Thursday, September 22, 2005

Sky Three

For those of us with a vague interest in multichannel TV - something I'll becoming back to later on, by the way - Sky's decision to launch Sky Three as a Freeview channel is very intriguing.

For the rest of you, which presumably includes anyone reading this outside the UK, a bit of background. Multichannel TV in the UK is presently in the middle of a platform war. Basically, if you want lots of channels, you have three options. You can get a satellite dish and sign up with Sky (like I did). That gets you the biggest number of channels, many of which are of course baffling low-budget crap or ridiculously narrow specialist channels. (Does any country really need a Wine Channel? The Golf Channel? The Dentists Channel? Two channels entirely devoted to poker?)

Or you can get cable. Fewer channels, but they tend to throw in broadband. On the other hand you're stuck with whoever the local provider is - if there is one - and there's a fair chance that'll be NTL, whose notoriously incompetent customer service department earned them the "NTHell" tag which they've never managed to shed.

Option three is digital television - which only gives you 30 or so channels, but at least you don't have to get a dish. Originally they tried making digital television a subscription service, and that bombed horribly, because anyone willing to pay for multichannel TV wanted a much better range of channels. ITV Digital, who ran the system, went bust a couple of years ago, and it looked as though digital television was dead in the water.

But the government is determined that we're all switching to digital TV whether we like it or not (it'll free up space on the broadcast spectrum, or something like that), and so digital TV rose from the ashes as Freeview, which gives you a whole load of channels... for free. Well, you've got to buy a decoder box, but those cost peanuts. Most of the channels in the initial line-up were rubbish, but only because all the good ones had contracts with Sky and cable which prevented them from broadcasting free-to-air. (Not much point selling a channel as a subscription service if everyone can get it for free.)

Even so, several major players hedged their bets. Sky themselves bought a couple of slots on Freeview, and used one of them for Sky Travel - basically, a load of filler. MTV weren't allowed to go free-to-air, so they just set up a channel called "The Music Factory" and broadcast that instead. Freeview has done remarkably well, and is now on course to beat Sky and cable hands down. E4, one of the biggest multichannel draws, has just gone free-to-air and abandoned subscription altogether.

Sky are obviously getting worried. Sky Travel is being pulled from its slot and replaced with Sky Three (Sky Two being the channel currently called Sky One Mix), which will broadcast Sky programmes on a one-year delay, the idea being that people will rush out and subscribe to Sky on seeing how wonderful it is. The downside is that if the programmes are that good - and they're running season 3 of 24 on Sky Three - people will just decide that Freeview is good enough for them. And with ITV4 and More4 (Channel 4's latest spin-off channel) both about to go straight to Freeview, Sky have something to worry about here.

Sky's weakness has always been in mainstream entertainment channels. All the good ones belong to the BBC, ITV or Channel 4, who have no interest in propping up Sky. Sky One, their in-house mainstream channel, is still hugely overreliant on American imports, and has never really found a replacement for Buffy the Vampire Slayer. There are some scattered B-list entertainment channels on the service - Paramount, Bravo, Living, FX - but nothing that's going to bring people flocking. This is the market that Freeview is now cornering, because all the major players want to go there.

Sky's strength, on the other hand, lies in specialist services, of the sort that manage to find a niche on a platform with hundreds of channels. Leaving aside the multitudes of shopping and gaming channels, Sky is the natural home for slightly odd channels like Challenge; the multitude of genre-specific music channels (I get 26 of them, most of which really aren't bad at all); and the movies and sports events which they've hoovered up the rights to. Oh, and all the silly quiz and shopping channels. In with the utterly insane and pointless channels - who on earth is watching channel 669, "Christmas Shop", or channel 250, "Real Estate TV"? - there's also some low-budget, themed channels which are actually quite good at what they do.

That's Sky's natural strength - something for everyone. But instead, they're going for the mainstream entertainment audience with Sky Three, and trying to fight on their weakest area. I suspect they're going to be disappointed with the results.