Television viewers in Finland who haven’t been watching the news may be in for a surprise when they turn on their television sets on the morning of August 31st, 2007. The signal will be gone. The Finnish government will be shutting down the nationwide analogue network of broadcasting signals on that day, and anyone who is still relying on their analogue antennae for service will be out of luck.
Baker Capital has just invested €38 million ($49 million) in Digi TV Plus Oy, a newly established digital pay-TV company in Finland that will provide a package of pay channels to customers using digital terrestrial television receivers. DTT signals are receivable through a conventional antenna but can provide a greater number of channels and better picture quality than analog signals. The picture quality is comparable to satellite or cable service but requires only an antenna to receive.
This past December the EU recommended that its member states cease all analogue television transmissions by the year 2012, and suggested that those members who have not yet launched DTT services should do so. Manning says as European countries shut down their analogue systems and establish DTT systems, there is an opportunity for companies to provide pay-TV packages to DTT users who don’t want only the free channels, but also don’t need the many channels that come with cable or satellite service.
“You’re getting fewer channels than you could get with cable or satellite, but you’re getting the best ones that people watch most of the time, and you’re getting it at a better price,” he says.
Baker Capital is no stranger to the sector, having previously invested in Canal+ Television, the leading premium satellite pay-TV provider in the Nordic region, which the firm sold to SBS Broadcasting last year. Manning says he hopes to replicate the firm’s success in satellite pay-TV in the new DTT arena.
So far efforts to establish pay DTT platforms in Europe have seen mixed results. The first DTT platform in Spain, which was heavily reliant on pay television, failed financially and was forced to relaunch as a free-to-air system. The UK platform, ONdigital, experienced a similar initial setback and had to relaunch as a free-to-air platform in 2002. But in 2004 two former BSkyB executives launched Top Up TV in the UK, which offers a basic but popular selection of channels for a reasonable price on DTT. Sweden’s state-owned pay platform Boxer TV Access has been very successful, already overtaking the satellite business. Baker Capital took strong interest when the Swedish government briefly marketed the service to outside investors, but for now they’ve decided to maintain state control.
Manning says the best opportunities for private investment in DTT pay-TV platforms are in smaller European countries where most consumers don’t already have satellite TV.
“In immature television markets like Finland, there’s a great opportunity for large uptake in DTT,” he says. “Satellite has not been very successful in Finland, but you have over a million homes with cable. We think that DTT could be a strong second to cable in the marketplace.”
Digi TV Plus, which has also received seed funding from the Swedish firm Provider Venture Partners, will be marketed to customers under the name PlusTV and will be available beginning in November of this year. The company has already reached an agreement with MTV MEDIA to be the exclusive distributor of the station’s digital pay-TV services to Finnish DTT households. The package will also include the most popular Finnish and foreign pay-TV channels.