Channel 5 seeks satellite space

Channel 5 Broadcasting is planning to bid for newly available space on the Astra 1A satellite, spending up to pounds 6m a year to extend the coverage of Britain's last "free" terrestrial TV service. If successful, Channel 5 could reach an additional 1 million homes in the UK.

But the company, owned by Pearson and United News & Media, will have to offer a competitive premium to win the satellite lease, in the face of fierce competition from other broadcasters.

The lease for the satellite transponder is being offered by Nethold, the Dutch-based broadcaster, which is moving one of its channels to a competing satellite service, Intelsat.

According to sources close to Channel 5, BSkyB, Rupert Murdoch's pay- TV giant, will "assist" in securing the lease, using its long-standing ties with Astra, the leading European satellite system. BSkyB, a major Astra client, uses the satellite to transmit its own pay-TV channels in the UK.

BSkyB and Channel 5 are negotiating ever-closer ties, which are expected to include joint programme acquisition and cross promotion. The co-operation pact is being pursued by David Elstein, chief executive of Channel 5 Broadcasting, who left his job as head of programmes at BSkyB last month.

If the company gets the satellite lease, it will be able to broadcast the Channel 5 signal to 100 per cent of direct-to-home satellite homes in the UK. That would help extend the coverage of the service, which will reach about 80 per cent of UK homes through conventional terrestrial transmission.

Mr Elstein has set a priority on securing the widest possible coverage for the new Channel 5, scheduled for launch early in 1997. A successful lobbying campaign recently led to the release of an additional frequency for the transmission of the channel, taking the total to 80 per cent from just over 70 per cent.

With satellite, it is estimated that an additional 1m homes will receive the signal in areas where the conventional signal is not available. In addition, Channel 5 hopes to encourage cable operators to carry the service, particularly in the south of England, where through-the-air television reception will be patchy.

It is understood that Travel, the UK cable channel, and Flextech, the cable and satellite packager, are also interested in bidding for the Nethold transponder.