ITV in talks with BBC about
rescue plan for ITV Digital

Jennifer Whitehead,, brandrepublic.com, 07 November 2001, 09:01AM

LONDON - The BBC is again being mooted as the saviour of ITV Digital, as talks between the two are under way which could lead to the corporation saving the troubled digital terrestrial service owned by Carlton Communications and Granada.

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It is the second time the two have been reported to be in talks. In July, the BBC was said to be mulling an investment in ITV Digital. Such an investment would be controversial and would lead to opposition from rivals about whether the BBC should be allowed to use licence-payers' money for this purpose.

One party likely to raise objections would be BSkyB, with owner Rupert Murdoch already objecting to the amount of government involvement with ITV Digital.

The BBC rescue plan would see UK broadcasters developing a set-top box to receive up to 20 free digital channels.

Viewers would then pay for digital set-top boxes to access the free channels, with the option to pay extra for premium services. These could include sporting events or film services.

The advantage of this scheme is that it could save ITV Digital around £100m. The pay-TV company has been giving away the set-top box for free but charging subscribers. However, subscriber numbers have been disappointingly low.

Granada and Carlton have been under pressure from shareholders to abandon the loss-making digital TV service. The companies have said it will take at least another £300m -- on top of the £800m they have already invested -- before the service breaks even.

The BBC is reportedly interested in rescuing ITV Digital over concerns that, should the service go under, the future of digital broadcasting in the UK could fall into the hands of Murdoch's BSkyB, and US-owned cable networks NTL and Telewest.

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