MEDIA: ONdigital to challenge Sky - Unfazed by supply problems with its set-top boxes, pay-TV company ONdigital remains optimistic about its recent launch and its power to compete with Sky, writes Conor Dignam

ONdigital was upfront about it last week at a series of press conferences heralding its launch. There might be problems with the supply of the set-top boxes, costing pounds 200, which are needed to receive the signal. The company spoke of ’tens of thousands’ being ready and more suppliers expected to come online in January. Philips is currently making them for the new broadcaster at a rate of 2500 to 3000 a day.

ONdigital was upfront about it last week at a series of press

conferences heralding its launch. There might be problems with the

supply of the set-top boxes, costing pounds 200, which are needed to

receive the signal. The company spoke of ’tens of thousands’ being ready

and more suppliers expected to come online in January. Philips is

currently making them for the new broadcaster at a rate of 2500 to 3000

a day.



Stephen Grabiner, ONdigital’s chief executive, refused to put a number

on how many boxes were ready, or reveal any targets. Insiders suggest

that between 70,000 to 100,000 will be available between now and

Christmas.



Getting clever with boxes



Given that the company says it has already had 150,000 telephone calls

from people interested in the service, and that it is spending pounds

10m on a heavyweight launch campaign between now and Christmas, there is

a danger of demand outstripping supply. If it does, it’s not something

that is worrying ONdigital.



’If we sell out of boxes and we’re pushing to keep up with demand in the

run-up to Christmas we won’t be that unhappy,’ says an insider. The

company’s feeling is that if people are persuaded to buy ONdigital, they

will wait a while until a decoder box is available rather than go to a

rival.



ONdigital’s launch advertising, through BMP DDB, uses celebrity duos to

promote the service, bringing together the likes of Jonathan Ross and

Sir Richard Attenborough, Ian Wright and Terry Venables and Chris

Tarrant and Melvyn Bragg.



It is clear that ONdigital, which is jointly owned by Carlton and

Granada, sees ITV as a powerful marketing ally in the pay-TV market. The

ITV franchise owners have seen Rupert Murdoch’s BSkyB dominate pay-TV

throughout this decade. This is their chance to hit back.



All sides involved in the digital battle declare that there is enough

room in the digital market for satellite, terrestrial and cable. But

privately they know that ONdigital and SkyDigital are ultimately chasing

the same consumers - those who up until now have not been persuaded to

buy multi-channel TV.



Rivalry hots up



Of course BSkyB will make money out of digital, regardless of which

delivery system triumphs. Its premier programming, from movies to sport,

is on satellite, cable and terrestrial digital. But BSkyB knows that

movie and sports rights have to be renegotiated, and it has been a

combination of its programming and dominance of the distribution system

that has made it the clear winner in pay-TV up to now.



What is certain is that from this week Sky TV has a real, national rival

in the pay-TV market. ONdigital has managed to do what cable in this

country has up to now failed to: come up with a clear, coherent

marketing message; offer key services and develop a unified brand to

take on Sky.



WHAT’S ON ONDIGITAL?



ONdigital offers 12 primary channels. Subscribers make a choice of six

primary for pounds 7.99 per month or all primary channels for pounds

9.99 a month.



There are five premium channels. Sky Sports 1 (which gives you Sky

Sports 3 free) Sky Premier and Sky MovieMax. Any one Sky channel costs

pounds 11 a month, any two cost pounds 15 a month, all three Sky

channels cost pounds 18 a month. FilmFour is also available for pounds 6

a month. MUTV is available for pounds 5 a month.



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