Tune in, turn on - or else
By Kate Bulkley
Monday January 28, 2002
Not enough people are watching digital TV - and if they are not hooked up by 2010 then it will be blank screens all round. Kate Bulkley meets Barry Cox, the man charged with persuading everyone to switch
Just north of 40% of homes in Britain already have it; almost a quarter of households think they might want it; and the rest say they wouldn't have it in their living rooms if you paid them. We're talking about digital television and although it may be the future, the transition of all British TV homes from their current analogue service to digital has slowed down just at the time when the government wants things ramped up to meet its 2006-2010 analogue switch-off deadline.
And it's not only the government that's interested in the move to digital. The industry, including broadcasters, consumer groups, programme makers and equipment manufacturers, are very keen to influence the move to digital for their own business planning. The man newly appointed to be in the middle of all this is Barry Cox.
An ex-journalist, an executive at London Weekend Television in its glory days, a long-time Labour party supporter and current deputy chairman of Channel 4, Cox's new title is chairman of the digital stakeholders group. It's a rather uninspiring name for a coming together of all the key players in the digital rollout - consumer groups, broadcasters, retailers, manufacturers, content providers and transmission networks operators. No wonder the title has been shortened to Digital Tsar.
Cox bristles at the title and is "truly offended" about being thought of as a "Tony crony", but this personal friend of Tony Blair is likely be stuck with both those monikers for the whole of his one-year appointment.
His government connections might just help, but Cox is quick to point out that it is a TV industry body that pays his wages through an organisation called the Digital Television Group. Yet his previously-honed talents as a TV-style diplomat and Labour links may be crucial to any success.
Cox's first move will be to prioritise the government's 31-page Digital Action Plan, which sets out the moves needed for the switchover to take place, detailing which tasks should happen when. He has already taken as his starting point the spectrum allocation plan for how the new digital spectrum is used after analogue is switched off.
After weeks of heated negotiations among the broadcasters in a coalition that has come together to create a free-to-air, multi-channel digital service - including all the terrestrial channels and BSkyB - there appears to be a compromise in the offing. The most likely scenario for the carve-up of the new frequencies would be a 50-50 split of the spectrum between free and paid-for services.
Cox believes that a firm decision about how many digital frequencies are made available to terrestrial broadcasters is fundamental to his job. "Unless there is a clear government plan for how they see 100% of the country being able to get digital signals, there's no way in hell of persuading consumers to do it. So we've got to have that [spectrum allocation] plan in place first," says Cox.
There is concern among cable and satellite executives that Cox's long track record in terrestrial television - he was responsible for ITV's digital strategy in the 1990s - will prevent him having an even-handed approach to his new role.
A leading detractor is Telewest CEO Adam Singer, who would have preferred Cox's job to go to someone who had at least worked more extensively in the multi-channel environment. "All of us who have real digital spectrum and real digital subscribers think he is only there to support ITV," says Singer.
Cox is quick to dismiss this: "I know the terrestrial end of the business, but I'm not ignorant of cable and satellite." He points to his experience on the Channel 4 board, which "uses all these different technologies for distribution".
Cox also has a deputy tsar in Sheila Cassells who is a 14-year veteran of the ITC, is fluent in multi-channel TV and is currently head of economic policy at BSkyB.
However, it is a time when ITV's owners Granada and Carlton are both currently suffering from the poor performance of their own digital terrestrial pay television service. Granada in particular has heavily lobbied the government for help with ITV Digital, even to the point of explaining that terrestrial digital television could collapse otherwise. ITV Digital has already soaked up £800m of Granada and Carlton's funds and breakeven is two years away according to the most optimistic of estimates.
"What I'm doing is not a cover to bail out ITV Digital," insists Cox. "It's to create an environment where the government can switch the analogue frequencies off and the switch off can only happen when terrestrial digital has been sorted out."
One technology that should really drive digital take-up is already on the horizon. Pace's low-cost digital adapter comes on sale this April and will turn a regular analogue TV set into one capable of receiving the handful of free digital terrestrial signals. The £99.99 device can also be upgraded so that it receives pay channels broadcast by ITV Digital.
Of course, this is exactly what the cable and satellite companies take issue with. They want Cox to ensure that the government's stated platform neutrality is not undermined by the terrestrial broadcasters' (including the BBC and Channel 4) support of this cheap device. The Pace box does not allow viewers to upgrade to BSkyB's or cable's channels, so a terrestrial push behind the new product could damage their future businesses.
Singer says that the backing of the Pace box by the BBC and Channel 4 is unfair because government money is then supporting only one of the three pay-TV platforms - DTT rather than cable or satellite.
The position of BSkyB in this argument is more complicated because they receive a financial benefit from any improved ITV Digital take-up as channels such as Sky One and Sky Sports are already on that service. There is also discussion between the BBC and BSkyB about creating a cut-down Sky channel line-up that would be offered to areas of the country that DTT signals do not reach. In addition, there is a possibility of another Pace-like adapter being produced that could include Sky pay services instead of ITV Digital.
BBC director-general Greg Dyke believes as many as 2m homes will buy the new Pace adapter and that the number of free digital terrestrial channels will increase beyond current BBC plans that include the rollout of two new children's channels and brainy BBC4.
However, 2m new homes is a relatively small portion of the hearts and minds that need to be convinced to fork out even the relatively small price of £100 for digital TV. According to Paul Lethbridge at consultancy Logica, although there is a high awareness among consumers of the government's plans for digital switch off, "They don't seem to realise that on January 1 2011, there will be no pictures on their TV set unless they do something about it."
Cox believes the next 12 months is the crucial time to change that perception. He admits that he does not yet have a clear idea of battle plan, but has already hired a consultancy to help him formulate one. "I personally believe it's still possible to achieve the switch off by 2006-2010, but I'm not an expert on this. The next year will determine if that remains true. There are important things that need to be sorted out that will have a big influence on whether that happens," he says.
All these new digital discussions are taking place against a background of another media and government policy question - when will broadband Britain take shape? Although Cox recognises that the government does make a connection between digital TV and the development of a broadband society, he claims they don't seem to be saying broadband's the big thing. "Quite how much of a part digital TV has to play in the development of broadband we'll find out."
The estimated 8m homes said to be interested in some kind of digital service in the near term, but not yet signed up, give Cox something to get his teeth into straight away. Given a new burst of enthusiasm prompted by the coming low-cost Pace adapter, the market will continue to make its own inroads into that number. But the big problem is how digital terrestrial will look. Will ITV Digital even survive? Cox says that's not the main issue. He says that even if ITV Digital collapses, the government would still want the BBC, ITV, Channel 4 and Channel 5 to extend DTT to the whole country and the channels have said to him that this is what they would do.
There is also the very real issue of the digital non-believers, some 5-6m homes. Encouraging those people into a digital future is something Cox will probably not address in so short a time as a 12-month tenure. He also says that if he is blocked from action by "stubbornness" or the competing agendas of his digital stakeholders group, he will resign.
"The job is not a poisoned chalice," he says. "I may be a bit perverse in wanting to take this on, but I've been involved in digital for 10 years and I'm fascinated by the issues it provides. There are few things that have such a mix of industrial policy, technology, commerce, public interest and government with a potential for change that this thing has."