Outlook: Digital wars

THE COUCH potato's dream is about to become reality - a digital TV channel that allows the soccer fan to chose the camera angle and instant replays. And all brought to you by those cuddly folk at BSkyB.

Murdoch's men are not content, however, with first mover advantage in the pay-TV war. At yesterday's press conference they were planting anti- OnDigital questions with reporters in an attempt to undermine OnDigital's claims to have 247,000 subscribers. It all turned out to be nonsense, of course, but further evidence, if any was required, that this is a game that will be played hard and dirty.

That BSkyB feels threatened by its smaller rival is intriguing, given the way that its digital subscription levels are soaring. It just goes to show how easy it is to sell something when you are giving it away for free.

Since Sky pressed the button on its set-top box giveaway, demand has trebled giving Sky more than 1 million digital subscribers two months earlier than expected. Its churn rates are coming down, more than half its digital subscribers are pay-TV "virgins" and Sky is now talking about switching off its analogue signal a year earlier than expected, in 2001, and possibly even before that. It helps of course, that OnDigital has no unique selling point in terms of content. But its broader reach - with no need for those unsightly satellite dishes - could yet prove a key benefit.

If the Government announces a switch-off date for the analogue signal some time soon, digital television will start to become a mass-market phenomenon. Sports organisations like the Premier League, which want to reach huge audiences with pay-TV events, will start to find that attractive.

This is a key reason why Sky, whose content is mostly acquired rather than owned, is placing increasing emphasis on developing its own stable of programming rather than just being a distribution channel. This battle ain't over by a long way.