Last rites for Christmas TV?

As broadcasters bet big on television-on-demand, time is running out for Britain's biggest day of shared viewing. Nick Clark reports

It's the biggest day of the year for television schedulers, but Thursday could be the last Christmas Day on which everyone in Britain watches the same programmes at the same time. As the boundaries increasingly blur between technology, telecommunication and media companies, and mobile phones and laptops can be used to watch videos, the television industry is preparing for unparalleled change.

Ben Keen, chief analyst at Screen Digest, said: "There is a shift in the way viewers engage with television, as they use different devices and via different formats. Broadcasters have to react to this. It is no longer about providing one linear channel; they have to engage with their viewers as much as possible in as many different ways."

The internet is the key to the industry overhaul. "The holy grail is to take the potential of internet distribution and online video to televisions. Getting to that screen will be increasingly important," Mr Keen said.

Erik Huggers, the BBC's director of future media and technology, highlighted a change in viewing patterns at a speech last month: "The situations we're seeing are interesting. Mum and dad are watching linear television in the living room but kids are watching in a different way... on the iPhone, iPod Touch or laptop."

The digital revolution was driven by Freeview which launched in 2002 as a single, free-to-air platform that brought hundreds of channels to UK viewers for the first time, via a set-top box.

With the onset of catch-up TV over the internet and on-demand services from companies such as Virgin Media, the next generation of Freeview is in the works to dramatically boost the service to households across the country.

The BBC, ITV and BT announced Project Canvas earlier this month – and have encouraged rival broadcasters and internet service providers to join – a move aimed at creating an industry standard for content delivery.

Canvas is designed to harness the internet and bring it into the living room, which broadcasters see as a crucial development in the next few years. Michael Grade, the chief executive of ITV, said the plan was to bring "catch-up from the PC to the TV set in your living room, and all for free". This follows the phenomenal success of the iPlayer, the BBC's online platform, which pulls together the previous week's programmes for free.

The iPlayer was the most visited television website in November as viewers caught up on programmes including Doctor Who and Top Gear, according to research firm Hitwise UK. After a few initial hiccups, its traffic has leapt 14 times in the past year, and has had nearly 252 million requests for programmes. This is part of a wider trend that has seen traffic to video sites jump 48 per cent in the past year.

Sky and Channel 4 also provide online services, while Apple TV allows viewers to pay for content.

Other providers including Virgin Media and BT already offer on-demand programming, but as a "closed service" that they choose. Canvas will be the first countrywide operation to provide "open internet" to households.

The BBC's Mr Huggers said: "Understanding more about the success of the service, the sort of users, when they watch it and what they watch, I think the BBC is absolutely betting on the internet protocol in a way where it's not just the distribution side of what the internet enables."

So far viewers tend to access the service on the PC, which accounts for 85 per cent of viewings. Others use games consoles such as the Nintendo Wii, and the Apple iPhone and iPod Touch to view iPlayer.

Another plan to provide content over the internet is Project Kangaroo, the proposed online joint venture between Channel 4, ITV and the BBC's Worldwide arm.

It is a service set up to be complementary to the iPlayer and plans to carry a large back catalogue from all three broadcasters. It is to offer video on demand, when the programmes have expired from the iPlayer's catch-up service.

Kangaroo hit a severe stumbling block earlier this month when the Competition Commission said the platform would hurt competition. It has called for change, otherwise it will block the scheme.

On Friday, the partners proposed scrapping its plan to sell shows to rivals to address some of the issues raised by the industry watchdog, but fears remain whether the project will ever become a reality.

This comes at a time when broadcasters are coming under huge pressure, and have been hurt by the downturn in advertising. Channel 4 predicts a £150m funding deficit by 2012, while ITV is looking to cut costs.

Tudor Aw, a partner in KPMG's media and telecoms team, said: "The death of linear television has been greatly exaggerated. But the supply and demand has shifted. Companies need to find a new equilibrium. They are stuck in the mindset of old business models."

Alex Connock, chief executive of Ten Alps, a diversified media company, said: "There is no death of mainstream television. What counts now is the brand."

On demand : Everything you need to know about catch-up TV

*What is it?

Television on demand allows viewers to access their favourite programmes when they want and often where they want. On demand is provided either via the internet or through a service provider direct to a customer's TV.

*Who provides online services?

The BBC's iPlayer is the most popular, offering much of the content shown on Auntie's channels over the previous seven days. Of the terrestrials, Channel 4 has its 4oD platform, and ITV has the ITV Player, which shows content from the previous 30 days. Sky Anytime provides catch-up content for subscribers.

*How do I get content on my computer?

A broadband connection is crucial for online on demand. Some of the providers require applications downloaded to their computers. Your PC will normally need to have Windows XP or Vista installed, plus Windows Media Player 10.

*What if I'm a Mac user?

Bad luck if you want Channel 4's content, but just days ago the iPlayer announced its downloading service will be extended to Mac and Linux computers. Streaming has been available for a year.

*How long does online on demand take?

For streaming programmes, the service works almost immediately. To download, it all depends on the speed of the broadband. The latest 50mb takes three minutes for a two-hour movie. It takes up to two hours for a 2mb connection.

*What about on demand through my television?

Certain providers offer programmes on demand, which varies between free and paid-for content. The system is similar to renting from a video shop, although the entire transaction takes place via the remote control.

*Who provides it?

Virgin Media, BT Vision and Tiscali TV are the principal providers. Subscribers can access on-demand television programmes, however the content is purely down to the company's discretion.

*How much does it all cost?

It depends. iPlayer is free, while other online providers charge for some content. On Virgin, much of the content is free, but some shows cost 99p and movies can cost £3.75.

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