Hogg insists TV channel is on course

Racing

Ian Hogg, the chief operating officer of Attheraces, insisted yesterday that the consortium which paid £307m for racing's media rights in 2001 will start to show a profit "in late 2004 or early 2005".

However, he was not prepared to offer any precise figures on the number of account holders or the amount of betting turnover that the Attheraces digital television channel has generated since its launch in May last year.

Racing, from top to bottom, must hope that Hogg is right, since the Attheraces deal is crucial to the sport's continued prosperity. Yet the market value of both sports rights and new media companies has crashed since the Attheraces deal was signed in June 2001. Their business plan also relies heavily on raising millions of pounds from interactive TV betting. The charge they face is that they paid way too much and they will never get enough punters to foot the bill.

Hogg conceded that the Attheraces on-screen sign-up procedure, which takes several minutes, one remote control and a very agile index finger to complete, is a barrier to would-be punters. However, he insisted too that new, faster sign-up routines will be released in February and again in May and that once punters climb over this initial barrier, they become loyal and frequent customers.

He was also at pains to stress that interactive betting is not the company's only revenue stream. "We have four areas of revenue generation," he said. "The others are overseas rights sales, which will bring in £7m in 2003, distribution and production contracts like those they have with BSkyB for their evening racing programmes, and advertising." However, the operating costs of a television channel with 80-odd staff are substantial and if betting revenues do not meet the forecasts, Attheraces could turn into a money pit as far as its shareholders - Channel 4, BSkyB and Arena Leisure - are concerned.

Hogg insisted that his company has no plans to introduce a subscription charge for viewers. "All our models," he said, "suggest that we make more money by carrying advertising than we would by introducing a subscription charge."

However, the bad news for punters is that Attheraces has no immediate plans to add to its roster the 10 racecourses, including Leicester and Exeter, that were broadcast on the now defunct Racing Channel until earlier this month. It is also "odds-on", in Hogg's opinion, that the current experiment with a live race every weekday lunchtime on Channel 4 will not be extended beyond its trial period, which ends in March.

Perhaps the most significant comment yesterday, though, was Hogg's admission that interactive betting is no faster or easier than phoning a bookmaker. Placing a bet through your television, he said, can take as much as 30 seconds.

Most telephone bookies will sort you out in that, or less. To succeed in a mature market such as betting, a radical new idea like interactive punting through a television needs to be a significant improvement on what has gone before. All the evidence so far suggests that it is not.