BDB in talks to offer Viacom channels for autumn launch

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The Independent Online
British Digital Broadcasting, the terrestrial television group, is in talks with Viacom about offering the US broadcaster's channels, which include MTV and Nickelodeon, as part of its offering when it launches its service in the autumn.

Granada and Carlton, the television groups which each own 50 per cent of BDB, are ready to drop some of the channels they had been preparing to supply in order to make way for the new programming.

The news has prompted fears that this may reduce the value of BDB to its shareholders.

Executives at BDB have become increasingly concerned that its package of channels would not be enough to tempt viewers when the service launches.

When digital terrestrial television is launched in the autumn it will carry 30 channels, 15 of which will be operated by BDB. In its licence application, BDB said that Granada and Carlton would each supply four channels. The remainder would be channels based on BBC programmes supplied by UKTV, the corporation's joint venture with Flextech. The service would also offer Sky Sports 1, Sky Screen One and Sky Screen Two to viewers who were willing to pay more for them.

However, Granada and Carlton may now drop some of their programmes in favour of Viacom's channels. The group operates music channels MTV and VH1 as well as Nickelodeon and the Paramount Comedy Channel.

Michiel Bakker, MTV's European managing director, confirmed that Viacom and BDB were in talks. "They want to make a success of their business," he said. "The line up they presented originally had no familiar channels."

However, analysts now question the value of BDB to its shareholders. They fear that bringing in more programming from third parties will dilute BDB's potential for its owners. Earlier this week, NatWest Markets, the stockbroker, reduced its valuation of BDB from pounds 920m to pounds 200m.

Other observers pointed out that, although Carlton and Granada would suffer by not supplying their own programmes, they would benefit if the entire platform proved more successful as a result of taking on third party programming.

Carlton and Granada may not have to sacrifice their own channels for long. BDB is understood to be keen to take over spare capacity on Licence A, the bundle of digital channels currently reserved for Channel 5 and Welsh language broadcaster S4C. Channel 5, for example, has been allocated three channels but only wants to use one.

Advances in the technology used to compress digital signals may also increase the number of channels available. Nigel Warmsley, the Carlton director who will continue to run BDB until Stephen Grabiner arrives from United News & Media, recently said that he expected the number of channels that the broadcaster could carry would double in just a few years.

Nevertheless, these changes are unlikely to be ready in time for BDB's launch in the autumn.