Chapter 120: Chapter 120 SDTV
As expected, just as Barron expected, negotiations regarding ITV Digital began to accelerate a week later.
After all, the BBC is a public television station and needs to assume more social responsibilities. This is determined by its own nature.
Therefore, under the pressure of OFCOM, they finally made certain compromises - of course, in return, OFCOM also made concessions and gave the BBC more support.
Similarly, Summit Digital TV also received corresponding support in the negotiations before the final agreement was reached. Summit Digital TV (SDTV) is a company specially created by Summit Media for the bidding of ITV Digital's terrestrial digital television license.
This includes exempting SDTV from the terrestrial digital license fee, but the prerequisite is that the Freeview platform, in which it holds a 60% stake, will invest no less than 500 million pounds within five years to promote the terrestrial digital television system, and SDTV will open no less than 5 TV channels within five years for free broadcasting to the public.
In addition, OFCOM also promised to allocate special funds for the infrastructure construction of terrestrial digital television systems, including signal towers and the research and development of related technologies.
The Freeview platform is a platform jointly established by the BBC and SDTV, which hold terrestrial digital television licenses, to broadcast terrestrial digital television programs to the public free of charge. OFCOM still insists that the terrestrial television licenses they have obtained must be restricted from charging.
Because most of the television equipment used by British families now uses analog signals, before these users switch to digital television, if they want to receive digital TV programs, they must use a special set-top box.
Moreover, the set-top box equipment of BSkyB, which uses a satellite digital TV system, and ITV Digital, which uses a terrestrial digital TV system, are definitely not interchangeable.
Often, once users purchase a set-top box, they rarely buy another one. Therefore, ITV Digital lost to Sky TV in the previous competition because of its rigid management.
Now that the BBC and SDTV have obtained the original ITV Digital terrestrial digital television license, in order for users to receive their television signals, they naturally need to launch their own set-top boxes.
Therefore, after consultation, the BBC and SDTV decided to jointly launch the Freeview platform to promote their set-top boxes and the content played on the platform to users.
It's like if you buy a set-top box, you can receive many TV channels through it.
Because of doubts about SDTV's strength, OFCOM's initial opinion was to establish a terrestrial digital television broadcasting platform with the BBC as the main body. As for SDTV, it could participate in it, or pay a certain fee to the broadcasting platform launched by the BBC to enter this platform, similar to the stall fee paid by brands to supermarkets when they are listed on the shelves.
This is mainly because the BBC is one of the giants in the British television broadcasting industry and has a wealth of television channels that can be brought to this terrestrial digital television broadcasting platform.
But Barron knew the future prospects of terrestrial digital television in the UK. Joining the BBC's independent platform by paying a fee was naturally ruled out by him first. He would not be controlled by others in the future.
Therefore, they had no choice but to establish a terrestrial digital television broadcasting platform together with the BBC. However, at this time, the BBC was not very enthusiastic about this platform because they already had many television businesses, including terrestrial digital television, terrestrial analog television, and satellite TV... and did not have much motivation to develop terrestrial digital television alone.
You know, promoting terrestrial digital television is very expensive. Just distributing set-top boxes to users for free requires an investment of at least 100 million pounds per year!
Yes, because BSkyB Digital had already started the strategy of free set-top boxes at that time. If they wanted to compete with it, they could not charge users for selling set-top box equipment like ITV Digital did before, but could only follow the strategy of free distribution.
In this case, Summit Media directly proposed that they are willing to bear more promotion funds for the Freeview platform.
Their proposal naturally made the BBC overjoyed.
In addition to the fact that there are "suckers" willing to pay more money, you have to know that the BBC has more than a dozen TV channels, and SDTV can only have one TV channel at the beginning, and it is still unknown whether it will be successful. Now there are people willing to pay more money for the terrestrial digital TV broadcasting platform, which can be said to be a "great philanthropist."
As for the profitability of the Freeview platform?
Only when the terrestrial digital TV system has a relatively large proportion of users and other TV channels want to settle in it can they charge them fees.
ON Digital and ITV Digital both lost to BSkyB Digital. Facing such a strong opponent, what are the chances of Freeview's success?
Therefore, in the end, SDTV, the "newcomer" in the TV industry, took control of the Freeview platform, which was beyond the expectations of many people.
Similarly, this also means that Summit Media will need to bear 60% of the more than 500 million pounds of promotional investment that Freeview has promised to OFCOM over the next five years, or 300 million pounds - and this is just the promotion cost of Freeview platform to users.
Shortly thereafter, Barron used a headhunting firm to recruit GranadaTV's former creative and content director, Criadini, to serve as SDTV's CEO.
After he joins the company, he will begin to improve the structure of Summit Digital Television and prepare for the SDTV channel broadcast which will start from New Year's Day next year.
Fergal Hayden will continue to lead SDTV's parent company Summit Media as CEO.
By next year, the second season of "The Traitors" and "Downton Abbey" will be broadcast on SDTV.
Speaking of "The Traitors", as this reality show progresses, it has attracted more and more audiences with its twists and turns in the competition process and has become extremely well-known in the UK.
By October, the ratings of the reality show "The traitors" exceeded 60%. Tens of millions of British viewers watched the show in every episode, making it a phenomenal variety show.
Even some contestants of this reality show have become local stars - but they all signed a confidentiality agreement with the program team in the beginning, and they cannot reveal the subsequent plot until "The Traitors" is finished, otherwise they will face huge compensation.
However, we can also see the popularity of this program from here.
For this reason, the advertising sponsorship of "The traitors" alone is expected to generate revenue of more than 30 million pounds. It can be said that Summit Media has made a huge profit from this variety show.
At this time, they have already begun preparing for the filming of the second season of "The traitors".
Speaking of "The traitors", there is another thing. The Sinclair Group sent people to London to find Summit Media to discuss introducing the variety show "The traitors" to its TV station.
In addition to preparing to introduce the British version of "The traitors" to the United States for broadcast, they also want to introduce the copyright of the entire model of "The traitors" and produce the American version of "The traitors" reality show.
At the same time, SDTV also intends to purchase some content from the copyright library of TV stations under the Sinclair Group for broadcasting on its TV channels to fill non-prime time content.
It can be said that both parties got what they needed, and thus they began friendly negotiations.
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