Digital television has just had a pretty shaky week. We had the
European Commission telling British Interactive Broadcasting - that’s
the interactive bit of BSkyB’s proposed digital satellite service - that
it would probably contravene competition rules. The reason? Sky’s
partner in BIB is British Telecom.
Both Sky and BT are dominant in their respective markets - too powerful,
the Brussels bureaucrats argue, to be allowed to control technological
access to the whole digital television medium.
Digital satellite without interactivity is just more satellite TV.
Better quality pictures, no doubt, but more satellite TV all the same.
Those with dishes already have multi-channel TV coming out of their
So, a delay to the launch schedule is inevitable. Box manufacturers
aren’t going to churn out the equipment until the issue is settled.
BSkyB insists that it soon will be - in time for a pre-Christmas launch.
Many observers remain sceptical, believing spring 1999 would be a better
bet. Meanwhile, as the City becomes nervous about the size of the
project, BSkyB’s share price has been suffering.
Interactivity isn’t as important a selling proposition for digital
It’s just as well really because the terrestrial decoder boxes won’t
offer interactivity - for the foreseeable future at any rate. But it
isn’t exactly going to be plain sailing for the British Digital
Broadcasting terrestrial franchise consortium led by Carlton and Granada
- as evidenced last week when BSkyB demanded payment of the pounds 70
million it is owed. The money is compensation for the fact that BSkyB,
which was part of the proposed consortium in its earliest incarnations,
was forced to pull out after warnings that its presence could be
The wrangle helped to remind the marketplace that BDB remains something
less than the sum of its parts. Channel and programming line-ups remain
Chatting about the theory, as we did last year, was all very nice - but
aren’t we starting to realise that the reality is going to be rather
less than impressive?
David Cuff, the broadcast director of Initiative Media, doesn’t
underestimate the potential hazards of the enterprise. ’Substantial
losses will be incurred, especially in the short term. That’s why the
pounds 70 million is so important to BSkyB. The biggest impact on the
media environment will be the drain on resources across the sector. The
BBC we don’t particularly care about - loss of audience will be a good
thing from our point of view, but it will make a dent in the profits of
Granada, Carlton and Sky. There will also be a draining of talent from
mainstream television - where the audience is - into pinhead TV. On the
positive side, with Carlton and Granada’s attention focused here,
Richard Eyre might feel unhindered at ITV.’
Cuff argues that digital in any of its formats won’t accelerate the
current growth trend in multi-channel television - which, he predicts,
will experience the same slow build as all new audiovisual products,
including colour TV, in the UK.
Others disagree. Simon Rees, the deputy managing director of TMD Carat,
believes there should be no cause for pessimism about digital. ’If you
believe the political will exists to switch off terrestrial analogue by
2010, digital has to get off the ground, it’s as simple as that,’ he
But there is a growing realisation that, with digital terrestrial at
least, this isn’t going to be a conventional media launch. The analogy
with other high-profile launches, such as Channel 5 or even Sky TV,
doesn’t work. BDB will only really manage the transmission platform and
the subscription systems. The channels will be branded as per their
suppliers - Carlton, Granada, Flextech and Sky, which still retains a
five-year programming contract with the venture.
And last week, there were mutterings when some agency people realised
that there would be no central BDB digital sales team. They were rather
perplexed. Martin Bowley, the chief executive of Carlton UK Sales,
believes that they shouldn’t be. He states: ’I don’t think there is any
need to introduce yet another sales operation. Digital is another form
of transmission for our programming. They should be aware of that. I
think it’s the job of agencies to embrace the multi-channel environment
on behalf of their clients.’
Tony Wheble, Flextech’s vice-president of advertising sales, agrees.
’Maybe we should be making more effort to educate some agencies about
this. If, say, UK Gold is part of the BDB package, that provides a
larger potential universe for the channel. And I think it will. We have
to look at why many households haven’t yet decided to take up
multi-channel television but I’m sure they will understand that digital
is the future. But from a sales point of view, we have no preferences
about distribution systems here.’
In a broader context, it’s not quite as straightforward as that. There
will surely be problems in trying to market the DBD digital transmission
system and the decoder box separately from channels and content. Isn’t
that going to be a tough prospect? Not necessarily, Mark Palmer, head of
communications strategy at BMP Optimum, counters. He uses a retail
analogy: ’People don’t go about saying, ’Isn’t Sainsbury’s confusing
because it has both Heinz and Crosse & Blackwell on its shelves?’ It’s
just something that has to be got across.
It’s sometimes depressing that the advertising industry can be so
We should be keen to learn. We so often reduce things to matters of
coverage and frequency and conventional media and advertising thinking.
At this stage, how they intend to sell airtime is not important.
Instead, we should all be embracing the notion that we are at the start
of fundamental changes to the pattern of television consumption.
’What is important is that we are talking to clients about what the
business implications of digital are. And I think terrestrial digital
will have a significant impact. Multi-channel access won’t be the only
issue but I still think that people will see BDB as the easiest way to
add more TV from the media brands they already know.’