Sky closed its launch queue to new broadcasters late last year. However, according to Ed Hall, chief executive, Canis Media, this has actually created an over supply of EPG places. “Historically about half of the channels in the queue to launch never launched, but because they closed the queue everyone now thinks they have an asset to sell.”
Sky’s stated reasoning in holding back the number of channels from launch was the inability of older set-top boxes to cope with the volume of channel numbers required. The result has been to remove some of the no hoper channels from launching in the first place, with Sky continuing to allow channels to launch at least through until August. “We’re advising people that we think it unlikely that Sky will launch everyone in the queue, which is why there is the enthusiasm to launch now,” says Hall.
Canis began the concept of channel trading when it bought out Home Shopping Channel. Sky is often accused of not being open to new channels, but at least until the queue was closed it was the most open of any of the multichannel platforms in the UK, maybe now even more.
Channel movements can often command seven figure deals and Hall says there are more in the pipeline. “If you want your channel to work you have to invest in going up. Anyone who wants to launch or move their channel around has to buy another one and we don’t see any likelihood in it slowing down for the next two years.” Hall adds that Canis has concluded seven deals so far this year.
“We have had some interest from people who don’t yet have a channel in the UK about launching initially on Freesat. The realities if you look at the business model is that it would be a long slow burn, if it ever can be good, if you were to solely have a Freesat-only distribution strategy.”
Hall’s comments underline Freesat’s only strategy that is reliant on a platform that is managed to a greater extent when compared to the other free-to-air platforms in Europe. There may already be one million FTA set-tops installed in the UK, but none of these can be said to belong to Freesat, and the likelihood of your average consumer tapping frequency information into Sky’s Other Channels menu is remote.
Hall’s strategy to new entrants would be to consider spending £50,000 to £100,000 (€62,884 to €125,798) on buying out another channel that is either at the bottom of the Sky EPG genre or waiting in the launch queue. This, he says, makes for a good way to test the market before considering whether to spend in the region of £1 million on buying someone out further up the guide.
Hall argues that Freesat has yet to make clear what if any strategy it has on the sale of EPG slots. He claims there is already interest in a pre-launch market.
At 603 to 605, the Tiny Pop group of channels must surely be Freesat’s most likely candidate for purchase within the kids genre, but strictly speaking there is no marker, and Hall says that channels currently on Freesat would not earn anything extra for their presence there.
The arguments against launching on Freesat apply equally to Virgin Media, based on Hall’s premise that an installed based of more than three million is required to ensure most business models stand up. “If you’ve got any kind of pre-recorded shopping model it doesn’t work in less than two or three million homes because it doesn’t refresh fast enough for those homes, they use up the content too quickly. Live shopping will work, but that depends on the costs of being in those homes.”
Virgin is still working through carriage contracts entered into when the cablenet was still NTL and Telewest.
This has created a situation where some channels are looking for carriage and are unable to find capacity. “According to Television Without Frontiers, a dominant market player should be regulated. Given that Virgin consists of all but 100% of the market, how come they are not regulated?” asks Hall.
“Providing you are compensating the cable network for the costs of distribution and paying Virgin for the EPG, you should be able to put whatever you like on there providing it’s legal and licensed.”
New Television Insider has written previously on Virgin Media’s HD strategy that so far has presented viewers with a single channel.
Among the smaller broadcasters, Hall is not seeing any demand for HD. Canis has equipped a new edit suite for HD, but this is largely because the difference compared to not doing so is so small.
