Freeview, the free-to-air digital multichannel TV platform launched less than four months ago by the BBC, BSkyB and Crown Castle Communications triumvirate, is here to stay according to a roundup of media-savvy talking heads.
Sales of Freeview set-top boxes will hit the half-million mark around the middle of March, retailers estimate. And this would have been even greater had more boxes been available in the shops. In addition, over one million compatible digiboxes are still in use by former customers of failed platform ITV Digital.
But the favourable though the numbers may be, they pale into insignificance alongside the sun of approval by Morgan Stanley and other media savants.
Says the latter’s Sarah Simon: “[The success of] Freeview has implications for the entire UK television market. We think traditional channels will be fragmented, and existing pay-television channels may also be threatened if they are not on the platform.”
By 2010, Simon believes, there could be as many as eleven million free-to-air digital homes (44% of UK households), including a relatively small number watching free channels on satellite.
She rationalizes that market fragmentation in Freeview homes – where viewers suddenly have choice of thirty channels instead of five – will dramatically accelerate the long-term erosion of ITV’s market share.
But it’s not all bad news for ITV, as ZenithOptimedia’s Adam Smith points out. “ITV would obviously prefer it if no one got multichannel TV. But given that it exists, better for them a Freeview home than a Sky dish home.” He bases this premise on the fact that ITV channels grab more share-of-viewing in Freeview households than those with satellite or cable
Conversely, it may not be all good news for Sky, believes Simon. “Investors should pay close attention to Sky's quarterly subscriber growth from the second quarter [of 2003] onwards – the first quarter when box supply is likely to be at full strength.” Smith, too, believes the fledgling could dent the hitherto impregnable Sky: “Freeview has a BBC bias. Its demographics are middle class, middle England. Those are natural BBC viewers.”
But former ITV Digital ceo Stuart Prebble, now a consultant to digibox manufacturer Netgem, argues that Freeview’s main advantage is that it is not perceived by the formidable BSkyB as a competitor. Also that boosting of the digital signal strength since ITV Digital's demise means the terrestrial platform is now available to a far greater number of UK homes.
“People are always resistant to paying for a service,” pronounced Prebble, “and Freeview has no competition … I always said that, in the end, DTT [digital terrestrial television] would be the biggest platform. It looks like it will.”
Andy Duncan, the director of marketing at the BBC, is as upbeat as his job requires: “It's going extremely well so far. Basically, that's because it's a strong and simple concept.”
But does it compete head-on with Freeview partner BSkyB? “We believe Freeview is complimentary to pay-TV,” Duncan opines. “There is no doubt it will be popular for kitchen and bedroom sets, as well as appealing to new [non-digital] households.”
Data sourced from: Independent.co.uk; additional content by WARC staff