Digitally remastering the masses



ILSE Howling has no interest in preaching to the converted -- not when she still has millions to win over.
Ten million, to be precise. That's the number of households who have yet to show an interest in jumping on the digital terrestrial television (DTT) bandwagon. And for the BBC veteran responsible for marketing the broadcaster's portfolio of eight digital TV channels and digital radio, it also represents something of a mountain to climb if the standard analogue signal is to be switched off by the government's target date of 2010.

'It's almost impossible to overestimate how confused people are about digital TV. So getting the message across that it's normal TV and that all you need to do is buy an adaptor that you plug in is big news.'

Although it is still too early to tell whether the 2010 deadline will be achieved (Howling herself admits that the initial DTT target of 2006 is 'unlikely' to be met), the Independent Television Commission did recently report that 41.4% of all UK households had digital in some form, either terrestrial (broadcast and cable) digital or satellite-delivered digital TV.

Freeview, as the 30-channel £4m BBC/Sky/Crown Castle joint venture is known, has certainly grown at pace since its October 2002 launch. Retailers are currently selling 150,000 £100 Freeview boxes a month and by early March around 1.4 million homes were believed to have digital terrestrial TV.

The latest efforts from Howling's BBC digital marketing team can be seen on BBC1 and BBC2 and numerous BBC poster sites across the UK. While the broadcaster predictably won't attribute a financial value to its own air-time, it describes its new Freeview promotional campaign as 'heavyweight'. The campaign's aim is simple: to explode the myth that Freeview is pay-TV.

To this end, the BBC has so far invested a total of £300m in digital content across a variety of media -- roughly 11% of its annual £2.5 billion budget.

'According to our research there are 10 million people who are not interested in the pay-TV proposition, so we wanted to find out whether they understood the BBC's proposition,' says Howling, who joined the digital crusade in September 2001. 'We found that the more negative they were about pay-TV, the more attracted they were by the BBC's eight channels.

Targeting this essentially 'mainstream' audience meant using the BBC's clout -- in terms of branding and finance through the licence fee -- to alter consumer attitudes. Despite the £700m spent by ITV Digital owners Granada and Carlton Communications, this is something the earlier platform failed to do, albeit with a more expensive subscription-based DTT service.

Howling, with an obvious eye on the Beeb's ethos of public service, says: 'Our aim is for the channel to be in every home. If you have paid your licence fee and you are not getting Freeview, then you are missing out on something.'

There is also a view within the BBC that Freeview has even managed to overcome some of the bad feeling created by the circumstances surrounding ITV Digital's collapse. Its high-profile failure was linked to the financial difficulties of the English Football League and almost 400,000 customers were quickly lost to alternative satellite and cable providers such as Sky or NTL.

Addressing a previous market failure, however, is one thing; creating a viable digital proposition that maintains the sale rate of 500,000 set-top boxes over the last four months is another. Howling's plan? 'We have to get under the skin of the people who don't have it.'

While the early focus has involved winning easy converts (the 40% of UK homes apparently 'interested in' buying a Freeview box), the issue of channel content cannot be overlooked. While Sky has built a six million-plus subscriber base on the back of premium content such as football and movies, Freeview only has eight BBC channels (including BBC3, BBC4 and News 24 and two children's offerings) and a motley collection of niche stations such as Ftn and Bid-up TV.

'Nothing is more important than content,' admits Howling. 'They are not getting digital because they don't want the technology, it's because they want more of the TV that they enjoy watching.'

However, she does recognise that it's 'early days' with BBC3 and BBC4. The former may have a £97m annual budget, but like a throwback to 1950s broadcasting, both BBC3 and BBC4 only appear on screens from 7pm onwards. This lack of original programming and inability to generate scheduling features is forgivable because they have only been broadcasting since February and March 2002 respectively, but there is clearly a danger of offering more channels simply for the sake of them.

BBC4's best-performing programme has attracted an audience of just 400,000. And on March 28, when the war in Iraq was at its peak and other news outlets were recording record viewing figures, BBC3 suffered the embarrassment of registering zero viewers on an evening news bulletin.

Clearly creative and commissioning issues will take some time to resolve, but the danger of creating an arts ghetto on BBC4 and a 'yoof' ghetto on BBC3 remains. If millions of uncertain viewers are to be brought on board, innovative and popular (if niche) programming will be vital. The six million so-called digital 'refuseniks' (not to be confused with the licence fee refuseniks) will need something more tempting than a one-off payment of around £100.

'We will have to work out what to do with this group,' admits Howling, 'as these are the people who actually feel they don't want digital. People need to develop a relationship with the schedules. And I think they are beginning to do that. BBC4's European cinema night on Saturday would be one example of this.

'There are surprises however. Although it was just a simple technological idea, we have found that more people than we thought have taken to listening to digital radio on TV. According to our latest figures eight million [up 1.2m on 2002] people out of 10m digital homes listen to radio on television.'

The price sensitivity of the digital TV market remains an interesting area, adds Howling. This summer, Freeview boxes from various manufacturers should drop from £100 to £80. A combined digital TV and radio set-top box is also likely to appear this summer in a mass-market form. Some industry optimists have even claimed that digital adapters could drop down to £40 by 2004 -- making it an option for existing Sky customers looking for more channels on additional TVs.

The adoption of new technology, personal video recorders (PVR), which use a hard disk rather than videotape, could also increase digital uptake. Early models, manufactured just for use with Freeview systems, are already selling well at around £350. Although the UK still leads Europe in the digital TV growth, sales of integrated televisions remain low.

While a cost reduction would help to win new converts, and begin to truly challenge dominance of BSkyB in the multichannel market, the issue of reception and possible aerial upgrade remains. Currently, Freeview can only be viewed in 75% of the UK, and although the BBC has developed new technology (which relies on two home aerials to receive the signal) to be incorporated by set-top box manufacturers, it would add £14 to its price.

Howling, however, remains hopeful that Freeview's early sales momentum can be maintained and that BBC's marketing strength can force the digital message into the nation's consciousness and make the government's 2010 switch-off a reality.