Scott Wickstein is Wrong

Scott claims that nobody in Australia will start using digital television until movies and sport are available on digital that are not available on analogue, and that the ABC is therefore foolish to be launching new digital children's channels.

On the first point, I think he is quite wrong, and as evidence I would like to point to the British example. There are two things you can do with digital television: you can use it to give more channels or you can use it to give better pictures (high definition television). With either of these approaches, you also get some interactivity as a bonus.

Britain (and Europe in general) chose the option of more channels (although the European system also supports HDTV if anyone actually wants to broadcast it). Britain initially licenced digital terrestrial as an alternative pay TV platform to satellite and cable. This managed to pick up a couple of million subscribers, but the business went bust due to spending vast sums of money on the rights to televise football matches (non-Premiership English league football) that very few people wanted to watch. Basically, though, these were low value customers. People who wanted pay television had options with more channels, and they largely went for them.

Britain now has something called "Freeview". The digital terrestrial frequencies have now been mostly given to the BBC, and a package of about 30 free channels, sourced from the BBC and other places. This consists of a few news channels, a couple of music video channels, a travel channel, a history channel, a couple of other documentary channels, a shopping channel, a BBC highbrow intellectual channel, a couple of channels showing repeats of the programs you missed yesterday, a couple of childrens channels, and that kind of thing. What these have in common is that they are mostly cheap to produce.

When this channel lineup was announced, the financial markets and assorted media analysts were underwhelmed, as most of the best channels were absent, including all the sports and movie channels, and the expectation was that Freeview would not be a great success. But, in fact, it has been very successful so far. Lots of set top boxes and integrated digital televisions have been sold.

The problem is that most of these analysts themselves had satellite of cable television, and they were comparing what was on offer with what they had, and they found it wanting. Football and movies do seem necessary to sell subscription television, but it does seem that free digital is another matter. Compared to five free channels, 30 free channels is good.

For subscription television, the question is "Do you want to sign a contract, agree to pay $50 every month, and have to have someone come out to your home to install a dish on the roof". It requires an incentive like movies or sport for people to say yes to this.

However, for free digital, it is more of a case of going to buy a television and being asked "If you want to spend an extra 100 pounds for this set, you can watch 30 channels instead of five". This is on a par with paying a little extra for stereo sound (which lots of people do) or teletext. And from that perspective, digital is a good deal, which is why people in Britain are taking it. Even if the choice in Australia is 10 channels instead of five, it is still much less of a committment than that you make for pay TV. And therefore, the programming doesn't need to be as good. In any event, within a couple of years a set top box will be so cheap it will practically come for free in a packet of cornflakes. This is clearly a different situation than for subscription TV.

As for the kids programming, of the BBCs digital channels the kids channel CBeebies is clearly the most successful. Kids channels are a mainstay of multichannel television anyway. A kids channel isn't in itself generally a good enough reason for Mum and Dad to pay for Sky: the kids don't pay the bills and it needs some sport as well. However, something to distract the kids is well worth paying 100 pounds extra for, and this seems a big reason for takeup of digital in the UK. It seems to me that the ABC is trying quite hard to copy the BBC, which isn't such a bad thing for it to be doing. Childrens channels aren't such a bad way of encouraging people to take up digital at all.

However, the question as to whether public money should be spent on new channels, or even old channels, is a different one entirely, both in the UK and Australia (My position on the ABC is that I am in favour of abolition. My position on the BBC is I am in favour of dismemberment and then privatisation). Let the commercial channels (and anyone else who wants to) set up new digital channels without regulatory interference. Of course, given the history of regulatory interference in Australia, hell will freeze over before this happens, but still, this is what should be done.