How important is the launch of BBC iPlayer for Freesat customers?
"I think it's very important for Freesat viewers to know that we are at the cutting edge and that we are innovating for them, and that once you buy the equipment it's not a case of, 'right, that's all you get'. We've worked really hard with the BBC, and we want to make sure that we're using all the capabilities of the box. Getting the first on-demand service on-board is a big milestone for us. ITV Player is now following suit and we hope that others do too. That is partially a recognition from broadcasters that on-demand on the 'big TV' in the corner of the room is important for people. PC viewing of on-demand is great but it's not as good quality and it's not always what people want. So it's important, but it also demonstrates our desire to be influential. We have a roadmap of innovations outside of what we have outlined. We will add more functionality in the future, whether that is content-based or technical."
What are the realistic chances of the iPlayer beta expanding to all Humax boxes as planned before Christmas?
"I'm cautiously optimistic. It's going to be great for everybody because all the equipment sold today is iPlayer-enabled. That's also what retailers will be telling customers, 'if you buy a Panasonic Freesat integrated TV, iPlayer will be launching on it in the New Year'. Initially, it will be Humax boxes but then it will move to all equipment, and it will be a very rapid rollout. I'm pretty certain that at the end of Q1 next year everything will be sorted, but we are right to be doing it the way we are. If we launched it to all the products at the same time, it would just be dangerous. Cautious is best and ultimately, it means that sales pick up in the New Year because people know that it's there."
Will on-demand services ever come to standard definition Freesat equipment?
"We won't go onto SD boxes because they are not designed to support on-demand services. They are entry-level products, very much designed for second set usage. Sales of them are also pretty low compared to HD boxes. Given the price difference between SD and HD, there is actually very little difference."
You just announced some pretty strong sales figures, including a heavy bias towards HD units, why do think that is so?
"Our sales of boxes and IDTVs are around 80/20 at the moment towards HD. SD sales are diminishing, which could be people recognising that the future is HD. If you look at our figures compared to Sky's, then I think we're doing rather well. I think that comes back to the fact people are now understanding the benefits of HD. I do think that HD is a family viewing experience. I genuinely do. That also comes down to what the broadcasters are sharing as well. We know from our viewing panel that people do get together to watch the football in HD, and Strictly Come Dancing and live events. So I think that HD is becoming the mass medium now, and it's absolutely the main driver for purchase of Freesat. There is also a lot of word of mouth understanding of HD, passing it on to others."
How will the launch of Freeview HD impact on your sales?
"I think the fact that Freeview HD will be available next summer is great because there will be more content available. The key differential is that Freesat is obviously available across the UK and you can get it anywhere. We haven't got issues with transmission areas. Plus the fact that we've had BBC HD and ITV HD for so long as a subscription-free platform. I think the more platforms with HD is brilliant because it will ultimately drive the volume of HD content from broadcasters. In a recession it is obviously tough for broadcasters to invest in HD. But the more impact from eyeballs you get, the more money you have coming in. It's a virtuous circle. We're really lucky in that we will have an install base of over one million HD owners by the time Freeview HD really gets going. So we have presence in the market and the retailers understand us. We've got it built into tellys and we know that it works and that it works across the UK. I think that's a pretty good USP. If you include iPlayer and ITV player, then that's more good value-adds."
What plans do you have to bring more HD channels onto Freesat?
"I'd love there to be more but that's a question for the broadcasters. We are always looking to expand our HD portfolio. We did some work with Viacom channel BET this year, where we took one of their programmes and broadcast it in HD. So what we're looking to do now is allow broadcasters to carry certain aspects of their schedules in HD. We are doing quite a lot of innovative technology and editorial work to help broadcasters, because to put their entire schedules out in HD is pretty pricey. This is why the BBC and ITV are really the only ones doing it right now. But we want to make it easier for more broadcasters to do it. A lot of even the smaller broadcasters now capture in HD, they edit in HD and so the next barrier for them is transmissions costs. So we're trying to do work around that with them. Fingers crossed we will have more HD channels next year."
And what about new SD channels?
"I'm certainly not going to give you projections but we are always talking to the channels. We have got some launching in the next couple of months and there is always the rotation of channels coming in and out. We have around 140 channels now, which is pretty much enough for most people. It also brings revenues in which allows us to grow as a business. I think we've got a very good spread, with a strong news offering. That brings huge benefits for us. We work very closely with many of the non-PSB channels to make sure that they are promoting Freesat. We have a strong relationship with our channels, which we are very proud of. I think when the ad market picks up the free-to-air market will also pick up."
What about pushing 'over-the-top' services for HD content, such as pay-per-view?
"Push over satellite is pretty expensive way of doing it for HD. But you can do pay-per-view and so forth. As the BBC has said, the ambition is certainly to get more HD content through on-demand but that depends on the broadband networks in this country. When we produce the Canvas Freesat box, next year hopefully, maybe some progressive download might be something that will eventually come to pass. I think there is functionality to do it but it's down the other end of the chain in terms of the broadcaster's willingness to meet the costs of transmission."
Do you think that customers want more specific content in HD, such as live sport and high-profile dramas, rather than extensive schedules?
"I think the type of content really influences the type of experience you have. BBC HD can obviously cherry pick the very best content, but increasingly almost everything they are producing is in HD, which is brilliant. At first, they were just putting football and high-end dramas on Freesat HD, but that is expanding and I think that reflects on the feedback they are getting from audiences. If the broadcasters show a couple of hours of HD a night, then people will go back and watch that channel and it creates a halo effect across the wider ITV and BBC channels. In North America and Japan, it's quite the norm to have everything in HD, but there are much bigger audiences and bigger events."
The BBC has recently stirred controversy for the perceived decline in picture quality on its BBC HD channel. What are your views on the situation?
"I think [head of BBC HD] Danielle [Nagler's] response on Points Of View was, I agreed with her. I think it's a bit of a geek issue, if I'm honest. I don't think that regular punters really recognise a recognisable dip. And as Danielle said, it's down to the particular programmes that you are watching and how it is optimised for different types of programmes. On satellite, it's a pretty high picture quality. Ultimately, it's about the overall effect of HD, whether it's the surround sound you get with it or how they have shot it. And I think they are right to be experimenting with it to see which things work out. I just don't think it's an issue, I really don't. But it's a very subjective decision, a subjective judgement. You'd have to talk to Danielle about it, but we have no complaints about the picture quality of BBC HD."
And what about the prospect of 3D TV services?
"I've seen lots of films in 3D, and 3D TV is interesting. [But it's a] watching brief. It will take the mainstream broadcasters moving over. The manufacturers, especially the Japanese ones are working with the Hollywood studios on that, and I went over to Japan earlier in the year and 3D is really big there. It's a Hollywood studio play, really, but I think that HD really needs to bed in it this country before 3D can get going. 3D is a very unique viewing experience and it doesn't suit everybody. I enjoy is at the cinema as a spectator experience. I think it will absolutely happen on TV, but not for a while."