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MAGGIE BROWN

The day before BSkyB announced its free-to-air service, ITV’s Charles Allen was lightly grilled by MPs on his channel’s efforts to bridge the digital divide.

Chris Bryant – briefly famous for appearing on a gay website in his Y-fronts – is a crusader on this point because his Rhondda Valley constituents are part of the 27% of the population without a Freeview digital terrestrial signal.

Allen burbled away, but offered little comfort. The BBC has toyed with launching its own Freesat service, but clearly baulked at taking on BSkyB.

This is the charged political context in which BSkyB’s move has to be considered. In pure financial terms, I think it is a bit risky, not quite the win-win decision it is painted as.

But Ofcom’s report to the Government on digital switchover this spring underscored the need for exactly this Freesat solution. But it does answer the Bryant-style lobbyists. BSkyB tailors corporate social responsibility to commercial ends.

But the question is whether it will be enough to head off a probe into BSkyB’s dominant market power in pay television and platform some time in late 2005, after the election. Ofcom’s top brass go silent when this is raised.

But once Ofcom has cleared the decks of the public service broadcasting review (the BBC), settled on the current telecoms review (BT) and ensured some kind of new settlement for the wimps at C4, it is hard to see it escaping, for all Freeview’s success.

Though there is a far wider degree of acceptance of BSkyB’s services. It is a ubiquitous everyday part of British life.

Now there’s no doubt that Rupert Murdoch is demanding BSkyB to take a leading part in the final digital land-grab. So this deal proves this aggression is shared by James Murdoch. Going free required a big change in mindset among senior BSkyB executives, wedded to Tony Ball’s target £400 average revenue per user.

The way around this now is that, since the new network is free, created from non-subscribers, they will not be included or water down the ARPU figure. All very convenient. But the City seems to have agreed to be weaned off a one size fits all all strategy.

Of course the rapid growth of Freeview to 3.5 million in two years, half of BSkyB’s network, has had a big impact. However, there is a downside. I wonder if the price, £150, is not a bit on the high side for the Aunt Bronwens of the world, when you can go to the high street and get a Freeview device for a third of that. Nor are the 200 channels that compelling, a quarter are shopping, ITV2 and E4 are excluded.

But there must be a danger that Scrooge-style Sky subscribers will spin down to a free service, especially as interest rates rise.

Also, it paves the way for Ofcom eventually to ask the question: why can’t BSkyB viewers have the à la carte option, true pay per view? In the short term, expect a huge marketing push this autumn, with much repackaging and dressing up of the low to medium £15 to £25 a month options to prevent temptation.

Meanwhile, Sky+, a real joy, and premium services, will be pushed as never before.

But, to end on a positive note, once a home is part of the Sky universe, the company can employ every cross-promotional ploy around. It’ll use the free Sky services as barters for subscription.

And don’t let’s forget the red button, interactivity and alternative revenue streams, which advertisers and channel owners are just getting to grips with.

BSkyB will be continually expanding its bank of names and addresses, and personal preferences, as viewers click through. All valuable data.