The BBC is currently holding talks about the possibility of launching a free-to-air digital satellite service to rival BSkyB’s proposed package of more than 200 television and radio channels.
It is understood that the Corporation is in negotiations with a number of other broadcasters about launching a service to go head-to-head with the satellite package unveiled by BSkyB chief executive, James Murdoch, last week (see
BSkyB To Drive Digital Demand Through New Initiatives).
BBC director of marketing, Andy Duncan, said the launch of a rival satellite service was one of the options currently being considered by the Corporation. However, the talks are not thought to include ITV, which spent more than £1 billion on its failed ITV Digital offering.
According to a report in the Independent on Sunday, Duncan, who oversaw the launch of the BBC-backed Freeview platform, said: “If there is competition in these areas, it’s good for consumers in terms of pricing and choice.”
He also emphasised that the BBC is talking to BSkyB about how the two might work together on the new free-to-air satellite offering, which is due to launch later this year for a one-off payment of £150 for the purchase and installation of a Sky digibox.
The BBC and a range of other broadcasters had been in talks about forming a consortium with BSkyB to launch the satellite service, but BSkyB decided to go it alone. Duncan said: “We are in discussions with BSkyB about how we might work together. We would bring our brand credibility and support and could link the venture to a public service marketing campaign.”
The new free-to-air satellite offering looks set to significantly boost the Government’s chances of turning off the analogue signal by the current 2010 deadline. The latest figures from Ofcom show that the runaway success of Freeview helped push the total number of UK households with digital access to just over 13 million in the first three months of this year (see Multi-Channel Television Statistics Q1 2004).
Last week, Gavyn Davies, ex-chairman of the BBC, gave a lecture to the Said Business School. This included a short speech on competition in the TV market and gave his opinion on how he expects Sky, ITV and the BBC to perform over the next few years.
He said: “Sky is becoming a colossus compared to ITV, which now exhibits a business model, which is clearly under threat. ”
Davies added that the importance of the BBC as a public service broadcast will increase as ITV’s viewers share falls, questioning whether advertisers will pay premium rates for access to a declining minority audience. He said: “The only way in which ITV has been able to stabilise its revenue in the face of these plummeting audiences has been to increase its advertising rates substantially.”
Speaking of Sky he said it has out-stripped everyone, including the BBC and Britain needs to ask itself whether it wants Sky to be so much bigger than anyone else, including the BBC, in a few years time.
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