SPOTLIGHT ON: DIGITAL TERRESTRIAL TV: BSkyB’s franchise bid teams old rivals in surprise alliance - What are the implications of Rupert Murdoch’s latest strategy? By Alasdair Reid

Digital terrestrial TV may not be such a damp squib after all. Many commentators believed digital’s battles would be fought in the satellite arena - after all, digital satellite launches later this year, while terrestrial digital services aren’t scheduled to appear before the middle of 1998.

Digital terrestrial TV may not be such a damp squib after all. Many

commentators believed digital’s battles would be fought in the satellite

arena - after all, digital satellite launches later this year, while

terrestrial digital services aren’t scheduled to appear before the

middle of 1998.



Satellite is synonymous with Rupert Murdoch. Give Murdoch a head start,

so the thinking goes, and he’ll decimate the opposition.



Following last Friday, a lot of that thinking will have changed. Friday

was the deadline for applications for digital franchises. Half the

terrestrial capacity has been allocated to ITV, Channels 4 and 5 and the

BBC so they can upgrade mainstream services to the new technology. The

remaining frequencies, capable of carrying 15 channels, are now up for

grabs.



The Independent Television Commission mandarins opened the bid envelopes

to discover that Murdoch has decided he wants in. Not only is BSkyB one

of the applicants, it has joined forces with some unlikely allies -

Carlton, Granada and the BBC. The same BBC that has been trying to

convince the Government to handicap Murdoch in the digital race.



The consortium, British Digital Broadcasting, faces only one opponent: a

group put together by the US-owned cable company, CableTel, and

including United News and Media and Canal Plus, the French pay-TV

company.



CableTel executives were completely wrong-footed by the BDB

application.



Who can blame them? BSkyB, Carlton and Granada have poured scorn on the

very idea of digital terrestrial TV. Together, in BDB, they form a

formidable alliance. Or do they? Murdoch, after all, moves in mysterious

ways. Could he be hedging his bets? Or is he more subtle? By pretending

to throw his lot in with the TV establishment, is he seeking to

guarantee freedom of action in the more important satellite sector? Who

can say?



Perhaps, one way or another, Murdoch’s presence alongside three of

Britain’s most powerful broadcasters now guarantees the success of

digital terrestrial TV. Paul Longhurst, the media director of Ammirati

Puris Lintas (CableTel’s agency on the digital bid project) says this is

the wrong way to look at it. He argues the Government has decided

digital broadcasting is too important to be allowed to become a

satellite-only medium. If its future has never been in doubt, the ITC

decision shouldn’t be influenced by negative factors. ’The danger is

that if BDB won, this would merely add to consolidation in the UK’s

media markets. You’d be giving it to the same players and letting

Murdoch in the back door at the same time,’ he comments.



Do other, more objective, agencies agree? Should advertisers and

agencies be worried?



As Nick Theakstone, the broadcast director of the Media Centre, points

out, the good news is that the big players are interested in the first

place. ’Our fears would centre not so much on Murdoch but on Carlton and

Granada - will their possible collaboration in digital have implications

for the ITV market?’ he asks. ’That is a concern. There is not enough

competition in the marketplace as it is.



’On the other hand, the fact that these heavy hitters are getting

involved is great news for digital TV. They will bring the finances it

needs and ensure there are commonly agreed standards on transmission

technology.



The biggest long-term worry for advertisers, though, is that advertising

won’t be all that important to digital broadcasting. It will be all

about subscription and pay-per-view, which will continue to fragment

viewing and take audience away from advertising media. It’s not going to

be a big medium in the foreseeable future but it will still contribute

to airtime inflation.’



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