ITV Digital is dead. Long live digital TV

With the prospect of 1,800 jobs at stake, dozens of Football League clubs on the verge of bankruptcy and 1.2 million customers clamouring for their money back, it is not immediately clear how the collapse of ITV Digital might bring some benefits. Beyond the immediate crisis and uncertainty, however, there is more than a faint possibility of good news for several interested parties: Carlton and Granada shareholders, consumers, the BBC, even the Government.

For Carlton and Granada, ITV Digital has been a financial millstone from the beginning, draining the companies of £800 million so far, and continuing to lose money at the rate of nearly £1 million a day.

In research published this month by the Independent Television Commission, nearly three-quarters of those without multi-channel television said they were not interested in acquiring it. Earlier studies by the Consumers' Association and the Government found similar numbers of "digital refuseniks".

At a time when ITV is facing its biggest ever decline in advertising revenue and is competing against a resurgent BBC, its constituent companies can ill afford to see money which should be going on original programmes disappearing down a digital black hole. Assuming the two companies are not liable for the Football League contract, Carlton and Granada's investors as well as the ITV network might be quietly hoping for the demise of the digital operation.

For existing ITV Digital customers, there would be the consolation prize of their set-top box. Although they would technically belong to the defunct company, administrators are hardly going to send armies of bailiffs to pick them up.

Moreover, while subscribers will have lost all the pay channels, there will still be the freebies - in particular, all the BBC channels and ITV2.

In fact, from a consumer perspective, the closure of ITV Digital could remove one of the biggest obstacles to a comprehensive take-up of digital TV: a widely held belief that digital television is the same as pay television and must always involve a monthly subscription charge. It has been clear for years that while a minority is prepared to pay a monthly fee for access to live quality sport, most people find the five freely available terrestrial channels adequate. So the concept of more free channels is novel. If ITV Digital disappears, it leaves the BBC clear to promote digital terrestrial television as a means of getting free access to its digital channels for nothing more than the cost of an additional piece of equipment. Since new £99 plug-in adaptors are about to hit the shops within the next few days, the timing could be just right for a major promotional campaign which reinvents the digital terrestrial platform.

The new pitch would make the transition comparable to the switch from 405 to 625 lines or from black-and-white to colour pictures. There wouldn't even be an increase in the licence-fee to act as a disincentive.