ITV companies agree to launch joint digital services

ITV companies have agreed in principle to launch joint services for digital terrestrial television (DTT), industry sources said last night. The agreement, reached in a council meeting attended by representatives from all ITV companies, will provide an added boost to the Government's plans to encourage the launch of DTT from 1998, as outlined in the current Broadcasting Bill.

According to sources, the ITV companies are considering establishing a new corporation - which some have dubbed ITV2 - in which all the franchise- holders would own shares. This would be used to develop an ITV presence in digital television but would avoid the logjams and inefficiencies that currently dog the "federal" ITV network system.

The existing ITV companies are guaranteed space on the DTT spectrum, and will be required to "simulcast" their existing offerings for several years, until analogue is eventually phased out. In addition, they will be allowed to use excess capacity for other services, and to bid for further capacity as they wish, subject to licence terms reached with the Independent Television Commission, the commercial TV watchdog.

It had been believed that some ITV companies were dragging their feet on DTT, in light of concerns over the cost and the timing. It is expected that the switch to digital could run into billions of pounds, and it is not yet clear whether there is strong consumer demand for an extended range of TV programming.

But members of the ITV network have been convinced, at least in principle, that the move to digital terrestrial TV is worth exploring. If they decide to create a corporate structure rather than retain a federal arrangement for the new services, some ITV companies are convinced that the move will be far easier to manage. "We have seen in the past how difficult it has been for ITV companies to co-operate," a senior executive at one franchise said.

One problem in the past has been conflicting strategies. For example, Yorkshire-Tyne Tees has been sceptical of the attractions of cable, while other ITV companies, notably MAI and Carlton, have already made investments in non-traditional TV. Michael Green's Carlton bought cable channel SelecTV earlier this year, while MAI has invested in Rapture, a small cable programmer aimed at the 12-20 age group.

Granada has made the biggest investment to date, establishing a joint venture with BSkyB, the satellite broadcaster owned by Rupert Murdoch, to launch up to eight new channels by next year. These could form part of a package offered by Sky starting in the autumn of 1997, as part of a digital satellite service compromising as many as 200 channels.

Sam Chisholm, chief executive of BSkyB, has said the new digital service would be open to all broadcasters on a "fair and equitable basis." It is expected that the BBC, which yesterday unveiled its own blueprint for the switch to digital, will seek satellite slots for its own proposed digital services.

It is understood, however, that the ITV companies are not prepared to join the Sky digital network. "I think it is highly unlikely that we would want to take part," an ITV insider said.

However, the commercial TV companies are likely to look at taking space on digital cable, which might be launched by the turn of the decade.

Channel 4, which has been talking to both the BBC and the ITV about digital services, has yet to take a decision.