MEDIA FORUM: Would Sky-BBC digital TV be bad for advertisers? - Should advertisers be concerned that the new digital terrestrial platform may be dominated by a BBC and Sky alliance, Alasdair Reid asks?

You've got to hand it to those cheeky chappies at ITV. It's called phoenixing, apparently - you declare yourself bankrupt and disown any responsibility for the mess you've left behind and then you come back when the coast is clear and try to buy up the (slightly fire-damaged) assets for a knock-down price. Actually, you could argue that it looks more like a monkey than a phoenix, and one rather charred monkey.

Or on the other hand, you could argue the exact opposite. (And let's face it, as the BBC proved last week with its "monkey business Money Programme special, ITV is an easy target these days.) So let's assume just for a second that in applying for the re-advertised digital terrestrial television licences (freed up, obviously, by the demise of ITV Digital) ITV is not trying to pull the classic "under new management, honest guv stroke.

In coming forward with an entirely different proposition, in partnership with Channel 4 and Freeview Plus, run by the former Sky executive, David Chance, ITV has recognised that not only were the last couple of years a complete nightmare never to be repeated but that they've now moved on. So should the world. So, in particular, should the advertising market.

ITV's vision is for a modest, advertising-supported digital platform with a "subscription-lite package provided by Chance. So, unless you're a bankrupt lower league football club, why not just say "bygones and accept that ITV may be the lesser of two evils. Better the devil you know. Because the only real alternative is the BBC with some programming back-up from Sky.

Should advertisers be concerned about the possibility that the new digital terrestrial platform could be dominated by the BBC, not an organisation with the interests of advertisers at the top of its agenda? Bob Wootton, the director of media and advertising affairs at ISBA, says this isn't a simple issue.

"There's good and bad here. Both the BBC and Sky are good companies with good products and they'd make a formidable partnership in terms of broadcasting skills and content. On the other hand, the BBC takes next to nothing in terms of revenue from the likes of us and with Sky, ad revenue is somewhat marginal too. So yes, you could argue that it would be a bitter pill to swallow, he says.

But he adds that the likelihood of its success is conditioned by the quality of the opposition. "I don't see any business reason why ITV should be discounted, though ITV's ability to fall out with other broadcasters would appear to be worrying. One thing is sure - we cannot have another failure. Everybody recognises that the future is about three platforms - terrestrial, cable, satellite - and it's first and foremost about content and keeping the viewer happy."

However, ITV sources are already beginning to counsel against such seeming open-mindedness. The BBC can't be trusted. they say. It's a monopolist attempting to leverage its comfortable licence fee-protected position to protect its position in the digital marketplace - and this will clearly be against commercial TV's interests. More particularly, it will be against the long-term interests of advertisers.

ITV clearly has a lot of work to do. Many sources in the City just can't see the network being allowed anywhere near this again, arguing that it really has blotted its copy book. Lorna Tilbian, a media analyst at Numis, comments: "The Sky-BBC proposal is clearly the only viable one. ITV has failed before whereas the BBC is one of the biggest media brands in the world and it doesn't have to worry about anything as unpredictable as advertising. The BBC will get it."

And if it does, advertisers shouldn't worry, Andy Duncan, the BBC's director of marketing and communications, states: "We would argue that this is ultimately good news for advertisers. We would offer a fresh start for DTT following the technical problems and the failure of ITV Digital, which caused a great deal of confusion about digital.

"We will be offering 29 channels (24 of which will be running at any one time, as some will share frequency allocations), more than half of which will not be BBC or Sky channels. It's not about the BBC's market share, it's about DTT as a vibrant and successful platform that will attract more consumers."

The most important thing, Duncan argues, is to persuade people to buy the box and to do that you have to have an attractive line-up of channels. In particular, a BBC-run platform would replicate the balance between public service and commercial channels traditionally found in the analogue environment.

"It will be a healthy platform and we will be able to promote not just our channels but the whole platform. From an advertiser point of view that will surely increase their options, he states.

Chris Hayward, the TV director of Zenith Media, can see some of the logic in that: "The BBC and Sky might not be working exclusively for the benefit of advertisers but given the costs and given what we saw with ITV Digital you can see why some might regard it as desirable that Sky and the BBC come together to take it on."

Hayward agrees that other broadcasters may not see it that way but he doesn't think anyone's going to be interested if they object purely on the grounds that it isn't in the interests of advertisers. "I think your outlook has to be more flexible these days and the commercial broadcasting sector has to think more clearly about what it has to do to be part of the future. You can do the old tub-thumping and moaning that it isn't fair but Greg Dyke is a very smart operator. I think people should face up to the fact that when he sees an opportunity to move the BBC forward he will take it and it's no use complaining that it isn't fair."

Trista Grant, the managing director of BBJ Media Services, tends to agree: "Just because it has the BBC logo on it, it doesn't mean it will be bad. The advertiser view is pretty clear. The first priority is that we want a strong digital terrestrial platform. Secondly, we want access to increased commercial audiences as a result of that. And thirdly we want to ensure the platform's longevity. We will welcome any companies that come together to offer those three things.

"I think the Sky-BBC approach to their business model will be creative and I can't believe the Government would allow the new platform owner to exclude parts of the audience from advertisers. That would become a highly political issue. But Sky and the BBC can be relied upon to come up with a robust business model - they would be wasting their time otherwise."


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