New service will use digital capability

LONDON — Demand for U.K. rights to independent films from the U.S. and around the world is set for a significant boost with the start of digital terrestrial TV in Britain next year.

Channel 4 is planning to launch a pay movie service via digital terrestrial, which will concentrate exclusively on indie pics, many of which would not previously have found a British buyer.

Prices paid are likely to be modest, at least initially while digital terrestrial establishes itself. But the new C4 service will at least offer an entry point to the U.K. market, which is notoriously the most difficult of all the major foreign territories in which to sell an indie pic.

C4 will consider buying pay TV rights alone, pay and free-TV rights together, or in some cases all U.K. rights. The web has its own theatrical distribution arm, which mainly releases C4’s own productions, but also makes occasional pickups.

The total launch cost of the C4 digital channel, provisionally titled the Channel 4 Film Club, is estimated at $25 million to $40 million a year. As well as indie movies from around the world, it will screen docus on filmmakers and discussions about the pics it shows.

English-language pics from America and Australia will be high on the C4 shopping list, although it will also screen some foreign-lingo fare. “There’s a lot of output from Australia in recent years that hasn’t been seen at all over here,” said a C4 source.

C4’s own movies will provide the backbone of the service, but the web is also seeking to expand its access to British films by striking a pay TV deal with British Screen Finance, the semi-public film investor.

At the moment, British Screen has a pay TV deal with BSkyB, which pays around $330,000 per British Screen pic. That pact is currently up for renegotiation, and C4 is emerging as a rival to the satcaster for the deal.

Ironically, British Screen originally struck the deal with BSkyB in order to prevent C4 from simply blocking out the pay TV window on pics they financed together. This caused a huge falling-out between British Screen and C4, and resulted in the two principal backers of British movies virtually ceasing to work together for the past couple of years.

Six blocks of frequencies, each with capacity for about five channels, have been carved out for digital terrestrial. Three of these “multiplexes” have been automatically assigned to the existing terrestrial webs, to be used partly for rebroadcasting their services with the added benefit of widescreen and digital sound, and partly for launching new services such as the C4 Film Club.

The BBC will use the spare capacity on its multiplex to launch a 24-hour news channel, among other new public-service programming initiatives.

The other three multiplexes were awarded June 24 to British Digital Broadcasting, a consortium backed by Carlton and Granada, which will carry channels from BSkyB and new commercial services from the BBC. BDB will be responsible for driving consumer sales of the set-top decoders needed to pick up the programming from all six multiplexes.

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