Greg Dyke On Broadcasting

The sky's the limit for Top Up TV if it plays its Freeview cards right

One of the more interesting but little publicised moves in the corporate world of television recently came towards the end of last year when Five (or Channel Five as it used to be called) decided to buy into Top Up TV. Neither RTL, the owners of Five, or Top Up itself have said very much about the deal, other than that Five has made a "strategic investment" that will enable it to launch new free-to-air channels on Freeview in 2006.

I presume what this means is that, in return for an investment in Top Up, Five is to get back some of the Freeview spectrum it received when it won its original licence and later "leased" to Top Up, only for its value to go through the roof. With Channel 4 paying £12m a year for the last Freeview channel to be auctioned, Top Up clearly got a bargain with its original deal.

With Five now keen to launch additional channels, just as ITV and Channel 4 have done, a deal buying into Top Up was probably its best way of getting the spectrum it needed.

Created by two former Sky executives, David Chance and Ian West, Top Up TV was one of the bidders for the digital terrestrial television spectrum that was handed back to the Independent Television Commission when ITV Digital went bust back in 2002. Its bid failed when the ITC decided to support the Freeview idea, pioneered by the BBC.

But Chance and West were not put off by this and went around acquiring other digital terrestrial spectrum from the likes of Five and finally launched a service in May 2004. Top Up TV offers 11 channels, including the likes of UK Gold, for £7.99 a month, and is confident that the service will break even by this summer when it reckons it will have 250,000 subscribers.

Top Up's slogan is "It's what the slot's for", because you need to put a Top Up card into a slot in your set top box in order to receive the service. The problem Top Up faced initially was that virtually none of the Freeview boxes sold in the first couple of years had a slot, which meant that the only boxes that could actually receive Top Up TV were the old ITV digital ones still in people's homes, of which there are now 290,000. But in the past year all that has changed, with some 15 per cent of the eight million Freeview boxes in peoples' homes now having a slot for a card, and all the digital televisions on the market being Top Up compatible.

With these compatible Freeview boxes now selling for as little as £30 there is a real chance for the service to take off, but that will depend on two things: marketing and the programmes on offer.

Neither Chance nor West see Top Up TV as a full-on competitor to Sky, or at least they won't admit it is. They say they see it as a niche player piggy-backing off the amazing success of Freeview, but at some time someone with big money to invest may be able to exploit the true opportunity that Top Up offers. It could be that Five has already recognised that opportunity.

While Top Up will always be spectrum-constrained, and there is not enough channel capacity on DTT to allow it to compete full on with Sky, it could certainly challenge in Sky's most popular areas such as sport, and particularly football.

Just say that someone other than Sky bid for, and won, some of the Premier League rights on offer next summer. They could offer the matches on a stand-alone basis on Top Up TV and football fans could then buy the Premier League without having to pay for the full Sky service, which they have to at present.

Now, it's unlikely that this will happen this time around, but it's not impossible that it will happen some time in the future. If it did, Top Up would emerge as a true competitor to Sky.

The problem is ITV's name

ITV is due to unveil the results of a rebranding exercise later today, with new logos and channel idents for all four ITV channels. What will be interesting is to see if the new branding says anything about ITV that the rest of us recognise. The danger of letting marketeers control the branding of a channel is that it's not unknown for them to create a brand that doesn't reflect what the channel is really about.

On the other hand, to be fair to the marketeers, when BBC1 was rebranded with its current logos of dancers, acrobats, rugby players and the rest, I thought it more accurately reflected the warmth of the channel when compared to the rather sterile revolving globe that went before.

The truth is that rebranding a channel is not easy. One issue the ITV marketeers must have faced is the current image of ITV. Through its branding it desperately needs to create a more upmarket and younger image for its channels at a time when the main ITV channel is increasingly becoming the opposite.

I suspect the biggest problem they have had to grapple with are the letters ITV themselves. They so represent a time and a type of programming that is past - brash and down-market - that you wonder whether anyone considered changing the name altogether. When I was director of programmes at LWT, I suggested that we should change the name to Three. Maybe it wasn't such a bad idea after all.