Brand Failures
Brand Failures Brand Failures
214 Brand failures 76 ONdigital to ITV Digital How the ‘beautiful dream’ went sour In 1998, a new UK digital TV channel was introduced which aimed to take on Rupert Murdoch’s BSkyB and convert millions of middle-England viewers to pay-television with a new platform accessible via set-top boxes – digital terrestrial television. In 2002, however, it went out of business. ‘We thought we could take on Sky, through its Achilles heel: it was the least trusted by the audience,’ says Marc Sands, the first director of brand marketing for ONdigital. ‘We would differentiate ourselves by our behaviour, clarity, and transparency of prices. That was the beautiful dream. Plug and play.’ However, it soon became clear that it would be difficult to deliver the special software and set-top boxes, and cope with patchy coverage across the country. ‘By summer 1999, I saw that the problems were terminal,’ says Sands. ‘For those for whom it didn’t work, when the pictures froze, the promise was shattered. We never got past first base.’ Then the company’s chief rival, BSkyB, raised the pressure by paying retailers money to recommend its system. BSkyB’s decision to give away free set-top boxes meant ONdigital had little choice but to follow suit, a move that cost an extra £100 million a year. ‘I think the decision by ONdigital to go head-to-head with BSkyB was probably a mistake,’ said Chris Smith,
Rebranding failures 215 former secretary of state for Culture, Media and Sport (who oversaw the government’s digital plans until June 2001), in an interview with the Guardian. ‘They should have aimed for a different part of the market.’ In 2001, ONdigital was rebranded ITV Digital, linking it to an established and trusted brand name (ITV remains the most popular terrestrial channel in the UK). However, the same problem remained. Viewers needed to buy completely new equipment, which didn’t require a dish. In other words, it was a completely new platform. The technical problems were also an issue. The software used in the settop boxes didn’t have enough memory and crashed frequently. As former customer Bridget Furst explains: I signed up for ONdigital in November 1999 as we live in a conservation area and were told we couldn’t have a dish. But all the technical breakdowns drove us dotty. The picture would freeze without warning, three or four times a week. You had to phone for advice, give your security password, queue for technical assistance, and then you needed 15 fingers to put things right. I was told that their software couldn’t cope with the BBC channels on the platform. Graham Simcocks, the company’s director until 2001, realizes that the technological issues hindered development. ‘The business failed to take seriously enough the whole range of technological issues: why the picture kept disappearing, the need to boost its power. That was the biggest reason for customers being put off. Then there were homes that were supposed to be within a reception area but still had problems,’ he says. Another factor was the lack of incentive to buy ITV Digital. Although ITV’s major networks Carlton and Granada were behind the company, they didn’t provide exclusive access to their major programmes. ‘I think Carlton and Granada didn’t support it enough,’ says former ITV Digital sales director Matthew Seaman. ‘They should have given it more exclusive programmes. First runs of Coronation Street. Why not Pay-television isn’t something that just happens. It needed a huge, bold move, equivalent to Sky’s Premier League. But the shareholders never felt they could risk the ITV crown jewels.’ Few could understand exactly the point of the network. At first, it had clearly tried to differentiate itself from BSkyB. Stephen Grabiner, ITV Digital’s first chief executive, once referred to Murdoch’s multi-channel vision
- Page 172 and 173: 53 Schweppes Tonic Water in Italy I
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214 <strong>Brand</strong> failures<br />
76 ONdigital to ITV<br />
Digital<br />
How the ‘beautiful dream’ went sour<br />
In 1998, a new UK digital TV channel was introduced which aimed to take<br />
on Rupert Murdoch’s BSkyB and convert millions of middle-England<br />
viewers to pay-television with a new platform accessible via set-top boxes –<br />
digital terrestrial television. In 2002, however, it went out of business.<br />
‘We thought we could take on Sky, through its Achilles heel: it was the least<br />
trusted by the audience,’ says Marc Sands, the first director of brand<br />
marketing for ONdigital. ‘We would differentiate ourselves by our behaviour,<br />
clarity, and transparency of prices. That was the beautiful dream. Plug<br />
and play.’<br />
However, it soon became clear that it would be difficult to deliver the<br />
special software and set-top boxes, and cope with patchy coverage across the<br />
country. ‘By summer 1999, I saw that the problems were terminal,’ says<br />
Sands. ‘For those for whom it didn’t work, when the pictures froze, the<br />
promise was shattered. We never got past first base.’<br />
Then the company’s chief rival, BSkyB, raised the pressure by paying<br />
retailers money to recommend its system. BSkyB’s decision to give away free<br />
set-top boxes meant ONdigital had little choice but to follow suit, a move<br />
that cost an extra £100 million a year. ‘I think the decision by ONdigital to<br />
go head-to-head with BSkyB was probably a mistake,’ said Chris Smith,
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