed, the set-top boxes currently in the hands of the flailing platform’s subscribers may be used as the basis of such a free-to-air network, since ITVd is not expected to go to the trouble of recalling them.

However, the platform’s customers will no longer get access to channels such as MTV, E4, UK Gold, Sky One or any of Sky Sports 1, 2 and 3, affecting their ad revenues and subscription fees.

Meanwhile, the BBC, commercial broadcaster Channel 4 and the Independent Television Commission are putting together an ad campaign to allay fears over the future of dTV. Not only that, the ITC has underlined the lack of confidence in ITVd’s prospects by drafting an ad calling for applications to take over the platform’s digital terrestrial licence.

Data sourced from:; Financial Times; BBC Online Business News (UK); additional content by WARC staff