Channel 4 unveiled plans to start selling its entire programme output over the Internet from next month, creating a service that is expected to revolutionise viewing habits.
The broadcaster of Big Brother and Shameless is allowing viewers to watch programmes broadcast in the past 30 days for 99p from December 6, and download them to own for £1.99.
Andy Duncan, Channel 4’s chief executive, predicted that in five years around a third to a half of all viewing would be time-shifted — that is, not as part of the regular schedule — whether through its Internet television service or other catch-up offerings.
The company said that it hoped to start making a profit from its foray into Internet pay-television from the third year of operation. Mr Duncan said that Channel 4 was making an investment “equivalent to a new channel launch” — implying a spend in the low tens of millions.
All the broadcaster’s UK content and a handful of American material will be available for purchase, although there will also be some free material to woo viewers. Desperate Housewives, made by Walt Disney, will be part of the agreement, but few other US programmes have been cleared by producers.
Both the BBC and ITV intend to follow with similar services, but the BBC’s ambitious plans to make all its programming available online free for seven days after original transmission have to approved by the Governors. ITV, widely considered to be lagging behind in this area, is not ready to launch a competing service until next spring.
From February, viewers will also be able to buy a £3.99-a- month subscription to all of Channel 4’s output. Rod Henwood, the channel’s new business director, said that this would help to “turn viewers into customers”. A film subscription service priced at £4.99 a month will also be on offer.
Mr Duncan was careful to emphasise that he wanted the broadcaster’s Internet television service to be one of a range of ways in which viewers can catch up with programmes they missed on the traditional channel. The broadcaster already provides a free catch-up service on NTL, the cable operator. Since its launch last month, programmes have been downloaded 1.5 million times, and yesterday a new deal with BT’s video-on-demand service, BT Vision, was signed.
The advantage of delivering television direct over the Internet, is that Channel 4 controls the incoming revenue and the customer relationship. New technology is emerging that will allow programmes downloaded on to a home computer to be transmitted via a home wi-fi network to television.
However, Internet transmission is hampered by the speed of web connections. At typical broadband speeds, a one-hour programme will take between 90 minutes and two hours to download, but connections are speeding up.
No advertising will be carried on the programmes or on the special website initially, but Channel 4 says that it hopes to generate ad income from April. However, despite the financial plans, Mr Duncan said that the new technology would only “help to close the funding gap” that the state-owned broadcaster sees emerging.
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