Can TV's newcomers make money?

Hardly any broadcasters are making money out of niche pay-TV channels in the UK. So why are so many piling in? Granada Sky Broadcasting was launched yesterday with seven new services. The BBC, in league with Flextech, wants to add eight by next summer, including arts, entertainment, documentaries, music and the like. Others lie waiting in the wings.

Do we really want all these television services? More to the point, can they achieve any kind of commercial viability? Can there, for instance, really be a market for three lifestyle channels - Daily Mail TV's lifestyle channel, UK Living (also lifestyle), and Granada Life (you guessed it, more lifestyle)?

There are, however, reasons for investing in pay-TV now, even if the pickings seem thin. First, when the digital revolution strikes, there will be huge numbers of channels vying for our attention. Quality, recognised brand names and uniqueness may be the best selling points.

But how to stand out among all the audio-visual clutter? One way is to launch now, in the relatively uncrowded world of analogue, where maybe 40 channels are seeking eyeballs. Thereafter, the audiences may stick by when the digital era dawns.

The argument is particularly true for the BBC. The country's largest archive of programmes and its world-beating brand make it potentially a very strong player. Certainly Flextech understands the appeal, and is willing to spend as much as pounds 200m to develop the new pay-TV services.

All these channels can expect, for now, are the crumbs from the groaning table at which Rupert Murdoch's BSkyB feasts. These new channels will wither on the vine if BSkyB's near-monopoly in analogue pay-TV is not restrained from migrating into the digital world. By the same token, they offer the prospect of development of a real second force in pay-TV to counterbalance the monopoly power of BSkyB.