For Broadcast December 18, 2008

Broadband-connected Freeview is a huge step forward – at a cost.

The walls between the web and TV are well and truly breaking down and last week's decision by ITV and BT to join the BBC in Project Canvas, a broadband-connected Freeview service, is the latest important step. Project Canvas is meant to create a new broadband-connected set-top box that would allow consumers to access both TV and online content for viewing on their TVs. It's Freeview mark 2, with internet content breathing new life into the TV platform. The IP-capable set-top boxes will be "open for all public service broadcasters, device developers and other ISPs" and will allow PSBs to compete with pay-TV operators Sky and Virgin Media more effectively, something that will particularly appeal to ITV's Michael Grade. ITV – and others – will be hoping that Project Canvas will avoid the hurdles encountered by Kangaroo by being more PSB than commercial in its approach, although it is a bit unclear at the moment what content windows Canvas would exploit.

The new Canvas devices – which could be available by 2010, pending BBC Trust approval – will also drive higher usage of broadband networks as consumers bring more web content into their TVs. This will warm the cockles of ISPs like BT and Virgin Media, which this week launched its 50Mbps fast broadband service for (sharp-intake of breath) £51 a month.

At the launch, VM boss Neil Berkett said ISPs need to start thinking about alternative business models to help pay for the big investments needed to provide high-speed broadband networks across the UK. "You cannot [expect the ISPs] to invest hundreds of millions, if not billions, of pounds in fibre and then expect that the only way you are going to monetise that is through subscription revenue streams," he said.

One remedy is to start charging broadcasters (and other content providers) for content distribution services, with faster delivery priced at a premium. Of course this would have implications for Canvas.

The web was supposed to be a free and open platform with none of the content bottlenecks of pay-TV, but as Berkett says, you get what you pay for. Someone will have to pay for the huge amounts of content that consumers will want to stream through the Canvas service and that someone could be the broadcasters. The good news is that the technology will be soon be with us. The question of who pays for the delivery may be harder to solve.