Service includes interactivity, 12 radio stations

LONDON — Digital terrestrial television got a fresh start in Blighty on Oct. 30 when Freeview bowed with little fanfare. But can its free TV offering of up to 30 channels succeed where ITV Digital’s pay service failed?

The new service, which also offers interactivity and 12 radio networks but no sports or movie channels, has a great deal to prove.

Freeview, backed by Blighty’s mighty pubcaster the BBC, dominant satcaster BSkyB and transmission company Crown Castle, is hoping that enough people will want the extra content — without having to pay for it — to justify its launch.

BSkyB offers more than 200 channels for up to £37 ($58) a month, while cable companies NTL and Telewest offer more than 150 for up to $73 a month.

Industry figures suggest that 20%-30% of U.K. homes are unlikely to sign up for pay TV and that’s the market that Freeview aims to mine.

BBC’s director of marketing Andy Duncan is confident that the service will not be tarnished by ITV Digital’s failure.

“This is a completely fresh start. It is targeted at those people who up to now have not wanted to go into digital television. It is not aimed at those people who like the idea of pay digital — premium sports and movies. It is really aimed at people who have only four or five channels.”

ITV Digital ceased broadcasting in April after administrators failed to find a buyer for the business as a going concern.

The shutdown ended the world’s first digital terrestrial TV operation and the big pay TV ambitions of ITV partners Carlton Communications and Granada.

It went into liquidation in October, having raised $42 million for the sale of assets — just 2% of its $1.93 billion debt.

Entertainment is expected to drive demand for the Freeview, but that has been described as “weak” by one industry observer, who added that its channel lineup was like “flicking through a public-service vision of the multichannel future.”

The entertainment offering, apart from the existing five terrestrial channels (ITV, Channel 4, BBC1, BBC2 and Channel 5) includes BBC Three for young adults, ITV2, Sky Travel and UK Style Extra. Freeview also is negotiating to broadcast the Turner Classic Movies channel.

Compared with the money spent on the launch of ITV Digital, Freeview’s birth has been low-key, with little publicity. The BBC cannot refer to it on BBC1 and BBC2 as this would contravene its own rules on product placement. Instead of planning a large-scale poster and press campaign, Freeview is spending $5.5 million on point-of-sales material for retailers, an information line and a Web site, freeview.co.uk.

A lot is riding on its success. The government needs to reach 100% digital penetration by 2010 to switch off the analog signal. But not all the country is able to receive the service. Only 75% of U.K. homes can receive Freeview, and 25% of them will need to upgrade their aerials.

ITV Digital’s reception problems were legendary: In some households, opening the fridge door could knock out the signal.

Crown Castle claims there will be fewer problems this time around as they have doubled the power at 29 transmitters. But on launch day, the BBC and Sky channels had more robust signals than ITV, Channel 4 and Channel 5.

While Freeview would not reveal numbers likely to be watching at launch, 1.2 million former ITV Digital set-top boxes are expected to be able to receive the signal.

Freeview boxes, retailing for $155, are being sold at a rate of “tens of thousands a month,” according to the BBC’s Duncan.

Predictions are that 1 million homes will be watching Freeview by Christmas –a nice present for the service and well within striking distance of the 1.7 million subs ITV Digital reckoned it needed to break even by 2004.

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