£8 for 10 channel Freeview top-up

A TV service is being launched next month offering viewers more than they can get from Freeview, but less than a satellite package.

Top Up TV is the brainchild of former senior BSkyB executives David Chance and Ian West. It will provide subscribers with ten digital channels for £7.99 a month, with no minimum subscription period.

The service uses the same through-the-aerial technology as Freeview, the free digital television operation run by the BBC, BSkyB and Crown Castle.

The extra ten channels, in addition to the 26 available via Freeview, are: UK Gold, E4, Cartoon Network, Discovery, UK Style, UK Food, Bloomberg, Boomerang, Turner Classic Movies and Discovery Home and Leisure. Subscribers can also pay for adult entertainment channel Television X.

Top Up is using the same technology as the ill-fated ITV Digital, the pay television service jointly owned by Carlton and Granada that collapsed in 2002.

Chance says that his research shows that between 800,000 and one million former ITV Digital customers still use their set-top boxes to receive the free-to-air channels on Freeview.

With a viewing card from Top Up, these boxes will be able to receive the extra channels. The research also shows that more than half of Freeview customers using ITV Digital set-top boxes said they were interested in subscribing to Top Up.

ITV Digital took on BSkyB as a premium pay-television provider with top sports and film channels but collapsed with losses of £1.2bn. Top Up TV, Chance says, is a different proposition.

'We are not competing with Sky and cable, nor could we, but we do see ourselves as complementary,' he said. 'We are offering a little bit more good television for a modest price each month. We will deliver value for money in a way that ITV Digital did not because it offered an inferior product for the same price as its main competitor.'

The economics of the respective services are also very different, says Chance: ITV Digital needed more than 1.5m subscribers to break even while Top Up TV reckons it can do so with 250,000, not least because its fixed costs will be low. The cheapest Sky package is £13 a month, though Sky Sports One costs at least £25.50.

Top Up is backed by Continuum Media Partners, in which the main shareholder is Access Industries, a private equity firm in New York. Total funding is likely to be between £10m and £20m.