SKY DIGITAL
Ownership: BSkyB
Structure: Sky Entertainment - the distribution platform Sky Networks -
programming and joint ventures, sport
Key personnel: Mark Booth - chief executive, BSkyB Elisabeth Murdoch -
managing director, Sky Networks
Vic Wakeling - managing director, sport
Base: Isleworth
Launch date: 1/10/98
Ad agency: M&C Saatchi
Adspend: pounds 65 million
Means of delivery: Digital satellite
Consumer costs: Packages from pounds 6.99/month to pounds 30 or much
more if you use the pay-per-view, or ’ahem’ adult channels on a regular
basis
No of channels: 90 at launch, but will reach 200
Programming: Sky Sports News is the only entirely new channel available
Star names: Jimmy Hill, Barry Norman, Richard Jobson, Chris Evans (with
The Chris Evans Breakfast Show on Sky 1, below)
Projected take-up: Murdoch predicts 200,000 subscribers by 31
December
If you want satellite digital television, then basically, this is the
biggest platform around. To date, this package of 56 different channels
includes 11 movie channels, five music channels, five sports channels,
seven lifestyle channels, four news channels, three children’s channels,
ten documentary channels and 12 general entertainment channels. There
are also 44 new audio channels and, oh, there’s also BBC1 and 2, Channel
4 and Channel 5. Staggered film start times - where the same film is
broadcast at intervals on different channels - boosts the headline
number of channels up to a stratospheric 200. Not surprising, then, that
Sky is confident of its ability to attract subscribers in the UK.
’The forecast we made of an installed base of 200,000 digital
subscribers by 31 December is achievable and realistic,’ Elisabeth
Murdoch, the managing director of Sky Networks, says. ’This may well be
the hot Christmas product for the year. We’ve invested pounds 100
million in digital development. It will take time for people to take
advantage of these new freedoms and there will be cynics who will say it
won’t work, but Sky has never listened to nay-sayers.’
To begin with, though, the most dramatic change for viewers will be
within Sky’s film service. The three film channels available to digital
subscribers are Sky Premier, Sky Movie Max and Sky Cinema, the same as
are available to analogue users. On digital, however, these have been
given an extra eight screens. In total, Sky Digital will be offering 25
films every night on 11 screens as part of the subscription package,
with staggered starting times. Premieres so far signed up include LA
Confidential, Jerry Maguire and Con Air. There will also be an expanded
Sky Box Office for the pay-per-view film service. This will now offer up
to 15 films every night. Pay-per-view films will be priced - as now - to
compete with the video market.
The digital audio offering will be boosted by the 44-channel Music
Choice and Music Choice Extra propositions. These are a joint venture
between BSkyB, Sony and Warner Music. An audio-only offering will play
more than 2,000 tracks per channel per week and has access to more than
300,000 pieces of music from more than 150 record labels.
The documentary output is provided by the respected Discovery Channel,
while the History Channel, currently shown for four hours a day, will be
expanded to 12.
BBC DIGITAL
Ownership: BBC Launch date: 23/9/98
Means of delivery: Direct to home via terrestrial, satellite and
cable
Despite lobbying for and successfully winning its own multiplex, the BBC
took the decision to be ’platform neutral’ in its offering, meaning that
all of its channels will be made available on all three digital
platforms. With hindsight this has proved a prescient decision. For
example, when a viewer clicks on the Sky Digital electronic programme
guide, BBC1 and BBC2 are numbers one and two in the general
entertainment listings.
In all, the BBC has earmarked a total of pounds 1 billion to the digital
revolution and, apart from making sure that its channels are available
wherever digital viewers turn, it has also embarked on a two-pronged
channel development policy of its own - one free-to-air and the other a
subscription service. Apart from offering BBC1 and BBC2 in widescreen
format and an online information service, the corporation has also
launched BBC Choice and BBC News 24. A fifth option, the BBC Learning
Channel, will go on air in January.
The BBC’s five pay-TV channels are part of a joint venture with the
cable and satellite company, Flextech. The five include UK Play, a music
and comedy channel, as well as the already familiar UK Gold channel.
BRITISH INTERACTIVE BROADCASTING
Ownership: 32.5% BSkyB, 32.5% BT, 20% Midland Bank, 15% Matsushita
Means of delivery: Digital satellite and cable
Launch date: Initial service before Christmas, with a full launch next
year
An investigation by the European Commission’s anti-trust regulators had
slowed the launch of this interactive home shopping, banking and
internet service. However, clearance has now been given and the first,
fairly limited, service could be available by Christmas.
In the long term, thousands of businesses are likely to use this system
to make their services available to customers with an upgraded TV remote
control. The system will start with a home shopping provision but that
is by no means the end of it.
The idea is that you will be able to use your trackpad to wander up and
down the aisles of a virtual supermarket, clicking on those products you
want, before tapping in your credit card details and waiting for the
home delivery service to come calling. Within a couple of years viewers
will be able to use the service to participate in programmes by pressing
a button to vote, while the big carrot is the possibility that they
could eventually use the system to edit their own sports broadcasts by
choosing camera positions, replays and so on.
CABLE DIGITAL
Key players: Cable & Wireless, NTL, Telewest
Means of delivery: Digital cable
Although apparently ideally placed to benefit from the switch to
digital, the cable companies are in truth lagging a long way behind the
direct-to-home and satellite-based transmission systems. Whether this is
by accident, as some claim, by inefficiency, as others maintain, or
because they are waiting to see how the market develops, as the
companies themselves reckon, remains to be seen. Cable & Wireless has
said it will start offering its digital version, Cable & Wireless
Adventure, from spring 1999. NTL says it is looking at an autumn 1999
launch. Existing subscribers will be offered a digital upgrade, possibly
for as little as pounds 1 a month initially, for a package including a
high-speed internet connection.
The cable companies promise to show everything that is on BSkyB and
ONdigital plus a range of interactive services, for which the broadband
delivery mechanics of cable are ideally suited. The companies are also
undertaking to provide free upgrades of hardware and decoders to
encourage existing subscribers to move to digital.
DIGITAL TELETEXT
Ownership: Teletext Launch date: Final quarter, 1998
Means of delivery: Direct to home
Digital teletext is to the current analogue system what e-mail is to the
Pony Express. Out go the old-fashioned graphics and the annoying fact
that you have to sit patiently though all the pages until the one you
want eventually comes around. In comes the ability to scroll backwards
and forwards on demand, along with internet-quality pictures and
graphics. There will also be easier navigation around the service
through the use of up, down, left, right and select buttons which will
be available on the remote control.
The old style Teletext is responsible for selling one in every ten
holidays booked in the UK, and the added advantages of the new service
are more than likely to increase that number. ’Digital teletext could
become a cheap direct-response TV device very quickly,’ points out the
head of TV at Initiative Media, David Cuff. ’And whereas the other
digital changes are likely to take time to impact on advertising in a
real way, digital teletext could start to make an impression much more
quickly.’ Teletext itself is promising a state-of-the-art response
mechanism on the new service and points out that cross-referral from TV
ads will be quicker and easier under the new service, while each
teletext page will be able to carry much more information on it.
FILMFOUR
Ownership: Channel 4
Launch date: 1/11/98
Means of delivery: Analogue satellite, digital satellite and direct to
home with ONdigital
FilmFour is Channel 4’s first digital offering, but the station is also
making it available on old-school cable and satellite. It’s basically a
television version of repertory cinema, offering independent US and
world cinema coupled with avant-garde and experimental films.
Broadcasting between six in the evening and six in the morning, it will
transmit more than 80 feature films a month. It’s one of the few
genuinely new programmes that digital television will provide. FilmFour
will show all the films that Channel 4 has funded - such as Four
Weddings, Trainspotting, Shallow Grave - as well as US independent films
and world cinema, for pounds 5.99 a month.
’We want this channel to be available to everyone,’ David Brook,
director of strategy and development at Channel 4, says. ’It’s going to
be on cable and satellite as well as the digital channels so that
everyone can see it. We’ll have seasons of films and, especially for
people outside London, it’s going to be the main alternative to the
endless run of blockbusters that most cinemas rely on these days.’
Channel 4 is also developing other digital channels.
S4C DIGITAL NETWORKS (SDN)
Ownership: Partnership between S4C, United News & Media and NTL
Launch date: 1/11/98. The SDN multiplex will carry both S4C and Channel
5
Means of delivery: Direct to home, cable
Wales’s rugged landscape is the biggest handicap to the quick
dissemination of this service, which is based in Cardiff. More
transmitters are needed than in the rest of the UK, so the process of
adapting is likely to take years rather than months.
SDN estimates that even when it is completed, only 65 per cent of Welsh
viewers will be able to receive the new services via their existing
aerials. The service, which is a mix of public and commercial, will be
carried by all Welsh digital cable operators as well as by Sky Digital,
meaning that for the first time S4C will be available throughout the UK.
Initially it will be free-to-air.
Pay programming details are not finalised yet but they are likely to
showcase United News & Media offerings. All S4C’s digital programming
will be in Welsh, broadcast daily from midday to midnight, while the
current S4C service will continue to transmit its usual mix of Welsh and
English programming.
ONDIGITAL
Ownership: Granada/Carlton joint venture
Key personnel: Stephen Grabiner, chief executive
Base: Battersea, London
Ad agency: BMP DDB
Adspend: pounds 90 million
Launch date: 15/11/98
Means of delivery: Digital, terrestrial and cable
Consumer costs: pounds 7.99/month - for any six primary channels;
pounds 9.99/month - for all 17 primary channels pounds 11/month - for
any one Sky Premium channel
pounds 15/month - for two Sky Premium channels
pounds 18/month - for three Sky Premium channels
Manchester United TV - pounds 5/month
FilmFour - pounds 5.99/month
All subscribers receive digital versions of the existing terrestrial
services, Digital teletext, BBC Choice and BBC News 24
No of channels: 32 (34 from Jan)
Programming: Has ITV and ITV2 which Sky Digital doesn’t. Plus the
exclusive ONdigital channel, First, and Shop, a joint venture home
shopping channel operated by Littlewoods and Granada
Projected penetration: Grabiner is looking to the long term - he wants
30% of the total digital market within five years
ONdigital is certainly not attempting to compete with BSkyB or the cable
operators on the breadth of its offering. In fact its mantra is that in
the cluttered digital age, less is more. It will offer just 32 channels
compared to the 200 Sky can boast. But those 32 are comprised of the
most popular Sky
offerings, including Premiership football and movies, plus ITV2, ITV’s
separate digital channel which, like its bigger sibling, is not
available to satellite digital customers. However, ITV2 has a programme
budget of pounds 42 million, which sounds impressive until you compare
it with Channel 5’s pounds 105 million and ITV’s pounds 640 million
annual budgets.
ONdigital’s biggest single advantage is the resistance that the British
public has shown towards too much diversity and choice, and in its
reluctance to invest in cable or satellite hardware. Over the past six
months, we have seen five cable channels fold up their tents and slip
away as the attempt to recreate the US multichannel experience in the UK
has failed. Channel One, Country Music Television, the Performance
Channel and even the Weather Channel found that British viewers just
couldn’t be bothered to tune in.
And, historically, it’s the same story in terms of cable and satellite
penetration. Of all the homes that could take new cable television
stations, the percentage of those that do has stuck resolutely at 20 per
cent for the past ten years. In fact upwards of 17 million homes do not
have satellite or cable. Even BSkyB finds that it loses between 12 and
15 per cent of its subscribers every year in a process known, rather
euphemistically, as ’churn’. Since all the new channels have launched,
the total amount of viewing to all television has been steadily
declining. It seems the more we have to watch, the less often we tune
in.
At the heart of the ONdigital proposition is the ’plug and play’
concept.
Viewers will initially have to invest in a set-top box, priced to match
the subsidised pounds 200 that Sky has set for its rival,
non-compatible, box. Consumers will eventually be able to avoid a
set-top box altogether by buying an integrated digital TV. ONdigital’s
subscribers will then receive, free of charge, a small device that plugs
into the back of the set.
The City broker, Henderson Crosthwaite, is estimating that ONdigital
will attract almost three million subscribers by 2005, which would make
its shareholders - Carlton and Granada - happy and, presumably, very
rich.
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