Sky reveals pay-TV plans for Freeview

by Emma Barnett, Media Week 02-Oct-07

Sky has unveiled its plans for a pay-TV service on Freeview.

Branded Picnic, it will incorporate broadband, fixed-line telephony and
premium TV sport and film content.

The new service requires the go-ahead from media regulator Ofcom and no
pricing structure has yet been announced. Customers will require a new

set-top box, which will eventually use MPEG-4 technology, allowing the

launch of further channels, including Sky News, and broadcasting in high
definition.

Sky announced in February that it intended to replace its free-to-view
channels on Freeview - Sky News, Sky Three and Sky Sports News - with a
pay-TV DTT service. The Picnic service will offer Sky Sports 1,
broadcast 24 hours a day, Sky Movies, airing a selection of recent and
library films from 6pm to 6am, and Sky One, airing from 7pm to 6am.
During the day, Sky Movies will broadcast children's content and Sky One
will air factual content.

Customers will be able to define the services they want in their Picnic
package.

Ofcom's assessment of Sky's plans to vary its Digital Programme Service
is due to be concluded in the early part of next year. A Sky spokesman
said: "We are not assuming anything. All we are doing is providing an
update on our plans."

Alan Flitcroft, head of media and entertainment at Ernst and Young,
said: "These plans are good for the Freeview platform. More choice for
the consumer is good and, after all, they don't have to buy these
packages - it's just that the choice is now there. The alternative is to
ban Sky from putting out its product on Freeview and charging for it -
and that's not very fair either."

Numis Securities media analyst Paul Richards said: "You can argue that
Sky is extending competition and the range of services available. But,
equally, you can see why the move warrants investigation. It's not black
and white - it's very much shades of grey."

Sky released the details of Picnic on the same day Virgin 1, the
entertainment channel set to rival Sky 1, was launched by Virgin Media
TV.