The end of television as we know it

Henry Porter looks behind the digital revolution and declares Rupter Murdoch the undisputed winner

Rupert Murdoch's decision to join a three-way venture with Granada and Carlton to set up digital terrestrial television in Britain has, in one move, completely confounded his critics. Until this week his plans were so far in advance of the BBC and ITV companies that it was feared he was about to make himself the gatekeeper to the digital revolution. Now it is announced that he will share the technology that threatened to exclude all the terrestrial broadcasters and, moreover, that he is going into business with two of the ITV companies as an equal partner.

It is a brilliantly pragmatic strategy. At the same time as dispelling the anxieties about his monopolistic ambitions, he has got the foothold he has long desired in British terrestrial TV, which means he will be able to introduce Sky services to the audience that has been reluctant to buy a satellite dish. As if this were not enough, for the mere pounds 100 investment he is now certain to sell the million set top boxes that he is has ordered for the launch of satellite digital service.

Carlton, Granada and even the BBC, which has committed itself to launching a pay TV service through the new company British Digital Broadcasting, will also be congratulating themselves this weekend. They no longer have to consider developing an expensive technology to compete with Mr Murdoch's. Instead there will be an industry standard and it pretty much guarantees the successful launch of terrestrial digital TV in Britain.

The unforeseen merger of such disparate interests will do much to reassure the regulators and Government. It seems responsible and good for business, as well as apparently protecting the interests of Britain's premier broadcaster, the BBC.

This revolution has baffled the British TV audience which, understandably, has never come to grips with the difference between analogue and digital signals. Squeezing 12 channels into the space where there was once one seems to defy a law of nature. In the next 18 months, however, that audience will have access to a new terrestrial Channel (Channel 5, which launches in two months' time), 150 channels with BSkyB's digital satellite service and a further 30 with the terrestrial digital service.

So much information and choice is bound to affect British culture, which has hitherto been glued together by the lack of choice on TV. The staple coverage of the popular press, for instance, is largely governed by the programme of the moment or the twists and turns in soap operas. Those of us who enjoy discussing the great serials produced by the BBC or Jeremy Paxman's interview with some benighted politician, will look blankly at each other and have to think of something else to say.

Also important is the question of standards. The effort that has been previously concentrated on four channels will be spread over a huge number of hours and that is certain to compromise quality. We will begin to revere TV less and come to regard it as a shopping mall with no particular character or culture. In fact, these enormous changes, announced this week, will almost certainly result in a tidal wave of American culture which, although not bad in itself, will inevitably challenge the sense of Britishness that is found on TV.

There is another point that emerges when you talk to the people who will be running the channel explosion of the next few years. All of them, without exception, are obsessed with the technology, with buying rights and cutting programme costs. None of them talks about their passion for making great TV. It is all about market share, and that is an ethic which is likely to become more common, even at the BBC, which is for the first time entering the arena of pay TV, with up to five subscription channels.

The changes will take some while to become clear and, in commercial terms, it is difficult to predict who will come out on top. One thing is certain and that is that cable TV, which has a much greater capacity, is seriously threatened by the new alliance which represents a marriage of interests between companies that deliver programmes through satellite dishes and the conventional TV aerial.

What is so clever about Mr Murdoch's participation in the venture, is that BSkyB services will now be delivered by dish and aerial. He has increased his base, and News Corp is well placed for the next part of the struggle between the companies that are primarily concerned with delivering programmes through satellite and aerial.

That is some way ahead but, if nothing else, we have learnt over the past 10 years that Mr Murdoch has a stupendously good grasp of modern technology and its commercial applications. He also has an uncanny prescience about what is acceptable to an audience. If he is wrong, as he was about films selling BSkyB, he adapts his strategy quickly, in this case to using sport as his main selling weapon.

The boards of Carlton and Granada and also the board of management at the BBC can be certain that Mr Murdoch has moved into terrestrial TV for a very good reason and that, while he appears magnanimously willing to share his technology, they have many struggles ahead. Carlton and Granada would do well to remember that it is not in Mr Murdoch's nature to remain an equal partner.

There is nothing to stop him mounting an attack on the shareholding of either Granada or Carlton and then extracting certain advantageous conditions when he agrees to retreat. There is also nothing to prevent him from throwing his weight around with the BBC, which has already agreed to use his digital satellite service and, in 18 months' time, will be relying on another company part-owned by him for the broadcast of its subscription channels.

The BBC put its trust in Mr Murdoch before when using his Star satellite to broadcast to China. As soon as the Chinese objected to the BBC's news coverage, he hastily removed the BBC from his service.

However benign and co-operative he seems this week, he is simply not a man to be trusted.