ONdigital Returns Fire In DTV War
Digital terrestrial television broadcaster, ONdigital, has today fired a return salvo against its rival, BSkyB, with the announcement of a range of incentives for consumers to buy into the ‘TV revolution’. The most significant of these are plans to offer customers free set-top boxes as from this Friday 28 May, when they sign up to ONdigital for twelve months.
This move by the Carlton/Granada-owned company is a direct reaction to BSkyB’s aggressive promotions which were unveiled at the beginning of the month (see Digital TV War Intensifies). During May ONdigital had been offering customers a free set-top box with the purchase of a television worth £200 or more; this offer was then extended to any electrical appliance worth £200. However, Sky’s totally free set-top box clearly increased the pressure on ONdigital to match the offer. Also following Sky’s lead, ONdigital has struck a deal with BT to offer customers 40% off all standard telephone calls, beginning in July.
Like BSkyB, ONdigital has been forced to increase the basic cost of subscriptions, by £2, in order to part-subsidise these offers. Subscriptions are available at £6.99, £9.99 and £11.99 per month – premium channel costs remain unchanged. Existing customers’ subscription rates have been frozen until 2002. However, ONdigital has decided to drop its one-off connection charge of £20.
In association with electronics manufacturer Bush, ONdigital has also announced that integrated digital television sets (iDTVs) are now available from £299 to ONdigital subscribers. Previously, iDTVs were expected to sale at around £500.
With these new initiatives, and an investment of £200 million over the next two years, ONdigital expects to attract two million subscribers within three years. Chief executive, Stephen Grabiner, says: “Today marks the beginning of the end of analogue TV. More than 30 channels of television with no dish, no cable, no connection and no up front costs. Free boxes and low price digital televisions are now available to all.”
Sky this morning reacted to ONdigital’s announcements by saying: “This move is an entirely expected response to Sky’s initiative, announced earlier this month. Now that the cost of hardware has been removed, consumers will have the chance to make a direct comparison between the content and services offered by the two digital providers. We relish this prospect.” BSkyB adds that it is confident that customers will see greater value in its Sky Digital service. Sky’s offers come into play on 1 June.
The moves by ONdigital come as the Guardian this morning reports that the Independent Television Commission (ITC) is urging the Government to consider ways of aiding digital terrestrial TV’s uptake. The paper reports sources as saying that the ITC is concerned that ONdigital is facing an unequal struggle against BSkyB and the rapidly consolidating cable industry. The Government is keen to get digital terrestrial TV up and running so that it can sell off the broadcasting frequencies made available by an analogue shutdown.
According to the latest official announcements, ONdigital had claimed 110,000 subscribers by the end of March 1999 (see ONdigital And Bush Offer Digital TV Sets For £500). Sky Digital had 350,000 digital satellite customers by the end of January, of which around 130,000 were brand new Sky subscribers.
At 1:30pm today, shares in Carlton were up 16˝p at 544˝; Granada was up 13p at 1,232p. BSkyB stock was up ˝p at 586p.
ONdigital: 0171 819 8000