Summary:

BBC and ITV (LSE: ITV) today switched on what could either be a threat to BSkyB’s (NYSE: BSY) subscription satellite service or, as they say…

BBC and ITV (LSE: ITV) today switched on what could either be a threat to BSkyB’s (NYSE: BSY) subscription satellite service or, as they say, “the final piece in the digital jigsaw”. Their Freesat JV offers overs 80 digital channels with no subscription, no contract and for a one-off set-top box purchase. The killer app – HD channels for free, including BBC HD from launch and, eventually, ITV’s debut HD offering. And the pair expect up to 200 channels by year’s end. With standard boxes starting at £49 and HD boxes from £120, the service will have to offer a compelling enough alternative to Freeview, the JV on which it is modelled. Freesat’s real raison d’etre is that it makes digital TV available in rural blackspots ahead of the looming analogue switch-off. It’s there that BSkyB may now face some competition on satellite turf.

BBC DG Mark Thompson (via Guardian): “The long-term goal of Freesat is to connect to broadband and the internet services such as the iPlayer and Kangaroo accessible through boxes like this.”

Except even BSkyB customers who quit their subscription can retain free-to-air satellite channels. Sky has operated its own Freesat service for a number of years, with around 200 channels for a one-off £150, but has poorly marketed the offering – perhaps for fear of cannibalising its own premium packages. Freesat is also a trojan horse for HDTV adoption – the broadcasters last year won the right to broadcast some Freeview HD channels but there is more capacity over sattelite. Release.

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