 | This articlepossibly containsoriginal research. Pleaseimprove it byverifying the claims made and addinginline citations. Statements consisting only of original research should be removed.(August 2022) (Learn how and when to remove this message) |
 Logo used from 2001 to 2002 | |
| Formerly | ONdigital plc, British Digital Broadcasting plc |
|---|---|
| Company type | Joint venture |
| Industry | Media |
| Founded | 15 January 1997; 28 years ago (1997-01-15) (asBritish Digital Broadcasting) |
| Defunct | 18 October 2002; 23 years ago (2002-10-18) (as ITV Digital) |
| Fate | Bankruptcy,liquidation |
| Successor | |
| Headquarters | Marco Polo House,, United Kingdom |
| Products | Pay TV services and programming |
| Owner | Carlton Communications Granada |
| Footnotes / references [1] | |
ITV Digital was a Britishdigital terrestrial televisionbroadcaster which launched a pay-TV service on the world's first digital terrestrial television network. Its main shareholders wereCarlton Communications plc andGranada plc, owners of multiple licences of theITV network. Starting asONdigital in 1998, the service was rebranded asITV Digital in July 2001.
Low audience figures, piracy issues and an ultimately unaffordable multi-million pound deal with theFootball League led to the broadcaster suffering large losses, and it enteredadministration in March 2002. Pay television services ceased permanently on 1 May of that year, but carriage of the remaining free-to-air channels such asBBC One andChannel 4 continued. In October, ITV Digital’s former terrestrialmultiplexes were taken over byCrown Castle and theBBC to create theFreeview free-to-air service.
On 31 January 1997,Carlton Television,Granada Television and satellite companyBritish Sky Broadcasting (BSkyB) together created British Digital Broadcasting (BDB) as ajoint venture, and applied to operate threedigital terrestrial television (DTT) licences.[2] They faced competition from a rival, Digital Television Network (DTN), a company created by cable operator CableTel (later known asNTL).[3] On 25 June 1997, BDB won the auction and theIndependent Television Commission (ITC) awarded the sole broadcast licence for DTT to the consortium. Then on 20 December 1997, the ITC awarded threepay-TV digital multiplex licences to BDB.
That same year, however, the ITC forced BSkyB out of the consortium on competition grounds; this effectively placed Sky in direct competition with the new service as Sky would also launch its digital satellite service in 1998, although Sky was still required to provide key channels such asSky Movies andSky Sports to BDB.[4] With Sky as part of the consortium, British Digital Broadcasting would have paid discounted rates to carry Sky's television channels. Instead, with its positioning as a competitor, Sky charged the full market rates for the channels, at an extra cost of around £60million a year to BDB.[5] On 28 July 1998, BDB announced the service would be called ONdigital,[6] and claimed it would be the biggest television brand launch in history.[7] The company would be based inMarco Polo House (since demolished) in Battersea, south London, which was previously the home of BSkyB's earlier rival,British Satellite Broadcasting (BSB).
Sixmultiplexes were set up, with three of them allocated to the existinganalogue broadcasters. The other three multiplexes were auctioned off. ONdigital was given one year from the award of the licence to launch the first DTT service. In addition to launching audio and video services, it also led the specification of an industry-wide advanced interactive engine, based onMHEG-5. This was an open standard that was used by all broadcasters on DTT.
ONdigital was officially launched on 15 November 1998 amid a large public ceremony featuring celebrityUlrika Jonsson and fireworks around theCrystal Palace transmitting station.[8] Its competitorSky Digital had already debuted on 1 October.[9] The service launched with 12 primary channels, which included the newBBC Choice andITV2 channels; a subscription package featuring channels such asSky One,Cartoon Network,E4,UKTV channels and many developed in-house by Carlton and Granada such asCarlton World; premium channels includingSky Sports 1 and 3 (later including 2),Sky Premier and Sky MovieMax; and the newly launchedFilmFour.[10][11][12]
From the beginning, however, the company was quickly losing money. Supply problems with set-top boxes meant that the company missed Christmas sales and retailers had to wait several months for the customers to receive their boxes. Meanwhile, aggressive marketing by BSkyB for Sky Digital made the ONdigital offer look unattractive. The new digital satellite service provided a dish,digibox, installation and around 200 channels for £159, a lower price than ONdigital at £199. Sky had also launched earlier, meaning they had a head start over the ONdigital service. ONdigital's subscription pricing had been set to compare with the older Skyanalogue service of 20 channels.[13] In 1999, digital cable services were launched byNTL,Telewest andCable & Wireless.[14]
In February 1999,ITV secured the rights forUEFA Champions League football matches for four years,[15] which would partly be broadcast through ONdigital.[16] Two sports channels were added to the platform, Champions ON 28 and Champions ON 99 (later renamed ONsport 1 and ONsport 2 when it secured the rights toATP tennis games), the latter of which timeshared withCarlton Cinema. Throughout 1999, channels includingMTV andBritish Eurosport launched on the platform.[17] The exclusiveCarlton Kids andCarlton World channels closed in 2000 to make way for twoDiscovery channels.[18]
ONdigital reported in April 1999 that it had 110,000 subscribers, while Sky Digital had over 350,000 by that time.[14] By March 2000, there were 673,000 ONdigital customers.[19]
The first interactive digital service was launched in mid-1999, called ONgames. On 7 March 2000,ONmail was launched which provided an interactivee-mail service.[20] A deal with multiplex operatorSDN led to the launch ofpay-per-view service ONrequest on 1 May 2000. In June 2000, ONoffer was launched. On 18 September 2000, theinternet TV service ONnet was launched.[21]
On 17 June 2000, ONdigital agreed to a £315 million three-year deal with theFootball League to broadcast 88 live Nationwide League andWorthington Cup matches from the 2001–02 season.[22]
In 1999, Sky started to give away their digiboxes for free whilst the customer subscribed. This was a problem for ONdigital, as they had no choice but to sell prepaid set top boxes to win customers back from rival services.[23] Even when they decided to sell prepaid set top boxes (under the ONprepaid brand), they could not easily compete with Sky.
ONdigital's growth slowed throughout 2000, and by the start of 2001 the number of subscribers was no longer increasing; meanwhile, its competitor Sky Digital oversaw a dramatic increase in subscribers, spearheaded by the launch of interactive services, such asOpen... andSky Gamestar, and the launch of rival cable digital services from the likes of NTL and Telewest ate into ONdigital's subscriber numbers. The ONdigital management team responded with a series of free set-top box promotions, initially at retailers such asCurrys andDixons, when ONdigital receiving equipment was purchased at the same time as a television set or similarly priced piece of equipment. These offers eventually became permanent, with the set-top box loaned to the customer at no charge for as long as they continued to subscribe to ONdigital, an offer that was matched by Sky. ONdigital'schurn rate, a measure of the number of subscribers leaving the service, reached 28% during 2001.[24]
Additional problems for ONdigital were the choice of64QAM broadcast mode, which when coupled with far weaker than expected broadcast power, meant that the signal was weak in many areas; a complex pricing structure with many options; a poor-quality subscriber management system (adapted fromCanal+); a paper magazine TV guide whereas BSkyB had anelectronic programme guide (EPG); insufficient technical customer services; and muchsignal piracy. While there was a limited return path provided via an in-built 2400 baudmodem, there was no requirement, as there was with BSkyB, to connect the set-top box's modem to a phone line.[citation needed]
With this combination of factors contributing to the service's lack of popularity, in 2001, executives at ONdigital management wrote a letter to the government, asking for emergency funding to finance the service in order to keep it alive due to a lack of customers and paying members.[citation needed]
ONdigital began to sell prepaid set-top boxes (under the name ONprepaid) from November 1999 in order to win customers, especially at the launch of other digital services from the likes ofNTL andTelewest. This bundle sold in high street shops and supermarkets at a price that included the set-top box (which was technically on loan) and the first year's subscription package.[25] These prepaid boxes amounted to 50% of sales in December 1999.[26] Thousands of these packages were also sold at well below retail price on auction sites such as the then-popularQXL. As the call to activate the viewing card did not require any bank details, many ONdigital boxes which were supposed to be on loan were at unverifiable addresses. This was later changed so a customer could not buy a box without ONdigital verifying their address. Many customers did not activate the viewing card at all, although where the viewer's address was known, ONdigital would write informing them that they must activate before a certain deadline.[citation needed]
The ONdigitalpay-per-view channels were encrypted using a system –SECAMediaGuard – which had subsequently been cracked by hackers working for NDS Group, the makers of theVideoGuard system that Sky Digital used. ONdigital did not update this system, therefore it was possible to produce and sell counterfeit subscription cards which would give access to all the channels.[27] About 100,000 pirate cards were in circulation by 2002, and these played a role in the demise of the broadcaster that year.[28]
In April 2001 it was said that ONdigital would be 'relaunched' to bring it closer to theITV network and to better compete with Sky.[29] On 11 July 2001 Carlton and Granada rebranded ONdigital asITV Digital.[30]
Other services were also rebranded, such as ONnet to ITV Active.[31] A rebranding campaign was launched, with customers being sent ITV Digital stickers to place over the ONdigital logos on their remote controls and set top boxes. The software running on the receivers was not changed, however, and continued to display 'ON' on nearly every screen. However, iDTVs made after the rebrand removed the 'ON' prefix from their software. Option 7 on the main menu on iDTVs was also renamed from "ONdigital Updates" to "Subscription Information".
The rebrand was not without controversy, asSMG plc (owner ofScottish Television andGrampian Television),UTV andChannel Television pointed out that the ITV brand did not belong solely to Carlton and Granada. SMG and UTV initially refused to carry the advertising campaign for ITV Digital and did not allow the ITV Sport Channel space on their multiplex, thus it was not available at launch in most of Scotland and Northern Ireland. The case was resolved in Scotland[32] and the Channel Islands and later still in Northern Ireland, allowing ITV Sport to launch in the non-Carlton and Granada regions, although it was never made available in the Channel Islands, where there was no DTT or cable,[citation needed] and it never appeared on Sky Digital.
Later in 2001,ITV Sport Channel was announced. This would be a premium sport channel, and would broadcast English football games as per the company's deal with the Football League in 2000, as well as ATP tennis games and Champions League games previously covered by ONsport 1 and ONsport 2. The channel launched on 11 August of that year, and was also carried on cable byNTL.[33]
The service reached 1 million subscribers by January 2001, whereas Sky Digital had 5.7 million. Granada reported £69 million in losses in the first six months of 2001, leading some investors to urge it to close or sell ONdigital/ITV Digital.[34] ITV Digital was unable to make a deal to put the ITV Sport Channel on Sky, which could have given the channel access to millions of Sky customers and generated income; the channel was only licensed to cable companyNTL. Subscriptions for ONnet/ITV Active, its internet service, peaked at around 100,000 customers.[35] ITV Digital had a 12% share of digital subscribers as of December 2001.[36] ITV Digital and Granada cut jobs that month.[37][38] By 2002, the company was thought to be losing up to £1 million per day.[39]
In February 2002, Carlton and Granada said that ITV Digital needed an urgent "fundamental restructuring".[40] The biggest cost the company faced was its three-year deal with the Football League,[41][42] which had been deemed too expensive by critics when agreed, as it was inferior to the top-flightPremiership coverage fromSky Sports.[43] It was reported on 21 March 2002 that ITV Digital had proposed paying only £50 million for the remaining two years of the Football League deal, a reduction of £129m. Chiefs from the League said that any reduction in the payment could threaten the existence of many football clubs, which had budgeted for large incomes from the television contract.[44]
On 27 March 2002, ITV Digital was placed inadministration as it was unable to pay the full amount due to the Football League.[45] Later, as chances of its survival remained bleak, the Football League sued Carlton and Granada, claiming that the firms had breached their contract in failing to deliver the guaranteed income. On 1 August the league lost the case, with the judge ruling that it had "failed to extract sufficient written guarantees".[46] The league then filed a negligence claim against its own lawyers for failing to press for a written guarantee at the time of the deal with ITV Digital. From this, in June 2006, it was awarded a paltry £4 in damages of the £150m it was seeking.[47] The collapse put in doubt the government's ambition to switch off analogue terrestrial TV signals by 2010.[48]
Despite several interested parties, the administrators were unable to find a buyer for the company and effectively put it intoliquidation on 26 April 2002.[49] Most subscription channels stopped broadcasting on ITV Digital on 1 May 2002 at 7 am, with only free-to-air services continuing.[50][51] The next day, ITV chief executiveStuart Prebble quit.[52] In all, 1,500 jobs were lost by ITV Digital's collapse.[53] ITV Digital was eventually placed into liquidation on 18 October, with debts of £1.25 billion.[54]
By 30 April 2002, theIndependent Television Commission (ITC) had revoked ITV Digital's broadcasting licence and started looking for a buyer. A consortium made up of theBBC andCrown Castle submitted an application on 13 June,[55] later joined by BSkyB, and were awarded the licence on 4 July.[56] They launched theFreeview service on 30 October 2002, offering 30 free-to-air TV channels and 20 free-to-air radio channels including several interactive channels such asBBC Red Button andTeletext, but no subscription or premium services.[57] Those followed on 31 March 2004 whenTop Up TV began broadcasting 11pay TV channels intimeshared broadcast slots.
From 10 December 2002, ITV Digital's liquidators started to ask customers to return their set top boxes or pay a £39.99 fee.[58] Had this been successful, it could have threatened to undermine the fledgling Freeview service, since at the time most digital terrestrial receivers in households were ONdigital and ITV Digital legacy hardware. In January 2003, Carlton and Granada stepped in and paid £2.8m to the liquidators to allow the boxes to stay with their customers, because at the time the ITV companies received a discount on their broadcasting licence payments based on the number of homes they had converted to digital television. It was also likely done to avoid further negativity towards the two companies.[59]
During the time under administration, Carlton and Granada were in talks regarding a merger, which was eventually cleared in 2004.[60]
Following the proposed Football League merger, with the lucrative finances it proposed, ITV Digital's collapse had a large effect on many football clubs.Bradford City F.C. was one of the affected, and its debt forced it into administration in May 2002,[61][62] followed byLeicester City inOctober.[63]
Barnsley F.C. also entered administration in October 2002, despite the club making a profit for the twelve years prior to the collapse of ITV Digital.[64][65] Barnsley had budgeted on the basis that the money from the ITV Digital deal would be received, leaving a £2.5 million shortfall in their accounts when the broadcaster collapsed.[65]
Clubs were forced to slash staff, and some players were forced to be sold as they were unable to pay them. Some clubs increased ticket prices for fans to offset the losses.[66]
The rights to showFootball League matches were resold toSky Sports for £95 million for the next four years compared to £315 million over three years from ITV Digital, leading to a reduction from £2 million per season to £700,000 in broadcasting revenue for First Division clubs.[67][68]
In total, fourteenFootball League clubs were placed in administration within four years of the collapse of ITV Digital, compared to four in the four years before.[68]
On 31 March 2002, French cable companyCanal+ accusedRupert Murdoch'sNews Corporation in the United States of extracting the UserROM code from itsMediaGuard encryption cards and leaking it onto the internet.[69]
Canal+ brought a lawsuit against News Corporation alleging that it, through its subsidiaryNDS (which provides encryption technology for Sky and other TV services from Murdoch), had been working on breaking the MediaGuard smartcards used by Canal+, ITV Digital and other non-Murdoch-owned TV companies throughout Europe.[70][71] The action was later partially dropped after News Corporation agreed to buy Canal+'s struggling Italian operationTelepiu, a direct rival to a Murdoch-owned company in that country.[72][73]
Other legal action byEchoStar/NagraStar was being pursued as late as August 2005, accusing NDS of the same wrongdoing.[74] In 2008, NDS was found to have broken piracy laws by hacking EchoStar Communications' smart card system, however only $1,500 in statutory damages was awarded.[75]
On 26 March 2012, an investigation from BBC'sPanorama found evidence that one of News Corporation's subsidiaries sabotaged ITV Digital. It found that NDS hacked ONdigital/ITV Digital smartcard data and leaked them through a pirate website under Murdoch's control – actions which enabled pirated cards to flood the market.[76][77] The accusations arose from emails obtained by the BBC, and an interview with Lee Gibling, the operator of a hacking website, who claimed he was paid up to £60,000 per year by Ray Adams, NDS's head of security.[78] This would mean that Murdoch used computer hacking to directly undermine rival ITV Digital. Lawyers for News Corporation claimed that these accusations of illegal activities against a rival business are "false and libellous".[79] In June 2013 theMetropolitan Police decided to look into these allegations following a request byLabour MPTom Watson.[80]
ITV Digital ran an advertising campaign involving the comedianJohnny Vegas as Al and a knitted monkey simply calledMonkey, voiced byBen Miller. A knitted replica of Monkey could be obtained by signing up to ITV Digital. Because the monkey could not be obtained without signing up to the service, a market for second-hand monkeys developed. At one time, original ITV Digital Monkeys were fetching several hundred pounds oneBay,[81] and knitting patterns delivered by email were sold for several pounds. The campaign was created by the advertising agencyMother.[82] In August 2002, following ITV Digital's collapse, Vegas claimed that he was owed money for the advertisements.[83] In early 2007, Monkey and Al reappeared in an advert forPG Tips tea, which at first included a reference to ITV Digital's downfall.
.jpg)
The set-top boxes used for ITV Digital and ONdigital were:
Carlton and Granada (laterITV Digital Channels Ltd) created a selection of channels which formed some of the core content available via the service. These were:
| Channel name | Channel no. | Year removed | Reason/Notes |
|---|---|---|---|
| Carlton Kids | 34 | 2000 | Timeshared withCarlton World. Replaced by a timeshare ofDiscovery Kids andDiscovery Wings.[84] |
| Carlton World | 34 | 2000 | Timeshared withCarlton Kids. Replaced by a timeshare ofDiscovery Wings andDiscovery Kids.[85] |
| Carlton Select | 35 | 2000 | Timeshared withCarlton Food Network.[86] |
| First ONdigital | 20 | 2000 | Provided exclusive coverage of sports events, concerts and ONdigital features/channels. |
| ONoffer | 20 | 2001 | Provided offers on products. Was replaced by Wellbeing. |
| ONsport 1 | 99 | 2001 | Originally known as Champions ON 99. Replaced by ITV Sport Channel, ITV Sport Extra and ITV Sport Select. |
| ONsport 2 | 28/98 | 2001 | Originally known as Champions ON 28, then Champions ON 98. Timeshared with Carlton Cinema. Replaced by ITV Sport Channel, ITV Sport Extra and ITV Sport Select. |
| Taste CFN | 35 | 2001 | Known as Carlton Food Network until 1 May 2001. Timeshared with Carlton Select before extending hours until closure. |
| ONview | 20 | 2001 | Served as a portal to the ONdigital service, containing services like ONoffer, ONsport results and ONrequest movie showing times. |
| Granada Breeze | 31 | 2002 | Known as Granada Good Life until 1 May 1998. Timesharing withMen & Motors (Known as Granada Men & Motors until 2001, ceased during 2010). |
| ITV Select | 50 | 2002 | Known as ONrequest until 22 August 2001. |
| ITV Sport Channel | 20 | 2002 | Replaced ONsport 1 and was also available on NTL's service. Closed due to ITV Digital's liquidation. |
| ITV Sport Plus | 99 | 2002 | Replaced ONsport 2, but it is unknown if it was on rival digital services likeITV Sport Channel. Closed due to ITV Digital's liquidation. |
| ITV Sport Select | 98 | 2002 | Provided a pay-per-view service for sports events, in the same way as ONrequest/ITV Select. Closed due to ITV Digital's liquidation. |
| Shop! | 19 | 2002 | Joint venture between Granada andLittlewoods. |
| Wellbeing | 47 | 2001 | Joint venture between Granada andBoots. Replaced ONoffer service. |
| ITV Text+ | 16 | 2002 | Operated mostly in the same way as BBC Text, but provided ITV programme information. Closed due to ITV Digital's liquidation. |
| Carlton Cinema | 28 | 2003 | Timeshared with Champions ON 28/98, then timeshared with ONsport 2. |
| Plus | 30 | 2004 | Known as Granada Plus until 1998, then G Plus until 2002. Closed due to launch ofITV3. |
| ITV News Channel | 48 | 2005 | Known as ITN News Channel until after the collapse of ITV Digital. |
| ITV2 | 6 | — | Still broadcasting. |
ITV | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Channels |
| ||||||||||||||||||||||||
| Companies |
| ||||||||||||||||||||||||
| Divisions, brands and services |
| ||||||||||||||||||||||||
| ITV (network) franchises and regions |
| ||||||||||||||||||||||||
| Timelines |
| ||||||||||||||||||||||||
| Regulators | |||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||
