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Top Up TV, the pay TV service run by two former BSkyB executives, said yesterday that it had signed up 20,000 subscribers in its first month.
The 10-channel service has a break-even target of 250,000 customers and its first recruits have been drawn from the subscriber base of ITV Digital. Pay TV-compatible Freeview boxes are not widely available and digital televisions have yet to take off, making the 800,000 owners of old ITV Digital boxes significant customers.
David Chance, chairman of Top Up TV, said the service was on track to make a profit within two years. "We said we would break even in about two years and we should be able to deliver."
The former deputy chief executive of BSkyB added that he expected about 40% of Top Up TV's customers to sign up in the quarter leading up to Christmas, traditionally a strong period for the pay-TV market. Mr Chance said growth would increase once Freeview boxes that can take pay-TV cards arrive in the shops next month.
Top Up TV, which costs £7.99 per month and does not have a minimum contract, is aimed at consumers who want more channels, but balk at the £40 premium packages offered by BSkyB. The margins in the sub-£10 price range are too small for the likes of BSkyB and cable group NTL to make a profit, but they also limit Top Up TV to non-premium channels such as E4, Cartoon Network and Discovery.
"Customers like the channel line-up and they like the price point. It is a segment that's difficult for the traditional players to service at a profit. We can make a profit because we only have four employees," he said.
The BBC has shown the most opposition to Top Up TV, voicing concerns that the new venture may damage the BBC-backed Freeview service, which uses the same platform and offers up to 30 channels free of charge. A dispute over the positioning of the Top Up TV channels on the Freeview pop-up programme menu was resolved after Mr Chance appealed to Ofcom.
Freeview, the fastest growing digital TV service in Britain, is going from strength to strength and it had more than three million viewers by the end of last year. Mr Chance said sales of digital television sets, which only require a decoder card to take Top Up TV channels, could be the next source of growth for the service.
"A digital TV set is essentially a regular TV with a Freeview box built in," he said.
The 10-channel service has a break-even target of 250,000 customers and its first recruits have been drawn from the subscriber base of ITV Digital. Pay TV-compatible Freeview boxes are not widely available and digital televisions have yet to take off, making the 800,000 owners of old ITV Digital boxes significant customers.
David Chance, chairman of Top Up TV, said the service was on track to make a profit within two years. "We said we would break even in about two years and we should be able to deliver."
The former deputy chief executive of BSkyB added that he expected about 40% of Top Up TV's customers to sign up in the quarter leading up to Christmas, traditionally a strong period for the pay-TV market. Mr Chance said growth would increase once Freeview boxes that can take pay-TV cards arrive in the shops next month.
Top Up TV, which costs £7.99 per month and does not have a minimum contract, is aimed at consumers who want more channels, but balk at the £40 premium packages offered by BSkyB. The margins in the sub-£10 price range are too small for the likes of BSkyB and cable group NTL to make a profit, but they also limit Top Up TV to non-premium channels such as E4, Cartoon Network and Discovery.
"Customers like the channel line-up and they like the price point. It is a segment that's difficult for the traditional players to service at a profit. We can make a profit because we only have four employees," he said.
The BBC has shown the most opposition to Top Up TV, voicing concerns that the new venture may damage the BBC-backed Freeview service, which uses the same platform and offers up to 30 channels free of charge. A dispute over the positioning of the Top Up TV channels on the Freeview pop-up programme menu was resolved after Mr Chance appealed to Ofcom.
Freeview, the fastest growing digital TV service in Britain, is going from strength to strength and it had more than three million viewers by the end of last year. Mr Chance said sales of digital television sets, which only require a decoder card to take Top Up TV channels, could be the next source of growth for the service.
"A digital TV set is essentially a regular TV with a Freeview box built in," he said.