Freesat May Offer Pay TV Subscriptions

Freesat, the UK’s free-to-air digital satellite service set up by BBC and ITV, is thinking of entering the pay-TV arena by offering its viewers the opportunity to subscribe to Sky Sports 1 and Sky Sports 2 channels which will be licensed from British Sky Broadcasting (BSkyB or Sky) at reduced wholesale prices enforced by media regulator Ofcom.

Emma Scott, managing director of Freesat, told The Guardian that Freesat’s board of directors is mulling over whether to take advantage of the Wholesale must-offer rules slapped onto BSkyB by Ofcom, which ordered BSkyB to cut wholesale prices at which the company sells Sky Sports 1 and Sky Sports 2 to rival pay-television providers (such as Virgin Media and BT) by 23.4%.

She said that at present a final decision has not been reached, but Freesat is monitoring developments relating to BSkyB’s forced wholesale price reduction very closely, including the deal struck between BT and Sky to let BT Vision users gain access to Sky Sports 1 and Sky Sports 2 from the 1st of August just in time for the new Barclays Premier League football season.

Despite concerns that any strategic entry into the paid subscription TV market may contradict the Freesat brand and turn customers off, Ms Scott opined that Freesat needs to jump on the pay-TV wagon to remain competitive especially when other operators are doing the same.

Before any Pay-TV service can go live on the Freesat platform, it needs to obtain approval from the BBC Trust which at the moment is pre-occupied with defending the current level of BBC license fee, following a demand from Cultural Secretary Jeremy Hunt for Britain’s TV license fee to be cut in line with the government’s austerity drive in public spending.

Initially billed as one of the least expensive avenues for UK viewers to watch high-definition content, Freesat’s appeal has slowly but surely been eroded by the launch of Freeview HD on the Freeview free-to-air digital terrestrial television platform. Currently only two functional HD channels are available on Freesat: BBC HD and ITV1 HD. Freeview HD offers these channels plus Channel 4 HD, with BBC One HD and possibly another high-def channel to follow.

In its present form, only consumers who do not stay in an area with Freeview HD coverage will be interested in Freesat (even then a satellite dish will need to be installed), which is probably why the platform is considering offering Pay-TV options to broaden its appeal.