The whole Sky on Freeview situation has become quite complicated, and it hasn’t been made a great deal clearer today.
To recap: back at the start of February, on the day that Virgin Media launched, Sky announced that it wanted to launch it’s own DTT platform. Sky is a part of the Freeview consortium, and has had three channels on the service since it launched – Sky News, Sky Sports News and Sky Three (previously Sky Travel).
Sky planned to replace those three free-to-air channels with four subscription channels. To get four channels out of the space used by three, they wanted to adopt MPEG4 technology rather than the older less-efficient MPEG2 technology currently used by Freeview boxes. This would mean that none of the current 8 million or more boxes on the market would work with the new service. Sky would launch its own box with its own encryption.
The obvious reason for this sudden interest in Digital Terrestrial Television (DTT – the generic name for “Freeview” channels) was almost certainly because upstart sports channel Setanta had leased space to broadcast its service on Freeview using encryption technology supplied by Top-Up TV.
Hope you’re keeping up!
Top-Up TV is a service that allows subscribers access to a limited amount of programming from additional digital channels not currently available on Freeview. It does this using a PVR device allowing viewers to watch previously recorded programmes. Crucially, a significant proportion of Freeview boxes in the market have slots for Top-Up TV encryption cards, and so can also be used to serve Setanta customers.
With football rights having to be divided into more at least two packages following a European ruling, Setanta has picked up some Premiership football – albeit the poorest package – and was going to be in an exclusive position to offer DTT customers access to those games.
By making this announcement, Sky wanted to be in a position to offer an alternative to DTT customers. The feeling was that the four channels Sky would offer would have been Sky News, Sky One (including all that expensive programming that’s just been made unavailable to Virgin Media subscribers) and something like Sky Movies Lite and Sky Sports Lite – offering a single stream of each strand of programming, almost certainly offering football when played.
Then Ofcom came out with a curious statement. It noted that Sky had announced what it had planned to do, and then pointed out that “it will consult on any such proposals.” In other words – Sky had yet to make its proposals to Ofcom as it legally had to. But should it do so, here are the things that Ofcom was going to consider. These included the benefits of migrating to MPEG4 technology, the detriment a reduction of services would bring to the consumer, the possibility of incompatibility of older boxes with multiplexes using both MPEG2 and MPEG4 technology (as the multiplex that Sky was broadcasting on would then be using) and the overall effect on consumer confidence.
That last point would seem to be especially important since later this year, the first community in the UK completes its television digital switchover with the analogue signal being switched off. And we’re hearing plenty of stories about the failure to understand what this means, with news this week that many landlords and tenants not understanding the implications. And Ray Snoddy rightly highlighting something in this week’s Media Independent that I’ve been shouting about for years. That is, that politicians really don’t have a clue about how big a backlash they’ll feel should digital switchover not be incredibly carefully managed. Snoddy uses the analogy of local elections and voters kicking out councils that drop from weekly to fortnightly bin collections. Seriously – these are the things that really matter to voters. I really hope Gordon Brown keeps a very close eye on proceedings for his sake!
But getting back to Sky and DTT – today saw two further developments. First of all, a story from Marketing magazine (free registration reqd.) claimed that Ofcom had shot down Sky’s request. In particular, the thorny subject was the lack of plurality in news provision with Sky News being removed as a free-to-air service. Mediaguardian reported the same story somewhat differently (irrespective of the comments below the Marketing story), saying that the Sky News provision had emerged as “an issue.”
“There are discussions going on about this but we are miles away from taking any decision,” the Ofcom chief executive, Ed Richards, told MediaGuardian.co.uk.
So what does this mean? Well for one thing, Sky obviously did get around to formally approaching Ofcom – something I’m not sure has been public knowledge up until now. There’s always been a suggestion that the ‘proposal’ was just to act as a spoiler to Virgin Media’s launch while at the same time creating confusion in the Pay DTT market and perhaps causing potential Setanta subscribers to hold off.
Well now we know that they definitely did want to do it, but that Ofcom wants to investigate the matter further.
But my question is this: if Sky News is the sticking point, what’s to stop Sky putting Sky News onto the Freeview platform at all? They don’t offer their premium entertainment channel, Sky One, for free. They could surely replace it with, say, Sky Two. Indeed, it’s widely understood that Sky News is not a money making operation – those Skycopters cost a lot to keep in the air. Is it not possible that James/Rupert Murdoch mightn’t just shut down Sky News if he wanted to? Then what could Ofcom do about it? There’d be no plurality in news provision, but with there no longer being an ITV News channel, what are the options? Hold open a spot for CNN?
I guess we’ll have to wait and see. What’s 100% clear is that Sky’s not going to have a DTT offering in place in time for August and the start of the new football season. That gives Setanta a bit of a head start. Sky can still catch up, and it’s possible that they might work out a way of leaving Sky News on Freeview, but either buying up some bandwidth or compressing their signal down further, to allow it to continue with its plans. I guess we’ll have to watch this space.