BBC and ITV battle Arqiva on future of Freeview

The BBC and ITV are at loggerheads with Arqiva, the company that runs Britain’s terrestrial TV masts, over plans for an internet-connected television standard meant as the successor to Freeview.

It is understood the broadcasters want the ‘Freeview Connect’ project to adopt technology developed by Freesat, the free satellite television service, rather than go back to the drawing board and risk losing audience share as viewers turn to on-demand services from pay-TV operators. Freeview Connect was announced this month by Digital UK, a consortium comprising the BBC, ITV, Channel 4 and Arqiva.

However, sources said Arqiva is resisting the plan because it is not a shareholder in Freesat and could lose influence over the future of broadcasting technology if it goes ahead.

The Digital UK board is due to decide on the issue within weeks.

Freeview Connect is seen as vital to the future of free-to-air television because Freeview households watch the main terrestrial channels more than those with a BSkyB, Virgin Media, BT or TalkTalk subscription. In the past year BT and TalkTalk have added more than a million pay-TV households between them, the majority former Freeview households attracted by on-demand features.

For ITV and Channel 4 the growth of pay-TV via the internet is a threat to advertising revenues. For the BBC anything that erodes audience share raises questions over the licence fee.

A source close to the broadcasters said: “We don’t want to reinvent the wheel again. Freesat has done a great job with its technology and it is important we get a product on the market as soon as possible.”

The shareholders of Digital UK have agreed to back Freeview Connect with more than £100m over five years, which it is understood the broadcasters argue would be better spent promoting Freesat’s technology than developing a new system from scratch.

The BBC, ITV and Channel 4 are all understood to be keen to enter the market as soon as possible after YouView, their previous attempt to safeguard their share of audiences in the digital age, became a de facto broadband pay-TV service for BT and TalkTalk, who were partners in the project. The broadcasters have radically reduced their funding of YouView and diverted it to Freeview Connect.

Freesat’s technology is called Freetime and it allows viewers to catch up with the last seven days of programming on 26 channels, on demand via an internet-connected set-top box in around 750,000 households.

The software is also being built into new televisions by Panasonic. It is envisaged that if Freetime is adopted as the Freeview Connect standard, rival manufacturers such as Samsung and Sony will quickly follow suit.

A spokesman for Arqiva said: “Arqiva firmly supports the Freeview Connected proposition and the decision on the technical solution will be made by Digital UK in due course.”

Arqiva is owned by a consortium of seven investment funds, led by the Canadian Pension Plan and Macquarie’s European Infrastructure Fund 2.