Free Over-the-Air Digital TV Service Catches On in the UK

During the past five years, over-the-air broadcasters around the world have been struggling to find the perfect mix of content, resolution and price that would enable a smooth transition to digital television. Ideological battles over HDTV vs. SDTV, COFDM vs. VSB and 720p vs. 1080i have dominated the discussions, placing the consumer in the backseat of a car that seemed headed in circles.

But, in Great Britain last October, a consortium called Freeview launched its free over-the-air digital television system, and it has blossomed into a phenomenon. More than 800,000 customers have paid just $80 to purchase DTV set-top boxes that allow their ordinary television sets to receive up to 30 digital TV channels and 15 digital radio channels. Some of the set-tops also have interactive capability.

"It's fair to say that the whole market has been surprised at the take-up," says Freeview General Manager Matt Seaman. "Sales are still running at 100,000 a month, which is unheard of."

A trojan horse

Consumers aren't the only ones noticing. Nearly 30 manufacturers are building Freeview-enabled devices, from simple set-tops to DVD players and TVs with integrated tuners. Sony, Pace, Panasonic, Philips and Samsung are just a few producing the boxes. It's the lack of conditional access and hardware for broadband or phone support that helps keep the costs so low (and dropping).

"I think integrated devices like PVRs and DVD players are the exciting trend of the future," says Seaman, describing integrated Freeview set-tops as a Trojan-horse approach to getting the service into homes. "People don't like a lot of boxes hooked up to their TVs."

Given the companies involved with Freeview, it's no surprise that traction was gained so quickly. Even though it's essentially a competitor, News Corp's BSkyB is providing some of its channels; the BBC is handling the technical details of putting the channels together in a multiplex; and Crown Castle, a major European transmitter manufacturer, is working on the transmitter installations that currently deliver the service to more than 80% of the UK.

Freeview is being purchased by those who typically don't embrace new technologies. Nine out of 10 never had digital reception system before; 40% are older than 55; 41% are women. Seaman believes that the total number of Freeview owners could approach 3 million by the end of the year, putting it near cable's current subscriber levels and at about half of BSkyB's 6.8 million subs. There are 24 million households in the UK.

Widely available

"It sounds like the kind of digital television service that even the most technologically reticent couldn't turn down," says Peter Monnery, BBC Technology broadcast engineering manager, who headed the integration of the facility.

Freeview is currently available to about 80% of the population. The tricky part, according to Seaman, is reaching the final 20%, many of whom live in small villages and rural communities that receive analog signals via repeaters. The debate is over who should pick up the tab for the transmitters: the government or Freeview.

For now, though, the focus is on the positive—and the rest of Europe is noticing. Seaman has said that broadcasters in European nations facing a similar DTV-transition challenge have been in contact with him. He hasn't heard from any U.S. broadcasters.

That's probably for a very good reason. Multichannel-service penetration in the UK is only around 50%. So a free digital terrestrial service has a much larger potential user base. And, although U.S. broadcasters have dabbled with multicasting, the chances of seeing local CBS stations offering a multiplex including Viacom cable networks is zero given cable's large penetration. Nonetheless, Freeview is making the case that digital television can gain traction quickly when the price and programming are right.

Value equation

To Seaman, the interest proves that most of the consumers who never talked about digital TV could be keen on it if the proper proposition was found. "All the attention has been about pay-TV sports and movies, but there's a large silent majority who want more choice but don't want to pay for it," he says. "They're often overlooked because they're not as vociferous."

The Freeview value equation is fundamentally different from BSkyB and cable, which still rely heavily on sports and movie content that is unavailable over Freeview. In fact, the BSkyB sports news network on Freeview spends much of its time covering sports available on BSkyB's pay satellite service. Because of those differences, Seaman says, the churn from cable to Freeview has been very low.

The channels available on Freeview are generally unfamiliar to American viewers. They include specialty channels Full On Entertainment, Sky Travel and UK Brightideas; kids channel CBeebies; shopping channels QVC, Travel Shop and; music channels The Music Factory and The Hits; and a half dozen special-interest channels. There's also BBC1 and 2, ITV1, Channel 4 and Channel 5.

First, a failure

Freeview's success hasn't been easily earned. The service was born out of a previous digital failure: OnDigital, the UK's first digital terrestrial venture, which launched in 2000 and folded in 2002 (reasons include competition from BSkyB, technical issues and even outstanding payments for soccer rights). The British government then awarded the DTT licenses to Freeview in the middle of 2002, and the service launched three months later. OnDigital's failure also gave Freeview an initial base because the set-top boxes that consumers purchased for OnDigital were compatible with Freeview.

To receive the COFDM signals, Freeview recommends an external aerial antenna although indoor antennas are fine in areas like London. One of the big technical changes from OnDigital's effort was the move from 64QAM to 16QAM—basically making the signal stronger. That has made concern over digital-signal strength a thing of the past, says BBC Technology's Monnery.

Within the Freeview facility, three large plasma flat-panel displays are used to monitor the signal chain. The first one checks on the signal quality coming in from the programmers; the second checks on the signal quality going out to the Crown Castle transmission facility from the Philips encoders; the third displays an off-air signal. Any problems in the chain are dealt with using BBC Technology's Colledia signal-management system. Monnery says the signals are sent to Crown Castle's transmission facility and then, via British Telecom fiber, sent to the transmitters around the country.

And the country seems to want it. "Freeview," says Monnery, "is a perfect example of how digital TV can find impressive adoption rates when the value proposition is too attractive to ignore."