Raymond Snoddy on media: Five slots itself in to multichannel

The prospect of former Telegraph owner Conrad Black facing up to 40 years in jail - if convicted of criminal fraud - is enough to put a spring into anyone's step. Then Prince Charles has been silly enough to sue the Daily Mail for breach of copyright, thereby opening an amusing can of worms.

Not surprisingly, BSkyB appears to have beaten the Brussels regulatory rap and will now have to make do with a mere five of the six packages of live Premiership rights on offer.

To add to the general entertainment there has been the news that Boris Johnson is not leaving The Spectator on 8 December, or so he says; 9 December might, of course, be a different matter.

Just for the record, the Department of Culture, Media and Sport is neither revising its White Paper on the BBC nor changing the nature of the Trust that will run the Corporation in future, contrary to some reports. Sorry to be the bearer of bad news.

In such a rich maelstrom of jolly tales the fact that Top Up TV has entered a strategic relationship with Five could easily have passed you by, or produced little more than a momentary yawn.

Even if you have heard of Top Up TV, it all appeared rather dull. Money was not mentioned by the protagonists; nor was the size of the channel's stake or the extent of the strategic relationship.

As everyone knows, there are strategic relationships and then again, there are strategic relationships. Some are little more than a vague aspiration and stutter, soon fail and are quietly interred after a few inconclusive meetings. This one looks rather more important.

With an unerring eye for where the money is, chairman David Chance, the multimillionaire who was Sam Chisholm's number two at BSkyB, has in Top Up TV created what is essentially a basic-tier pay service for Freeview out of nothing. It appeared to spoil the purity of Freeview's marketing line - no extra charges after buying the set-top box - but what the hell: it may be messy but it appears to work. Top Up TV has low costs and a mere handful of staff, and the punters get 11 subscription channels such as Discovery and UKTV Gold for £7.99 a month.

All the signs are that the tiny business will have no difficulty reaching its break-even target of 250,000 subscribers by the middle of next year.

The word is that it is doing surprisingly well.

Top Up TV always looked like little more than a vehicle for topping up a few already bulging bank accounts through a strategic sale. This partnership appears to be a lot more interesting for both organisations.

Gerhard Zeiler, chief executive of Five owner RTL, has been trying to establish a multimedia strategy for Five for quite some time. There was the rather daft attempt to merge with Channel 4, which was deservedly torpedoed, followed by a sniff at Flextech, which may, or may not, be up for sale.

Has Zeiler at last found a cost-effective - or, indeed, virtually no-cost - way for his UK business to enter the multichannel arena? It looks as though he has.

If only ITV had managed to think of something sensible to do with its money, such as forging a way into the low-risk basic pay-TV market on Freeview, the fastest-growing digital platform in the UK.

It is difficult even to commit to paper the notion that ITV is instead considering spending £120m on acquiring the Friends Reunited website without starting to break out in a rash.

True, the Top Up TV-Five relationship could disappoint or founder like any other. But it brings together Chance's knowledge and entrepreneurial skills with RTL's extensive resources.

It could be the beginning of a beautiful relationship that might last longer than the amusement caused by the antics of Conrad, Charles or Boris.

30 SECONDS ON ... TOP UP TV

- Top Up TV was launched in March 2004 by David Chance and Ian West, both former executives at BSkyB.

- The service, which costs £7.99 a month, gives subscribers access to 11 pay-TV channels, including Turner Classic Movies and the Cartoon Network, in addition to the free-to-air Freeview line-up. Subscribers receive a viewing card that they must insert in the slot in their set-top box.

- Top Up TV signed up 20,000 customers in its first month, and had attracted 140,000 by the beginning of 2005. It aims to reach its break-even target of 250,000 next year.

- The service suffered a blow in May when Channel 4 switched its popular E4 offshoot to the main Freeview platform. Top Up TV replaced E4 with British Eurosport.

- Five has an existing deal with Top Up TV: it leases the extra Freeview spectrum it was gifted by the government to the pay-TV company.

This article was first published on Marketing