ITV Digital’s future is likely to involve partnerships, according to Carlton chief executive Gerry Murphy, but to what extent they will be with rival BSkyB is still not clear.
At the release of Carlton’s full year results yesterday (see Carlton Losses Mount As More Jobs Go), Murphy spoke of the Government’s digital action plan as “encouraging” and went on to say: “[It] should help ensure that digital terrestrial television will become the principle means by which viewers will receive free digital television channels.” He went on to say that ITV was working with other free to air broadcasters to achieve this.
The question of whether BSkyB could also form a partnership is unresolved. It is thought that Granada may be keen to hand over management of the ITV Digital 1.2m-strong subscriber base to Sky, but Carlton is thought to be less happy with the idea, partly due to the potential regulatory problems this could cause. However, some co-operation between Sky and ITV Digital already exists, in the form of the trading arrangement which sees Sky channels carried on ITV Digital and the recently forged agreement to put ITV1 and 2 on Sky. It is also thought that Murphy doesn’t dismiss the significance of Sky’s power in the market.
In any case, the likely way forward for ITV Digital, the possible closure of which has always been denied, seems to be offering an entry level version of digital TV, giving free channels for low cost, which would hopefully tempt users to upgrade later. Murphy’s statement yesterday confirmed: “We are convinced there will be a large market for light users of pay television and digital terrestrial television is well suited to their needs.” For the sake of ITV Digital’s shareholders, this had better prove true, as both yesterday’s results and Granada’s last week (see ITV Digital Losses Weigh Heavy On Granada) revealed the continuing financial drain of running the venture.
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