For Broadcast May 7, 2008

YWhen you're fitting in the last piece of a jigsaw, you want to get it right. Michael Grade believes Freesat is the last piece in the digital television jigsaw, and the fact that Sky is not involved in this platform is significant to its potential for success.

This week's Freesat launch is basically the anti-Sky alternative; those TV homes that want to pay once (for the set-top box, satellite dish and installation) to receive a growing group of channels and don't want up-selling to buy premium sport, movies or anything else the pay-TV world might have on offer.

But this is not just Freeview with a satellite dish. Having only the BBC and ITV as shareholders (each is putting £3m a year into Freesat) is meant to help the new service reach the 27% of UK TV homes that can't get Freeview today - as well as the final 3 million or so homes that will never be able to receive the full Freeview suite of channels - instead of leaving them to be served by Sky's version of Freesat, cunningly called Freesat from Sky.

Freesat from Sky is not really "free forever", according to the BBC and ITV. Mr Grade puts it like this: "With this Freesat, you won't get people driving you mad trying to sell you a subscription-encrypted service the minute you've bought it." (Sky says that it offers Freesat from Sky customers the ability to opt out of "upgrade marketing" but they won't say how many people actually take - or understand - that option).

Other differences between the two services are pretty minimal. The channel line-ups look very different - "new Freesat" has only 45 channels plus a lot of regional variations - but the two offers will look increasingly similar as Freesat gets more channels.

The BBC and ITV have learned a big lesson from the launch of Freeview: having a pay-TV company in the consortium of a free TV platform is problematic at best. When Freeview launched, broadcasters - including Sky - threw money into a marketing pot in the hope that a couple of million TV homes might take the DTT service replacing ITV Digital, ITV's pay-TV debacle.

In fact, Freeview became a much larger success and now there are more Freeview set-top boxes in British homes than there are Sky TV subscribers. This "new Freesat" is a waste of taxpayers' money, according to Sky, because it recreates a service that Sky has been running for four years. But new Freesat will help give digital options to homes far removed from Freeview.