DigiTAG

Web Letter

September 2006 | # 55

DigiTAG seeks to inform members and non-members about important developments in the digital terrestrial television market. Each month, DigiTAG distributes its web letter with news updates and further exploration of one topic.

To subscribe to the DigiTAG Web Letter, send an email to the DigiTAG Project Office.

Setback for DTT in the Czech Republic

A recent decision handed down by the Municipal Court in Prague has effectively revoked the six DTT licenses awarded to commercial broadcasters by the Czech Radio and Television Broadcasting Council (RRTV) last April. The decision follows from a complaint made by the leading commercial broadcaster TV Nova, a unit of Central European Media Enterprises (CME).

According to the Court's ruling, RRTV unlawfully changed its license criteria and did not provide sufficient explanations to the applicants during the tender process. The RRTV stated that its main criteria for granting licenses were diversity in programming, appeal to viewers, and the financial capabilities of each proposed project.

Using these criteria, the RRTV allocated licenses to TV Pohoda (children's service), Z1 (continuous news), Regionální televizní agentura (RTA - regional service), Óaka (music service), Febio TV and TV Barrandov (general interest). None of the projects submitted by TV Nova and TV Prima, the two commercial broadcasters presently transmitting on the analogue terrestrial platform, received any DTT licenses. According to the RRTV, their projects did not demonstrate sufficient diversity in their programming.

The six broadcasters allocated the DTT licenses were required, under the terms of their license, to launch their DTT services before April 2007. However, most broadcasters had announced that they would launch their services before the end of this year. With the recent court decision, the launch of commercial DTT services has now been delayed.

The DTT platform in the Czech Republic already consists of 4 television programme services offered by the public service broadcaster Czech Television (CT1, CT2, CT24 and CT4 Sports) as well as the simulcast of TV Nova's analogue channel. These services are available in the cities of Prague, Brno and Ostrava, reaching approximately 35% of the population. Other DTT services are available on a trial basis.

What next?

As a next step, the RRTV will need to decide whether it will appeal against the Court's decision. It is unlikely, however, to do so given that a second court ruled against the RRTV in a similar complaint filed by a broadcaster, Galaxie Sport, who also failed to receive a DTT license in the initial licensing round.

More probably, the RRTV will need to re-initiate the DTT licensing process. It will need to issue invitations to broadcasters to tender for the available licenses and ensure that it provides clear guidance throughout the selection process. The time necessary for the selection process will cause a delay in the launch of commercial DTT services which will not be able to begin much before the end of 2007.

The six broadcaster allocated the original six DTT licenses will also need to decide what steps to take next. Already, they have made significant investments in the roll-out of their DTT networks, in preparation for a DTT launch by the end of the year. The revocation of the DTT licenses signifies a considerable monetary loss and it can be expected that these broadcasters will seek financial compensation from the government.

Who wins?

Given that the launch of DTT services will make it possible for new broadcasters to enter the terrestrial television market, commercial broadcasters on the analogue platform will face increased competition. This increased competition will be most strongly felt in terms of advertisement revenue which will be spread between a greater number of broadcasters. With a delayed launch of DTT services, TV Nova and Prima TV will maintain their domination of the advertising market for at least the next year.

Already, TV Nova and Prima TV control over 80% of the television advertisement market. And with a new obligation on the public broadcaster Czech Television to halve the time it makes available for advertisements, commercial broadcasters will increase their advertising revenue. It is estimated that the advertisement spending will reach Kc 8.75 billion (€307 million) in 2006.

But a delayed launch of DTT services could have a negative impact on the terrestrial platform in general. Viewers may no longer be satisfied with the limited number of channels available and instead seek new and enhanced services available on other television platforms, such as cable and satellite.

Already, Telefonica O2 has launched its commercial IPTV service, O2TV, while two digital satellite platforms are on the air and another is expected to launch soon. These platforms may pull viewers away from the terrestrial platform, especially as it is unclear when the service offering on the terrestrial platform will improve.

Analogue switch-off

In August, the Czech Communications Authority (CTU) unveiled its roadmap for digital switchover and set 10 October 2010 as the date for total analogue switch-off. However, given the current delay in launching the commercial DTT platform, it can be expected that analogue switch-off will now be delayed.

Already at the time of the announcement, TV Nova and Prima TV, felt the analogue switch-off date to be premature. They also expressed their doubts whether the amount of advertisement revenue available would be sufficient to sustain a free-to-air DTT platform. However, for the new broadcasters allocated licenses for the DTT platform, analogue switch-off would allow for a level playing field between all broadcasters.

The resistance shown by traditional commercial broadcasters to the introduction of DTT services highlights the need to ensure their support before such a launch takes place. However, such support will be difficult to achieve if DTT simply dilutes the audience and reduces the likelihood of adequate financial returns.

Moving forward, it will be important for all broadcast partners to agree on such issues as the DTT strategy and business model before DTT services can be successfully launched.

Source: Natalie Mouyal, DigiTAG Project Office

About DigiTAG

DigiTAG aims to encourage and facilitate the implementation and introduction of digital terrestrial television services using the Digital Video Broadcasting Project's Standard (DVB-T). It has some 60 members from broadcasting, network operators, regulatory, and manufacturing organisations throughout Europe and beyond.

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DTT NEWS ROUND-UP

For all articles, please go to DigiTAG News

United Kingdom - DTT platform to overtake satellite by end of year

Latest figures from market research group GfK suggest that 1.1 million DTT receivers were sold in the second quarter of 2006. This means that 7.8 million households (31% of total homes) rely on the DTT platform for their primary source of television.

In comparison, satellite operator Sky reported in July that by the end of June it had 7,749,000 subscribers. With the inclusion of the 645,000 free-to-view digital satellite homes, the total number of satellite households is approximately 8.4 million.

Already, Ofcom reported in June that the DTT platform had overtaken analogue television on primary sets in the home. It can be expected that the DTT platform will overtake the satellite platform by the end of the year.

Source: DTG website

Australia - Two DTT multiplexes to be available in 2007

The government has announce that it will auction two DTT multiplexes early next year. The new services will likely be available in 2008.

The first of the two multiplexes, channel A, is reserved for standard-definition DTT services while the second multiplex, channel B, will be available for new services such as DVB-H. While it will not be possible for license holders to provide pay-TV services, operators can leverage fees for mobile TV services.

The licenses will be available for a 10-year period. Following the allocation of the license, the license holder is required to begin broadcasting services within 18 months.

Source: advanced-television.com

the Netherlands - Two-week delay for ASO date

The Dutch government has again changed the date when all analogue television transmitters will be switched off.

Originally scheduled for the end of October, the date was postponed to 26-27 November. It has now been delayed until 11 December. The government has not given any reason for the two-week delay.

Source: Radio Netherlands Worldwide

Italy - Strong interest in PPV services

Commercial broadcaster Mediaset has reported strong interest in its pay-per-view service on the DTT platform.

In the first half of 2006, Mediaset sold approximately 511,000 new rechargeable pre-paid cards and approximately 1,400,000 recharges.

Source: advanced-television.com

Vietnam - Commercial DVB-H trial to launch by end of year

Nokia and national broadcaster Vietnam Multimedia Corporation (VTC) have annouced a joint plan to launch commercial DVB-H services by the end of 2006. The services will be launched in Hanoi and Ho Chi Minh City.

Viewers will be able to access seven television programme services as well as a video-on-demand service from a catalogue of titles proposed by VTC.

The service will be available on Nokia's N92 multimedia device.

Source: Nokia press release

Russia - DVB-H services to launch in Sverdlovsk

A commercial DVB-H service will launch in the region of Sverdlovsk in April 2007. This service will provide viewers with access to 15 television programme services, including pay and free-to-air services.

In addition, a commercial trial of the services will be available as of November 2006 in the city of Ekaterinburg. During the trial, 100 DVB-H mobile phones, 50 DVB-H USB receivers for laptop computers, 50 DVB-H SDIO receivers for PDAs and 100 portable media players will be available.

SIDSA will provide the DVB-H platform, the headend equipment and the Conditional Access System.

Source: SIDSA website