British Digital needs 2m subscribers to break even

BRITISH Digital Broadcasting, the joint venture between the television groups Granada and Carlton, yesterday said it was on track to launch digital in the fourth quarter of this year and claimed it would need 2 million subscribers to break even.

But in their first formal presentation to analysts, BDB officials gave no indication when the company might reach that level.

"It will make profits of more than pounds 100m with 3 million subscribers, and with 5 million subscribers that figure rises to pounds 250m," Stephen Grabiner, BDB chief executive, said in a statement after the meeting.

Disclosing their first detailed forecasts, company officials highlighted the perceived advantages of their terrestrial venture over its satellite and cable rivals. With the launch of digital television this year, British viewers will be able to plug into a plethora of channels offering sharper images and CD-quality sound compared with the five standard channels that most people currently watch.

Three digital television groups will be vying for viewers' subscription fees, with BDB and the satellite company BSkyB seen as the biggest rivals in the race to dominate the pay-television market.

Shares in the media companies were little changed after the news, with Carlton up 9.5p at 517, Granada down 4p at 1087, and BSkyB up 1.5p.

BDB's launch will offer at least 15 channels with a capacity of up to 30 compared with the 200-channel satellite service that BSkyB plans to begin rolling out next month.

However, BDB's terrestrial service will be available over viewers' existing televisions and aerials, whereas consumers will have to buy a new satellite dish to receive BSkyB's channels.

Regardless of which service they choose, viewers will need to buy a set- top decoding box for about pounds 200 to get the new digital channels.

BDB said a recent poll by the research firm NOP found that consumers most interested in taking up digital television were five times more likely to subscribe to terrestrial rather than satellite services.

The research also indicated that up to one million people were prepared within the first year to pay pounds 199 for a set-top box.

BDB said it would develop a call centre with British Telecom to manage customer service.