BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Wednesday, 17 January, 2001, 14:51 GMT
Ondigital fights for growth
Digital television screen
Digital television could replace traditional personal computers
UK digital television company Ondigital has reached its sales target and says it is able to double this within two years.

But a closer look at the figure reveals a high proportion of users who are choosing not to renew subscriptions and some analysts are dubious whether next year's targets will be met.

Ondigital claims it can be the UK's leading digital television provider, but it is still a long way behind BSkyB's Sky Digital which has over four million users.

And it has ambitious aims to reach the break-even point of two million subscribers by the end of 2002.

"It is not a hope, it is entirely realisable," said Ondigital's chief executive Stuart Prebble.

Subscriber drop-outs

But the company is seeing between 15 and 20% of its existing customers failing to renew subscriptions.

It is this so called "churn rate" that caused investor confidence to waver on Wednesday, despite the successful arrival at the landmark of one million customers.

"It's cheaper to keep a customer than it is to acquire a new one so we work very hard at it," said Mr Prebble, who expects the churn rate to be reduced to 10-12% over the next three years when the customer base stabilises.

Ondigital sales grew by 134,000 in the fourth quarter last year and the sales for the full year were 83% higher than the previous year.

But the full-year figure includes 37,000 customers who have not switched on their service or who received free subscriptions.

Delayed flotation

Ondigital is owned by independent television broadcasters Carlton Communications and Granada Media.

Carlton shares had lost 24 pence by 1330 GMT, while Granada was 10p lower.

And the negative publicity surrounding the churn rate could be one factor delaying Ondigital's long-anticipated flotation.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

17 Aug 00 | Business
Digital TV use spreading
11 Dec 00 | Business
Carlton sells Technicolor
10 Jul 00 | Business
Net TV 'to overtake PC'
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories