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Digital disaster

© Allan Lee

It had to happen sooner or later. But who would have thought it would have happened in such a high profile way. ITV Digital - launched by two of Britain's most influential terrestrial broadcasters, Carlton and Granada - set out to challenge the might of Rupert Murdoch's satellite-delivered Sky TV in the UK. The channel boasted that it was the first terrestrial, digital TV service in the world. In March, ITV digital called in the receivers. By April, they were off the air.

It should have worked. The service, originally titled ONDigital, was re-named ITV Digital in April 2001. Backed by the might of two of the country's leading ITV contractors, and with the power of the ITV name, it should have been a rip-roaring success.

ITV Digital set itself a target of 2 million subscribers by 2003. But as fast as viewers signed up and installed their set-top boxes, other subscribers pulled out. In February 2002, ITV Digital admitted 25 percent of its subscribers had called it a day - in just three months.

So what went wrong?

The September 11th tragedy plunged the advertising world into crisis. Business confidence staggered, and advertising budgets were slashed. The money that ITV Digital had counted on failed to materialise as media buyers were unlikely to put their reduced funding into a service which appeared unable to keep its viewers.

ITV bought the rights to Britain's Football League games for a staggering US$700 million or thereabouts - they still owe the football league more than US$300 million - and it turned out that wasn't what the viewers wanted to watch.

In the end, competition from Rupert Murdoch's BSkyB was simply too strong. The satellite service offered dozens more channels than ITV Digital, for only a few dollars more. ITV Digital's claims that their channels were 'quality' compared to BSkyB's offerings did not impress the public. And Sky offered soccer from the FA Premiership, a far more attractive soccer competition, with the top players, and the top soccer clubs. ITV Digital's service was perceived, rightly or wrongly, as second rate. And the viewers voted with their feet.

The Football League itself has been plunged into crisis as a result of the failure of ITV Digital. Clubs which had been relying on apparently guaranteed income from the TV channel are now on the brink of collapse. The financial disaster at ITV Digital is threatening the livelihoods of hundreds of people - not least the 1300 employed by ITV Digital itself. As this article is being written, the chief executive of ITV, Stuart Prebble, has just resigned.