The BBC has launched a 24-hour news channel for the UK, going head-to-head with Sky News, a subsidiary of the media tycoon Rupert Murdoch's British Sky Broadcasting.

News 24 has the disadvantage of only being available initially in two million homes with cable, or during the night on the terrestrial channel BBC1. Sky News, broadcasting via satellite, is available in around six million households.

News 24 went on-air at 5.30 on Sunday evening, London time, with a half-hour preview of the channel followed by a news bulletin at six o'clock. The launch is part of a wider strategy, preparing the 75-year-old corporation for an era of digital television.

The programme will closely cooperate with BBC News' Internet service, BBC News online, which was launched last Tuesday. Viewers will be able to participate directly, registering their views and comments directly at the BBC News website.

The BBC has responded to critics arguing that Britain does not need another 24-hour news channel and that the money the BBC earns from the licence every television owner must buy could be better spent.

"BBC News 24 will give licence fee payers a public service choice for a multi-channel age," said BBC News chief, Tony Hall.

Former BBC correspondent Gavin Esler: One of the 'faces' of News 24

The BBC already has one 24-hour-news channel in BBC World, which is aimed at an international audience. However, it cannot be broadcast in Britain because it is financed by advertisements.

News 24 will take advantage of the BBC's 13 regional newsrooms across the UK and its foreign bureaux.

One of its presenters, Gavin Esler, said: "No-one has got a system of regional centres in Britain like ours, plus we've got the biggest network of international bureaux of any broadcaster."

Digital channel explosion

Meanwhile, Mr Murdoch has digital plans of his own. On Thursday BSkyB announced that it would launch digital services together with Cable and Wireless in the spring. But he is not alone.

Within a year UK consumers will have a choice of several hundred digital channels - at a price. All the companies providing channels make money through subscription and advertising revenues, but the digital revolution is set to change some of the trends.

Simon Rees believes the big fish will benefit

Simon Rees, Broadcast Director of TMD Carat - which buys advertising time on television - says that, in the digital world, large companies will benefit.

He believes that terrestrial television channels like Britain's ITV and Channel 4 "will continue to dominate the scene from an advertising revenue perspective. ... The smaller channels will be feeding off what they can get amongst themselves. There will be about 50 to 100 new channels next year so it's very competitive in a small arena."

Already, broadcasters are having difficulties gaining a large enough slice of the advertising pie. British cable channels Live TV and Channel One both expect to lose millions this year.

Experts have compared the dash into digital television to a gold rush - for every success there are likely to be many failures.

However, the Editor of Multichannel News, Bill Mahoney, can see why companies are attracted to the digital gamble: "The cost of launching a service is inexpensive," he said. "And for the ones that succeed it circumvents all of the losses you've made and earns you a lot of money as a result."

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Head of BBC News Tony Hall explains the aims of News 24

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