Gnomic TV, revisited

Last week I posted on Top Up TV in the UK market, and today I was able to follow up with co-founder Ian West. The company hasn't officially disclosed subscriber numbers yet, but should do so in the new year. He did say that they had 20,000 in the first month after launch (April), and that things slowed down somewhat over the summer and ahead of the launch of new set-top boxes in August, and the promotional campaign which began in September. My guess is that the company is currently sitting at around 70 - 80k subs. Breakeven should be achieved at 250k subs, which the company believes will happen by April 2006.

Beyond the newcomers to Freeview, the addressable market also includes 400 - 500k legacy OnDigital boxes, as well as c.500k IDTV units installed at present. Mr. West remarked that 85 - 90% of Top Up TV users were complete newcomers to pay TV, rather than cable or satellite users spinning down to Freeview. Given that Freeview has been the only real source of multichannel growth in the past couple of quarters, this opens up interesting questions about the ability of Sky and the MSOs to actually grow significantly beyond their current sizes, without some change to pricing or product offerings. The conclusion I'm coming to at present is that the evidence suggests most of the candidates for Sky or CATV already have one or the other service, and everyone remaining wants something else. If this is in fact the case, then Freeview and Top Up TV are left to mop up whatever growth remains in multichannel. Top Up TV is topping up on staff to cope with the impending growth in its customer base - it is preparing to hire two new employees, taking total headcount to 10!