British Digital Broadcasting targets 1 million viewers

British Digital Broadcasting (BDB), the new terrestrial television company launched yesterday by Rupert Murdoch's BSkyB, Granada and Carlton, is aiming to capture at least 1 million subscribers in its first three years, provided it wins the right to begin services from next summer.

The new television grouping will also provide the BBC with a lucrative platform for its venture into subscription television with Flextech by taking four of the joint venture's channels at premium rates.

As news emerged of BDB's bid for three of the four "multiplexes" or blocks of frequency being offered by the Independent Television Commission, shares in the three companies soared. Each will have a one-third stake in the company and will share evenly in its pounds 300m investment programme to get the terrestrial digital service up and running.

However, BDB is facing competition from Britain's third biggest cable operator, the US-owned International CableTel, which has formed a rival company, Digital Television Network (DNT), to bid for the same three multiplexes. DNT is promising a top class line-up of film, sport, entertainment, money and factual channels with the back up of ITN, Hollywood studios and specialist producers.

The cable industry also served notice that it could mount an objection to BDB's programme line-up on the grounds that BSkyB was offering its channels in a way that discriminated unfairly against cable television companies.

The three television companies behind BDB have been preparing their bid for four months, after Rupert Murdoch at BSkyB, Granada's Gerry Robinson and Carlton's Michael Green came together in a "meeting of minds" last autumn. Together they pose a formidable combination. Carlton is Britain's biggest terrestrial television company owning the Carlton, Central and WestCounty television franchises. Granada owns London Weekend Television in addition to its own North-west franchise and BSkyB is the world's biggest pay satellite TV operator with 6 million subscribers.

BDB will offer 15 pay channels - 12 of them in a basic subscription package and three premium subscription channels: Sky Sports, the Movie Channel and Sky Movies. Analysts estimate that the cost of the basic service will be pounds 10-pounds 12 a month while the premium channels are likely to cost another pounds 3 each.

It has yet to be decided whether the Sky Sports channel will automatically show live Premiership football action, prompting speculation that its launch on digital could coincide with a new pay-per-view deal with the leading clubs.

Nigel Walmsley, director of broadcasting at Carlton and one of BDB's six directors, refused to be drawn on its detailed business plans. But he said that the company aimed to be in profit after five years and would market aggressively to bring in subscribers who do not yet take pay television.

"Our plans are based on the three-quarters of British homes that do not have subscription TV. That is a market of 16 million homes which means there are an enormous number of people who could be drawn to multi-channel viewing by digital terrestrial television."

BDB hopes that viewers will be attracted by not requiring a satellite dish or a new set to receive digital television - just a "plug in and watch" set-top box which is expected to cost about pounds 200-pounds 300. Eventually, televisions incorporating integrated digital technology will be available, costing only pounds 200 more than conventional sets. Mr Walmsley said: "We are satisfied that we can deliver the equipment that is needed at the time and in the volumes it will be required."

BDB said that, if successful, it could start serving over 70 per cent of the population from the middle of next year, rising to 90 per cent by the end of 1999.

Comment, page 23

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