Freesat have kindly allowed us to publish the speech Emma Scott (Managing Director, Freesat) made at the Broadcast Digital Channels Conference 2008 on Thursday 12 June 2008. It covers much of what we know, but is a worthwhile read. Please note that this has not been checked against the actually delivery, although its said to be the same.
Freesat launched five weeks ago so perhaps it’s early days to be standing up here and telling you the ‘story’ of Freesat – we simply haven’t done enough yet to warrant great tomes.
But what I can do is explain what Freesat is, why it’s here, who it’s for, about its place in the digital landscape and answer some of the questions raised since launch.
So what is Freesat? Well it’s a simple way to get guaranteed subscription free digital television. It’s available across the whole of the UK – with around 98% coverage of households, and it’s a great way to get subscription free high definition channels and services. And as the mantra goes, you get Freesat through a one off payment for equipment – and then it’s no contract, no subscription, ever.
Freesat is backed by the BBC and ITV and the Freesat company is run as a joint venture. We’re not for profit and the money we generate from shareholder contributions and income from listings is put back into the business. We don’t make or sell receivers ourselves – manufacturers and retailers do that – but what we do is manage the technical platform, receiver testing and an Electronic Programme Guide – and we promote and market the Freesat service to consumers, supporting people before and after they buy with a call centre and website.
Freesat launched at the beginning of May with over 80 digital services – TV, radio and interactive – and by the end of this year we should be heading for up to 200 channels. Channels range from the ever popular BBC, ITV and C4 digital portfolio services, such as BBC3, ITV2 and e4, through to up and coming TV services from companies like CSC Media, who own a large number of free to air digital satellite channels – offering movies through to children’s and entertainment. And then at the other end of the spectrum we have a number of niche interest channels from B4U, a Bollywood music channel, through to Euronews with its seven different language news service (English, French, German, Spanish, Italian, Portuguese and Russian).
So far, so good you might be saying. More channels and better coverage – but so what, why would I bother getting it?
Well in addition Freesat offers two high definition services – BBC HD and, launched just last Saturday night, ITV HD – both available for free, once you buy the Freesat HD equipment.
Both of these services are quintessentially public service – in that between them something for everyone.
From the BBC there’s high end drama like Florence Nightingale and The No.1 Ladies Detective Agency, new British comedy in Gavin and Stacey, major sporting events that unite the nation like the Olympics and beautiful documentaries like Wild China.
The BBC HD service offers the jewels in the BBC’s crown in stunning high definition and, increasingly, in surround sound. ITV HD will offer its Euro 2008 matches, Champions League, FA Cup and England World Cup Qualifiers in HD and, later in the year, landmark dramas and blockbuster films shown in their true glory.
And for many people it will be high definition programmes, on a no strings attached basis, which I believe will tip them into taking Freesat above other services.
But why do we need another TV service even if it has free HD? Let’s look at some of the most common questions about Freesat that people have asked since launch:
Why do we need another digital service when there’s only 2.5m homes left to convert?
Digital penetration is already at about 90%, so who needs another digital platform? Well, the other 10% of homes for a start - those who haven’t chosen to go digital yet.
In addition, that 90% figure is based on primary sets so there are still around 20 million second sets to convert.
And don’t forget 27% of UK households (over 6m households) can’t currently get Freeview, so those homes don’t have a simple, guaranteed subscription free option to convert. The launch of Freesat is great news for them. Don’t underestimate that appeal.
Is HD really relevant?
HD’s been talked about for ages and never really taken off, people claim. But only now with Freesat is it truly free for anyone who wants it.
There are already over 10m HD ready TV sets in homes across the UK but, at the time of Freesat’s launch, only around 5% of those HD ready homes were actually watching television programmes in high definition – and by subscription.
Look at how HD has taken off in the US where something like 35% of homes now watch in HD – and research shows those audiences are increasingly loyal to the networks they watch on and hunt out HD programming, even if they wouldn’t normally watch the genre.
And with 1m Sony Playstation3s and an increasing number of BluRay players sold – both of which allow you to watch HD content via an HD ready TV – there are an increasing number of homes who will never want to switch back to just normal, ‘standard’ definition content.
In fact we know consumers and retailers want HD content– but it’s the broadcasters that have taken a while to catch up.
Free HD is a long term opportunity for broadcasters and for Freesat. HD is not a gimmick, it’s a new standard for television and one which every broadcaster I’ve met would love to deliver its content in.
I do not believe that HD will remain a long term income driver for pay platform operators – consumers will resent paying for something they see as the ‘new normal’ television if it isn’t premium sport and movies, which they already ‘expect’ to pay for.
Do people really want free TV?
Well, take a look at the notion of ‘Freeconomics’, the theory being that, in a world of digital abundance, consumers increasingly want more things for free.
Some observers have remarked on the emerging trend of an increasing number of companies giving consumers access to products and services for free as a result of improvements in technology. These improvements mean that the cost of previously scarce commodities such as storage, bandwidth and processing capability is reducing at a dramatic rate.
Examples include:
GMail - hard drive storage has become so abundant that they give users 2 GB of mail for free.
You-Tube – everyone showing the world what happens when there’s an infinite set of channels available.
Skype – IP technology allows Skype to bypass the requirement for traditional networks – but they still have a viable business model and offer free calls.
And in broadcasting, the success of Freeview has demonstrated the power of the free offering and Freesat hopes to emulate and build on this success.
And as we enter a period of economic uncertainty and even recession, some consumers are going to start feeling the pinch meaning that free propositions will increasingly come into their own, faced with the alternative of costly monthly subscriptions.
How good does Freesat have to be to really compete?
It has to be very good.
We know people like the ‘free’ concept. The British public are intelligent and discerning consumers. Freecomonics already proves that there are an awful lot of people out there who are happy with free TV. Freesat takes that concept a step further – with free HD, IP capability to deliver iPlayer and Kangaroo in the short term and more content and innovation over time.
So, in a world where there is widespread availability of digital technology, consumers increasingly expect their media for free.
But just being free isn’t enough for Freesat. Freesat will be the best of free, and is only going to get bigger and better.