Broadcasters line up to capture new digital audience

At some point next year, you will start being asked whether you have a set-top box in the same way you were once asked if you had a video and once that question starts arising, we will know digital television is upon us. Cathy Newman looks ahead to what is being dubbed the year of digital TV.

Whether you subscribe to digital terrestrial, satellite or cable television, you will need a box, costing around pounds 200, to unscramble the signals.

First off the block is digital satellite. BSkyB plans to go for a "soft launch" of between 150 and 200 channels next April. Many of BSkyB's initial digital subscribers are likely to be analogue customers who, by being offered a discounted set-top box, will have been persuaded to migrate.

Around 70 channels will be reserved for pay-per-view, where customers pay to watch specific films, sports or musical events. BSkyB has already launched a pay-per-view operation of sorts, although the extra capacity afforded by digital will allow the service to get off the ground in earnest. Cable & Wireless Communications, the biggest UK cable operator, has agreed to take Sky Box Office, the satellite broadcaster's pay-per-view service. Other cable companies - including NTL, Telewest Communications and General Cable - will form their own pay-per-view platform, called Front Row, and have been negotiating with Hollywood studios for film rights.

Roughly 10 of BSkyB's digital channels will be devoted to British Interactive Broadcasting (BIB), owned by BSkyB, BT, Matsushita Electric, and Midland Bank. BIB will provide transactional services, such as home shopping and banking, and other interactive devices.

Digital cable is to get going around the same time as BSkyB. CWC, as part of its pay-per-view deal, has pledged to kick off its digital services at the same time as BSkyB.

However, NTL is one of many cable companies to be coy about launch-dates. It is clearer, though, about what it intends to offer. Jeremy Thorp, group director of digital services at NTL says: "We're very driven by the interactive nature of the technology."

NTL aims to deliver the Internet to the mass-market. Mr Thorp believes cable's capacity will persuade many people frustrated by the Internet's slowness to get online. "Cable can deliver information very quickly down the fibre-optic network." NTL is planning to offer its customers access to certain sections of the Internet - what's known as a "walled garden", as it will filter out undesirable material such as pornography.

NTL will, like BSkyB, have between 150 and 200 channels, although Mr Thorp casts doubt on the satellite broadcaster's promises. "I don't believe Sky will have as many as us," he says.

Other cable companies are approaching the issue of interactivity rather differently. Telewest Communications has not ruled out taking services from BIB instead of creating its own interactive systems, and, as a spokesman explains: "We are concentrating on our core products for digital. Interactive services have a part to play, but cable penetration will not lift immeasurably as a result."

But according to Mathew Horsman, media analyst at Henderson Crosthwaite, interactivity could be the new driver of pay-TV. Where sport and movies - the premium services - have up until now prompted people to sign up to cable and satellite, a new unique selling point needs to be found. "Interactive services will be a driver and could be viewed as the new premium," Mr Horsman maintains.

The six multiplexes - bunches of frequencies - reserved for digital terrestrial television fall into two parts: three for British Digital Broadcasting, the pay-TV group, and three for free-to-air broadcasters. BDB, which is owned by Carlton Communications and Granada, maintains it will kick off in the second half of next year, buoyed by a "substantial" advertising budget. However, as the European Commission has only just granted the consortium its licence, some analysts are increasingly sceptical that the service will launch on time. BDB is focusing on entertainment rather than interactivity, and is offering 12 basic channels and three premium ones.

The involvement of Carlton and Granada in BDB has depressed the two companies' share-prices, as digital terrestrial TV is an unknown quantity. Whereas digital satellite exists in other countries such as the US, Spain and Italy, digital terrestrial is not up and running anywhere in the world. BDB's saving grace, though, will be the Government's determination to switch off the analogue technology and make digital terrestrial work.

As far as free-to-air digital television is concerned, ITV is simulcasting its analogue channel on digital, and is creating a second national service, which will be complementary to ITV.

The BBC, Channel 5 and Channel 4 will simulcast their analogue channels in wide-screen technology. Channel 5, however, is hoping to attract an investor to buy into its spare digital capacity, as it is not keen to spend money on new digital programming.

One of the crucial determinants of the success of digital television will be how viewers find their way around the mass of extra channels. Electronic programme guides (EPGs) - electronic versions of the Radio Times - are being heralded as the answer to any difficulties navigating the multi-channel universe.

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