Neil Blackley, senior media analyst at Merrill Lynch, argues that the BBC can make a greater difference to digital take-up by concentrating on the forthcoming 'digital coalition' that plans to market cheap set-top boxes for free-to-air digital viewing.
"The digital coalition needs more financial support - otherwise 'plug and play' could become 'plug and pray',
says Blackley. "And let's get on with it before the digital coalition becomes digital coagulation."
Marketers may just about be able to tolerate BBC One beating commercial mainstay ITV1 in the ratings, but when the BBC attempts to steal their opportunities to target young adults, it's one step too far.
The 16- to 34-year-old age group - which the proposed BBC Three generally targets - represents a critical and difficult demographic group for the marketing community.
This age group tends to hunger for new ideas and brands and have a high disposable income, but is notoriously difficult to reach through traditional media.
So the last thing marketers and advertisers want in the current downturn is for the only advertising-free broadcaster to pinch viewers from both subscription services (E4, Sky One, MTV) and free-to-air commercial channels.
Hence the cries of celebration last week when culture secretary Tessa Jowell announced it was still not the right time to give BBC Three the nod.
After a period of consultation with all the affected parties, Jowell said she was asking the BBC and the ITC to reconcile their differing estimates of the impact the new BBC Three may have on the commercial sector.
While the BBC claims the new channel will only cost the commercial broadcasters £4m, the ITC's prediction is closer to £25m - a major discrepancy.
Timely delay
At first glance the government's decision appears to be a minor victory for the commercial sector - maybe just a slight delay of the inevitable.
But some feel it marks a crucial turning point in the war against a runaway BBC.
Last year, the commercial sector was forced to watch as ITV1 was pipped by BBC One in terms of total audience share - the first time this has happened.
It has also turned green with envy as the BBC secured an above-inflation increase in its licence fee revenues, while private sector budgets have been ravaged by the advertising slump.
Now, at last, the BBC is not getting its own way. The last piece in its jigsaw of channels, which it will market against commercial rivals, is missing.
Nobody really knows when - or if - BBC Three will now be launched. The Department of Culture, Media and Sport had planned to make a decision on BBC Three before the end of March, having already turned down the original proposal last September. Jowell now says that deadline is no longer realistic.
When asked whether the delay would be weeks or months, she hinted at the former.
But while the reason given for the delay was the discrepancy in forecasts of the market impact for BBC Three, the wider rationale is that the economic downturn makes it a bad time to launch another major 'public service' channel.
In her speech announcing the delay, Jowell empathised with the commercial sector and acknowledged its concerns about an 'unfairly competitive' BBC.
At the ISBA annual conference last week, Steve Morrison, chief executive of Granada, said he was convinced Jowell "has a good understanding of our position".
Another senior TV executive privately commented this week: "This is a serious advertising recession and it's clear things aren't going to improve until at least the back end of this year. My instinct is that Jowell doesn't want to say yes quickly. It could mean a long delay."
On this basis, there is a suggestion that BBC Three may well not launch for another year.
Commercial damage?
So what has tipped the balance and convinced the government that BBC Three could unfairly damage the commercial sector?
Since the beginning of the year, commercial broadcasters and advertising bodies such as the IPA and ISBA have worked hard to convey their concerns over the anti-competitive nature of the BBC.
They have also faced up to the tough climate for commercial broadcasters.
"The economic facts speak for themselves,
adds the senior TV executive.
We should now expect a period of limbo until Jowell clarifies the government's position.
Most observers feel it is unlikely the BBC and ITC will come to an easy reconciliation, which would force Jowell to make a more definite decision in the near future.
While commercial broadcasters are relieved at the delay, they apparently do not have enough confidence in it to actually change their marketing plans. Instead, they say, they will continue to lobby vociferously against BBC Three's launch.
"This is just the first stage of the lobby process,
says a spokesman for Channel 4. "We will continue to lobby on the whole issue of whether the BBC is able to launch a channel of this type. We have no problem with it launching a channel for 16- to 34- year-olds, but if it is publicly funded it should be complementary to what we already do."
Simon Downing, head of marketing at MTV Europe says: "The youth market is saturated and highly competitive. The BBC is acting unfairly and BBC Three would seriously dent our revenues. And while we've won this battle, there's still a long campaign ahead."
Marketers and advertisers will be watching the outcome of this campaign very carefully. They recognise that BBC Three has become a symbolic line in the sand against a marauding BBC.
THE BBC'S MARKETING CHALLENGE
When Tessa Jowell announced the further delay to BBC Three at the Westminster Media Forum, BBC chairman Gavyn Davies' face looked like thunder.
Davies argues that every month the decision on BBC is delayed is another month when it cannot begin promoting a coherent portfolio of channels and help the government's objectives toward analogue switch-off.
BBC Three is certainly a gaping hole in the Beeb's channel portfolio for the 21st Century. The relaunch of BBC One begins this week, BBC Two now has new idents and colour scheme, BBC Four launched at the beginning of March and kids' channels CBBC and Cbeebies were introduced in February.
But what about the youth audience? The low-profile BBC Choice remains its only current youth offering (see table).
After Tessa Jowell stymied the original plans for BBC Three in September on the grounds that it "wasn't distinctive enough", the BBC now says the new channel will concentrate on the 25- to 34-year-old age group, with a greater emphasis on current affairs. We know little about the specific content planned, but the Johnny Vaughan Tonight show, currently showing on BBC Choice, is expected to be a key attraction.
Jane Scott, the BBC's controller for TV strategy and marketing, says that until things become clearer, no marketing can be planned in relation to BBC Three. "We can't do anything until the funding is agreed. But we still have a good portfolio of channels and we're still driving digital generally,
says Scott.
Davies is more aggressive. "Our expansion into new services is almost complete, but there's one loose end: we need permission to launch BBC Three,
he says. "It's vital because young adults are increasingly detached from public-service genres. And we need a full portfolio of free channels to market digital to the 60% of population that have not yet been seduced by digital."
The BBC argues that its digital proposition will only become clear when it has a full demographic spectrum of channels to promote.
The opposition remains sceptical of these claims. After all, around 40% of the country has already signed up to digital with very little help from the BBC.
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