Greg Dyke on Broadcasting

Sky football - as seen through the bottom of a pint glass

Next time you are watching a Sky football match in the pub, glance at the bottom of the screen and see if there is a logo depicting a pint glass on the right-hand side. If there is, then the pub is broadcasting the Sky signal legally. If not, take a closer look at the landlord.

Next time you are watching a Sky football match in the pub, glance at the bottom of the screen and see if there is a logo depicting a pint glass on the right-hand side. If there is, then the pub is broadcasting the Sky signal legally. If not, take a closer look at the landlord.

In the decade or so since Sky first won the exclusive contract to broadcast the Premier League in Britain, pub football has become an institution. Thousands of fans now watch the football live in the pub and in many ways the pub has become an extension of the terraces with fans getting dressed up in their team shirts to watch the football while sipping a pint.

Pub football has also become a profitable business for Sky. Some years back Sky had a dispute with the advertising buying agencies that refused to give Sky any credit for the number of people watching the football - and the ads - in the pub. This was largely because the Barb measurement system found it difficult to measure how many there were. So Sky took the decision to broadcast a different signal to the pubs.

This brought two advantages for Sky. First, it meant Sky could sell the pub advertising separately to agencies that knew it had value but couldn't easily measure it. As a result some of the ads in the pubs are different to those you see if you watch Sky football at home.

Second, sending out a different signal to the pubs had another great advantage for Sky; it meant it could put the pint logo on the picture the pubs receive and overnight create an easy way to check whether or not a particular landlord was paying the special Sky pub subscription rate. How much a landlord pays depends on the ratable value of the pub, but it can run into thousands of pounds a year. In these circumstances some landlords inevitably opt for the cheaper, but illegal, option of using their home Sky card in the pub instead.

So by a combination of selling pub advertising separately and charging pub landlords quite large figures for the right to show the signal, Sky has turned pub football into a good business.

This has, however, created a dilemma for Sky: how many potential home subscribers are they losing because of pub viewing? There's no doubt there's a whole new generation of people who don't bother to subscribe to Sky because they can watch the football in the pub and get limited multi-channel television at home with Freeview; that way it costs them nothing. I've seen it with my elder children and their friends - none of whom subscribes to Sky.

The question Sky will have to face up to at some time is this: are they losing more money from potential domestic customers than they are gaining with their pubs business? However, before taking a decision to scrap pub football it should remember the example of ITV Digital who wouldn't let the pubs show its games at all. Not only did it go bust but I never had any problem finding the ITV Digital football in the pubs near me - piracy was rife.

In fact, I wouldn't be surprised if pub piracy is actually going to turn into a bigger problem, not necessarily for Sky but for the Premier League and its clubs. There's one pub near where I live in west London which shows every Chelsea match live, and I am told if you ask around you can find pubs in other parts of the country doing exactly the same with their local Premiership teams.

Obviously this is illegal and the only way this can be happening is that, by some clever means or another, the live feed of the match which is being sent abroad for viewing is being retransmitted back to the UK and pirated. But what it means is that if this trend grows, all sorts of people, including both Sky and the football clubs, are going to start demanding that the Premier League does something to stop it.

Maybe the next time the Premier League rights are up for grabs the league should sell the pub rights to every match separately.

ITV's future is not a pretty picture

You have to have a bit of sympathy for the management of ITV. There they were last week, ready to produce some pretty good financial results on the Wednesday, when suddenly all the papers were full of the news that ITV's audience share for the first two months of 2005 was down a massive 10 per cent, with an even greater reduction amongst young and up-market viewers.

Of course, the good financial results were largely a result of more savings from the Carlton/ Granada merger than the City had expected this year, which is all well and good in the short term, but what happens when the savings from the merger and regulatory changes dry up? Where does the future growth come from?

The decline in ITV's share of audience during the past decade has been dramatic and, as yet, there is no sign of this slowing down. Of course, the launch of ITV2 and ITV3 has helped to offset this a bit, but advertising on these channels is significantly cheaper than on ITV One, so a rating point lost on ITV is worth considerably more than a rating point gained on one of the digital channels.

To paraphrase Bill Clinton, in the end it's all about the programmes, stupid, and if ITV keeps losing share at the rate it has during the past decade, the future has to be difficult.