Not-so-Freeview 

18 June 2010 tbs.pm/1193

The announcement that BSkyB is withdrawing its Sky Sports News channel from Freeview may not be that unexpected but it does raise some interesting unanswered questions in relation to Sky’s future strategy, especially given News Corp.’s paywall experiments and the assertion that Freeview is allegedly now Sky’s “main enemy”.

However this move does have a more subtle yet still anti-competitive element in relation to rival pay-TV services, namely BT’s less-publicised plans to retail Sky Sports 1 and Sky Sports 2 via Freeview digital terrestrial television, making use of Arquiva’s spare slots on Multiplex C and D after digital switchover.

BT has been wise not to fall into the trap of offering only Sky Sports 1 along with another premium non-sport channel such as Sky1 or a movie channel, because one sports channel can easily be subverted by its provider and would provide inadequate coverage at best.

Therefore it’s easy to conjecture that BSkyB’s decision to replace Sky Sports News on Freeview with Sky3+1 may also be influenced by BT’s plans even if there’s now a general corporate policy shift towards paywalls, because it seems fairly certain that Sky doesn’t want to make things easier for BT by effectively handing them three sports channels.

Don’t be fooled by BSkyB’s new alliance with Virgin Media; Sky has simply chosen a long-term rival to “shake hands with” in order to avoid being broken up as a dominant monopoly of pay-TV services as well as earning a bit more revenue on the side.

How BSkyB chooses to respond to the BT threat in the long term will be very interesting, especially when considering the fact that it went to the trouble of creating a whole new pay-TV service (Picnic) as essentially a spoiler for what was Setanta’s UK pay-TV operation, and Sky can no longer reasonably withhold its channels from rival operators.

Then there’s the ITV question, namely what the broadcaster will decide to do in the longer term with channels such as ITV2 and ITV3; will it be brave enough to put them behind a Sky-owned paywall as this (alleged) marketing questionnaire dared to suggest?

If ITV did succumb to the (Sky) paywall temptation then Channel Five will more than likely follow suit, and if Channel 4 were to forget its public service credentials by also offering E4/Film4 and/or More4 terrestrial channels exclusively for a Sky-owned pay-TV service it would be a major blow for free-to-air terrestrial television.

Any creation of a new and potentially dominant terrestrial pay-TV service owned by BSkyB could also raise very serious monopoly issues (even if Picnic seemed to avoid this accusation), especially when assessed in conjunction with Sky’s recent deal with Virgin Media, so this state of affairs may ultimately never happen even if Sky really wants it to.

Of course what happens next will ultimately be decided by content providers other than BSkyB and how desperate they are for cash versus the real risks of being further sucked into a BSkyB monopoly (essentially the driving force behind the creation of ONdigital in 1998); not just for individual channels but for UK broadcasting as a whole.

All eyes will now be on what BSkyB decides to do with Virgin 1 in particular because that may give a small hint as to Sky’s future strategy; we can in the short term expect key Virgin 1 acquisitions to be moved onto channels that are only available to subscribers (if nothing else) because Sky’s general policy is to give as little away for ‘free’ as possible.

Something that’s true even more now than it used to be.

A member of the Transdiffusion Broadcasting System
Liverpool, Friday 29 March 2024