Ondigital undergoes major overhaul

Ondigital: Stepping closer to ITV

Digital TV service Ondigital is to undergo a radical overhaul under the helm of a new chief executive.

Parent companies Carlton and Granada have taken the decision to change the service in a drive to make savings and bring in new customers.

This is the most fundamental change in British broadcasting since the launch of multi-channel television

Granada chairman Charles Allen

The new name for the channel will be ITV Digital, to align it closer to its terrestrial brand.

Granada chairman Charles Allen has called the decision "the most fundamental change in British broadcasting since the launch of multi-channel television".

Ondigital chief executive Stuart Prebble has been confirmed as the new chief executive of the ITV network, with responsibility for ITV Channels, ITV Digital and ITV.com.

Digital subscribers

Ondigital -1.087 million

BSkyB - 4.7 million

He will have the task of making savings of £20m a year when the service is relaunched and bringing in and retaining customers.

Cancellation rate (per year)

Ondigital - 22%

BSkyB - 9.8%

Ondigital announced 75,000 new subscribers in the first quarter, giving a total of 1.087 million.

But this falls someway short of the target two million expected by 2002.

The target has now been reduced to 1.7 million subscribers by 2003/2004.

Break even

The "churn" rate sees around 22% of new customers cancelling the service within the first year.

It is also now predicted that the company will not break even until 2003/2004.

Speaking on the Today programme Carlton chief executive Gerry Murphy said: "This business is in start up phase and like all new business we need to get equipment in the field, we need to get customers hooked up.

"It is like the mobile phone economics in that sense.

"The reality is that the faster we grow the more money we spend."

Gerry Murphy sees investment as the way forward for digital

Overhaul

Prebble will also overhaul digital channel ITV2 and launch a new ITV sports channel and a website, ITV.com.

The plans for Ondigital are intended to improve cross-promotion between the ITV network and the digital service - and reduce duplication.

Murphy added the relaunch "is about more choice and better quality".

Ondigital is also working with the Government to improve signal strength to encourage a better take up.

Prebble will become one of the most powerful figures in the British media when he takes up the ITV post, which has lain empty since it was vacated by Richard Eyre in January 2000.

He joined Ondigital in July 1999.

Ondigital launched its service to customers in November 1998, but has not matched the success of rival BSkyB in attracting subscribers.