MEDIA: Miscalculations in the real costs of a new channel

The news that Channel 5 retuning is going to cost the odd pounds 15m or so more than expected will surprise no one - except perhaps for the ITC which obviously thought its original plans were perfect. The augmentation of the retuning teams based on the trial in Surrey may not be the end of the matter. Just wait until the 7000 retuners in their special security uniforms try to get into the flats of London and United News and Pearson - the other Channel 5 investors may find themselves putting their hands a little deeper in their pockets.

The news that Channel 5 retuning is going to cost the odd pounds 15m or

so more than expected will surprise no one - except perhaps for the ITC

which obviously thought its original plans were perfect. The

augmentation of the retuning teams based on the trial in Surrey may not

be the end of the matter. Just wait until the 7000 retuners in their

special security uniforms try to get into the flats of London and United

News and Pearson - the other Channel 5 investors may find themselves

putting their hands a little deeper in their pockets.



Ironically, Channel 5 now faces a very tight retuning schedule because

of an entirely laudable attempt to link the exercise with the marketing

of the channel. It might have been wiser to just get on with the

retuning and handle the marketing later.



You don’t have to subscribe to allegations of ITV dirty tricks

propaganda to wonder whether the ITC’s requirement that at least 90% of

the retuning should be satisfactorily carried out before switch on day -

January 1 - will be met.



For some unaccountable reason, other bidders for the Channel 5 licence

thought the retuning exercise would be much more difficult and much more

expensive than Channel 5 Broadcasting. But that, after all, is what the

art of writing franchise applications is all about.



In the end though, retuning is not the point. It will be done eventually

at whatever cost. The importance of Channel 5 for the media industry is

much greater than that.



It will, of course, provide advertisers with another stick to beat ITV

with, although ITV sales houses are able to provide compelling evidence

of the importance of mainstream prime-time programmes for reaching even

light up-market viewers.



Programmes stripped across the schedule also ought to increase diversity

for advertisers as well as viewers as part of a five-channel terrestrial

system. The ITC would be failing in its duty if it did not ensure that

all the worthy educational and factual programmes that helped win the

franchise actually turn up on the screen the right side of 3am.



But the real fun of Channel 5 will be to monitor the performance of what

will be the UK’s last national analogue channel, against the launch

later in 1997 of more than 200 digital channels from BSkyB. At last

there will be some pragmatic evidence to confirm or confound the views

of those who see Channel 5 as a ridiculous anachronism. And certainly it

appears ludicrous to spend pounds 70m on retuning video recorders just

to launch one television channel. BSkyB could run 175 channels for a

year or two on such a budget.



To realists the channel represents the most important new media

opportunity in the UK since Channel 4 because of its ability to get into

more homes than satellite can aspire to this side of the year 2020.



And that will apply however optimistic Channel 5’s retuning plans turn

out to be.



Raymond Snoddy is Financial Times media correspondent



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