KEY POINTS:
The platform war between Sky Television and Freeview moved to a new arena today with the "soft launch" of the Freeview digital terrestrial service for free-to-air TV.
Sky says is too expensive to have its free-to-air channel Prime on the Freeview platform but Freeview insists the delay is
designed to slow uptake for Freeview.
The Freeview digital terrestrial television (DTT) official launch by Prime Minister Helen Clark is on April 14.
But Freeview general manager Steve Browning said that channels on the DTT would be up and running from today and retailers would begin selling new set-top boxes that enable people to pick up UHF signals from towers.
He expected the DTT service would be more attractive and cause a big increase in Freeview users.
Digital television provides clearer signals and the Freeview digital platforms will be the only source for free-to-air television when analogue signals are switched off, possibly in 2012.
Today's launch also includes the start of the first high-definition TV broadcasts - initially on TV3 but planned for TVNZ in time for the Olympics - which Freeview hopes will boost sales.
Prime TV is not joining the party.
"It would cost us $2.5 million a year to put Prime on to Freeview digital terrestrial" said John Fellet, chief executive of pay TV company Sky Television which bought Prime in February 2006.
"That is about half of Prime's programming budget. We'll join Freeview when it makes financial sense for us and it does not right now," said Fellet.
The move was planned when DTT reached 10 per cent of the population.
Prime also did not join Freeview when it started its satellite service 11 months ago, saying that the Freeview signal strayed into Pacific Island territories and this would put it in breach of rights deals it had for sports events.
Freeview's Browning acknowledged the rights issue.
But he says Sky is keeping Prime off Freeview terrestrial to discourage uptake of the new digital service.
"People find it hard to understand why Sky is not there," he said claiming that the Freeview arrival had affected Sky.
Fellet said that the $2.5 million charge it would have to pay state-owned transmission company Kordia to be on Freeview was too much. Kordia would not detail costs.
But Browning dismissed Fellet's suggestion Prime was staying off Freeview because of cost.
A Freeview source - not Browning - said that the cost of broadcasting a standard channel on the digital terrestrial platform would be around one sixth or one eighth of the $2.5 million figure.
Browning said that in four years Freeview would be in one third of New Zealand homes. After 11 months there were around 80,000 set-top boxes sold for the satellite service which would be the main source for the 25 per cent of the country that cannot receive DTT signals.
