'We're not for profit'

In her first national newspaper interview, Freesat's managing director tells Owen Gibson about the challenges of launching the service - and why she hasn't ruled out a pay-TV service if viewers want it...

For a project that has been pretty low on the radar, she is perhaps an apt frontwoman. For just as ITV and the BBC hope Freesat will stealthily become a major player in the post switch-over digital landscape, so its managing director Emma Scott has proved an unsung hero of the free-to-air digital success story of the past five years. While former BBC director general Greg Dyke and marketing chief Andy Duncan took some credit for the success of Freeview, now in more than 14m homes, Scott was a central player. "Emma was definitely one of the key people behind the launch of Freeview," says Duncan, now chief executive of Channel 4. "She drove through a lot of the day to day operational stuff when there was a lot to do in a short space of time. She is very energetic, very focused, very good at making things happen."

Ironically, the Freesat idea has taken some time to happen. When it was first mooted five years ago, Dyke was riding the crest of a wave at the BBC and Charles Allen was working on the ITV merger. Since then a combination of regulatory drift and uncertainty from manufacturers and retailers about whether the idea made commercial sense left some questioning whether it would ever get off the ground. In the period it has taken to give birth to Freesat, the quietly unassuming Scott herself has had two children while continuing to work at the BBC.

Freesat is run as a separate not-for profit company, with ITV and the BBC as its joint shareholders. Each will contribute £3m a year and put their onscreen marketing muscle behind the project. Clearly nervous in her first national newspaper interview, Scott says: "We're very honest. We're not for profit, we're not in it to make money for my shareholders and people appreciate the concept of that." She will direct operations, and head a lean team, from the company's headquarters just off Oxford Street. In pride of place last week was a huge television pumping out Freesat channels in glorious high definition, while her team valiantly battled with their hangovers following the previous day's launch.

Scott says ITV's decision to break free from Sky and broadcast an unencrypted signal to all viewers two and a half years ago and plans to launch the BBC's HD [high definition] service were critical in making Freesat a viable proposition. The latter served as a commercial spur to the all-important retailers and manufacturers. There was one major factor that gave the Freesat concept renewed momentum: it soon became clear that with sales of HD-ready plasma sets soaring, it was an obvious way of delivering free-to-air programmes in high definition. In turn, that excited the retailers and manufacturers, who saw it would help them sell even more kit. "There are these 9.6m sets, they're selling incredibly fast. They've got predictions of something like 39m by 2012. And there's nothing to watch on them," says Scott.

With high definition broadcasting not possible on Freeview until after switchover, and then only on four channels, Freesat also provides a useful rationale for the BBC's investment of licence fee money in a format only hitherto available to those who could pay for it. The BBC and ITV will offer high definition broadcasts from launch, with more expected to follow. The other major target constituency is the rump of people who live in an area where they can't receive Freeview prior to digital switchover, still some 27% of the population, and don't want to take up Sky's own free satellite proposition. "There are a lot of people out there who still can't get more than four channels. For them, it's like Freeview all over again," says Scott.

The model follows the Freeview template. For £49 (for a standard box) or £120 (for an HD version), plus £80 for a satellite dish and installation, Freesat viewers will have access to around 200 subscription-free channels by the end of the year. Chris Anderson, the Wired editor in chief whose 'The Long Tail' became required reading for doom-laden media executives in 2006, will soon publish his new book Free, all about the rise of "freeconomics". Scott is a fully paid-up believer. "It's a bit like pay-as-you-go phones. There are all these people in this country who actually don't want to pay subscriptions," she says. Sky executives argue that, in a world where the BBC's commercial arm is about to launch a video-on-demand service and the web opens up all kinds of other possibilities for paid-for content, the old distinctions between pay TV and free-to-air are fast disappearing.

The unspoken rationale for Freesat is to give ITV and the BBC some control over their own destiny in the post-switchover world and not leave it in the hands of rival platforms such as Sky. "Freesat is a free platform and we want people to understand that. If we find there is an interest in pay TV services as a supplemental, then we'll address it," says Scott.

ITV has already sparked a spat that is eerily reminiscent of the handbags more than five years ago when Sky Digital first launched and ITV withheld its main channel in order to try to boost take-up of the ill-fated ITV Digital service. And we all know how that ended. ITV says that Sky is refusing to pay the going rate for its HD content and so will launch it exclusively on Freesat. Sky counters that it offered to help with start-up costs but is under no obligation to pay extra for a service that will ultimately become the standard broadcasting format, accusing ITV of depriving its 465,000 HD subscribers of its content.

"Sky will do what they want to do. We have to work alongside Sky in the satellite space," responds Scott, carefully. "Sky is a pay-television subscription service and their primary aim is to deliver value to their shareholders through driving subscription income. Their core offering is around sport and movies. If that what's you want, that's brilliant. The free market is very different and I don't think that's a core market for Sky."

Michael Grade and Mark Thompson, together on a platform for the first time since the former left the latter in the lurch at the BBC, were last week keen to point out the potential of the internet port on the rear of the sophisticated boxes. A version of the BBC's iPlayer could be delivered to Freesat viewers "within months". As the first digital TV service to launch in the wake of the explosion in broadband access in this country, it could be the "holy grail" device that links the broadband pipe to the television set, Scott believes. As a product of the BBC's sprawling policy unit (other alumni include Ed Richards and James Purnell), Scott spent several years working on special projects such as a broadband local news service. For someone who has spent that much time wading through internal BBC policy papers, she is refreshingly direct and plain speaking.

More immediately, ITV and the BBC's digital ambitions will now be at the mercy of Saturday staff in Argos, one of four retailers to stock Freesat. An inability to actually install the kit bedevilled the ITV Digital era. What will the reaction be when the first person falls off their roof trying to fix a Freesat dish themselves? "You know what, the British public aren't stupid," says Scott in a matter-of-fact manner, peering through her thick-rimmed glasses. "They're quite used to people coming around and installing things."

At launch, the channel line-up looks rather patchy. All the major terrestrials and their spin-offs are present and correct (or at least will be once Five, ever late to the party, sorts out its rights issues). But the likes of the Overseas Property Channel and Wedding TV don't exactly get the pulse racing. But Scott promises around 200 by the end of the year, including the cream of other free-to-air channels already featured on Freeview, plus some exclusive offerings and more HD content. "Freeview will become the new analogue. You've got to pay at the other end of the spectrum with great choice and premium movies. We see Freesat sitting in the middle, offering more channels, more flexibility, more HD. It just offers more choice in the market for consumers," she says, the simplicity of her analysis belying the complexity of the market.

Apparently the first Freesat boxes were flying off the shelves last week, with some stores sold out by Friday. But longer term success will depend on whether it has left it too late to establish a foothold in a world where the range of options for receiving TV content has already multiplied several times over since the launch of Freeview. We are heading for a mixed post-switchover ecology where a household might have Sky on their main set, a Freesat box in the dining room, the iPlayer running on a PC in the study and a Freeview box in the bedroom. But as the terrestrial broadcasters jostle to retain their relevance in the post-switchover world, this little-known unshowy individual could become a pivotal force in British broadcasting.