For Broadcast November 12, 2008

As the recession bites, Freeview is increasingly the place to be.

The advertising recession seems to be forcing a rethink about how to make money on Freeview. The Freeview shuffle has gone up tempo in the last month with Turner dumping Nuts TV from the platform in favour of CNN, Virgin Media losing one of its two slots and Discovery deciding to stump up a reported £10m to get its first foothold in free TV in the UK.

The changes are about finding the best way to make money as the ad recession starts to bite. Broadcasters are cutting costs (and jobs) and looking for different/better/more revenue streams while Freeview capacity owners Arqiva and SDN want to maximise the value of their frequencies.

For Turner, Nuts TV is expensive and CNN is tried and tested – and fully amortised. The sad thing is that Nuts TV was the first effort by Turner to work closely with a print brand from another part of parent company Time Warner. After a year of operating the laddish channel that – unlike the eponymous magazine – kept the girls fully clothed, the proposition just wasn't cutting it financially. Content will move to an online channel where, one imagines, the content can be brought closer in line with the print title.

"In this current financial environment, if you don't have a lot of content that you own yourself, it's going to be very difficult to go along and buy up content and make it work with a new [TV] brand," says Dee Forbes, senior vice-president and general manager Turner Entertainment Networks. "We've all got businesses to run – so let's play to our strengths."

Meanwhile, Discovery, frustrated that its deal to be part of Picnic, the Sky-led pay-TV proposition for Freeview, has been thwarted by what Sky calls the "regulatory logjam" of getting Ofcom approval, decided to put up a chunk of cash and launch a free-to-air channel with a "best-of" feel on Freeview.

In much the same way as Virgin Media's Virgin 1 channel, the new Discovery channel will let the pay-TV broadcaster reach 10 million more homes and tap into an ad stream that, if not as big as it was before the ad recession, is at least new. And note that it won't be about commissioning a bunch of new content, but repurposing existing content.

You could almost hear the gnashing of teeth at Virgin Media when the company revealed that it had been outbid for one of its two Freeview slots (home to Price Drop TV and Bid Up TV) after its contract came up for renewal. Losing revenue is not good but especially when it comes on top of plans to cut 2,200 employees, or about 15% of its workforce, by the end of 2012. On the plus side, despite shelling out a maximum of £38m to get Sky's flagship channels back, Virgin is getting the same for its channels on the Sky platform, ie. £30 million minimum and up to £38 million if the channels perform well enough.

Freeview itself is also going into offensive mode, putting £6.5m behind a Christmas campaign to push the new FV PVR set top boxes that bring Sky+ functionality to the platform.

And it looks like there is more to come with another two or three slots being put out to the market over the next weeks. At this week's Media Guardian Changing Broadcast Summit, Sky suggested that BT Vision, as one of the main critics of Sky's Picnic proposal, was less than committed to offering its viewers a strong TV line-up, implying that BT Vision is more of a broadband play for BT.

BT will dispute this, but the point is that everyone wants to get a piece of Freeview, which, especially in a downturn, looks like a good place to be. And it will only get better as we move closer to digital switchover. Freeview is still the cheapest way to "go digital" and there are still a lot of TV sets out there looking for a digital solution. The appetite for Freeview may push the prices for a slot higher still.