MEDIA: Digital TV: a turn on?

Digital terrestrial TV (DTTV) hit the headlines last week as the deadline for bids closed, but the advertising industry has a mixed view on the opportunities the new service will provide in terms of ad revenue and marketing.

Digital terrestrial TV (DTTV) hit the headlines last week as the

deadline for bids closed, but the advertising industry has a mixed view

on the opportunities the new service will provide in terms of ad revenue

and marketing.



With the creation of over 30 new channels, advertisers will be faced

with further audience fragmentation, which could force the larger FMCG

advertisers to put their money elsewhere in their efforts to target

consumers.



Christine Walker of Zenith Media believes that when the technology

becomes available in late 1997 it will be ’a slow-burn effect’ in terms

of take-up - similar to the growth of satellite television.



’Digital TV will present opportunities, but primarily for the

broadcasters.



I can’t imagine the large FMCG advertisers increasing their spend. In

fact, the evidence is that they are decreasing their budgets and putting

it in-store,’ she said.



Taking the long view



However, digital TV will present better targeting opportunities as it

becomes more sophisticated, with advertisers able to exploit integrated

marketing opportunities through interactive TV.



Mandy Pooler, managing director of The Network, said: ’It will attract

more advertising revenue, taking revenue from traditional direct

marketing and possibly press, because you will be able to advertise on a

more local basis.’



There are still three-and-a-half multiplexes to be allocated by the

Independent Television Commission, and the decision will be made in the

spring of this year.



The British Digital Broadcasting (BDB) consortium (Carlton, Granada and

BSkyB) is seen as a clear favourite.



Its rival, the Digital Television Network (CableTel/NTL), is the cable

industry’s bid for a digital presence. Cable knows that the dawning of

the digital age in the UK could deal it a shattering blow, as it still

lags badly behind satellite television.



The BDB consortium is bidding for 12 channels in a basic subscription,

plus three premium subscription channels. DTN is offering 20 TV and data

services (text-based) channels which will include pay-per-view,

specialist channels and services such as home shopping.



S4C has bid for the other half of the multiplex upon which it is a

guaranteed place provider. It is proposing five channels, including a

channel from Turner Entertainment and Time Warner.



Pooler points to the marketing muscle of BDB. The consortium’s bid also

includes involvement from the BBC, which will be paid by BDB to provide

channels. ’It’s a very powerful line-up, not simply because of the

broadcasters - look at the Granada rental side and Sky’s huge customer

database,’ said Pooler.



Most advertisers, although dazed by the array of new advertising

opportunities, are optimistic about the benefits of digital terrestrial

TV.



Robert Bartlett, executive director of Wella, said: ’There will be more

choice. There will be more opportunities for better targeting, less

media wastage and, hopefully, cheaper advertising rates.’



Catching customers



A source close to Sky said digital terrestrial TV opens up a new

customer base hitherto inaccessible to satellite and cable

operators.



’It gives us the option of marketing to those who have resisted

satellite due to snobbery. DTTV will allow us to market to those who do

not want all of the multi-channels.’



Just under a quarter of homes have cable and satellite TV. DTTV’s task

is to persuade the remaining three-quarters of UK households to invest

around pounds 200 each in a set-top box and pay subscription fees for

the new channels.



BDB says it will win one million subscribers in the first three years,

and aims to make a profit after five years, if its bid is

successful.



Sharing the cake



By the end of 1998 there could be around 30 new digital terrestrial TV

channels.



Each ’multiplex’ carries up to six stations and will be split into the

following:



- The BBC has one multiplex which will carry BBC1, BBC2, a 24-hour news

service and other BBC services.



- ITV and Channel 4 share a multiplex which will broadcast their current

channels plus two additional channels.



Teletext Ltd also has guaranteed capacity.



- Half of the third multiplex is split between Channel 5, S4C and Gaelic

programming in peak hours in Scotland.



- The remaining three-and-a-half multiplexes are available and licences

will be awarded in the spring