TNO Strategy, Technology and Policy

Digital TV switchover policies in Europe

Cross country analysis of market structure,

DTV penetration and switchover policy

Martijn Poel

With Simon Delaere (VUB-SMIT)

& Andra Leurdijk (TNO)

poel@stb.tno.nl

2

Outline

• Switchover policies: an integrated approach

• Research framework and methodological issues

• Market structure and innovation

• Switchover policies in five EU countries

• Preliminary conclusions and research issues

3

Switchover policies: an integrated approach

Competition in DTV services, platforms and infrastructures

Innovation in DTV services, platforms and infrastructures

Industrial policy (media, equipment, infrastructures)

Access and diversity (media, social, cultural policy)

4

Research framework…

Innovation - Digital TV via broadcasting

infrastructures (eg set top box)

- Online audio-visual services

- Availability and penetrationNational policy - Switchover policy

- Media policy

- Innovation and industrial policy- Regulation / competition policy

Market structure - Competition in infrastructures,

platforms and content/services

- Vertical integration

- Entry barriers

European / international policies National contextual factors

National market dynamics, strategies, business models (behaviour/conduct)

International market developments, technology, production

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…and methodological issues• Market structure

• Dynamic, platforms, services/content, relevant markets: service ("free", basic pay TV, premium pay TV) and geographic (eg availability)

• Focus on infrastructure and platform competition

• Innovation indicators• Availability, penetration, services innovation (eg interactive, internet)

• Focus on digital TV penetration

• Policies• "More" policy, timing and impact, interference

• Structured case studies (qualitative)

• Linking market structure, policy and innovation• Case studies, inspired by basic statistics (background)

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Market structure and innovation (1)

0%

10%

20%

30%

40%

50%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Market share main infrastructure

DT

V p

en

etr

ati

on Terrestrial

countries

FR, IT, SP, GR

Cable

countries

B, LUX, NL

TNO based on data EC / Strategy Analytics (2003)

7

Market structure and innovation (2)

0%

2%

4%

6%

8%

10%

12%

0% 20% 40% 60% 80% 100%

Terrestrial and

cable countries

Market share main infrastructure Gro

wth

DTV

pen

etr

ati

on

/ T

V H

H

(20

02

/20

03

)

TNO based on data EC / Strategy Analytics (2003)

8

Market structure and innovation (3)

0%

10%

20%

30%

40%

50%

60%

0% 20% 40% 60% 80% 100% 120%

Market share main DTV platform (mainly sat)

DT

V p

en

etr

ati

on

TNO based on data EC / Strategy Analytics (2003)

FR

LUXBNL GR

UK

ITD

IRL

PO

FI

SW

DK

SP

A

EU

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Switchover policies in five EU countries

• Selection based on diversity

• Similarities, linked to EU policy:

• Switch-off date to be decided

• General frameworks on copyright, DRM, digital reproduction

• Implementation of EU-package on electronic communications

• Market analysis in progress

• Focus and main differences (next slide)

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Switchover Media Innovation / industrial

Competition / regulation

UK Digital TV Project / Action Plan (2001), free-to-view satellite package?

BBC is one of the drivers (content and Freeview), spectrum pricing?

DTV/content is a topic in ICT (and horizontal) innovation policies

CAS, EPG, BskyB, OFCOM, Driving digital switchover (2004)

France France Television in pilots, obligation to use digital terrestrial

RIAM programme on innovation in AV/media, 29 m (2001-2003)

Wallonia RTBF in pilots, additional resources DTT?

Flanders VRT is one of the drivers: e-VRT,60 m (2001-2006)

Flanders Interactive (2003-2004) and e-VRT/ @Media, link to IBBT (2004)

Netherlands Media related policy on terrestrial network platform operator

DTV/content is a minor topic in ICT innovation policies

Rebalancing of cable tariffs?

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Preliminary conclusions and research issues (1)

• Competition between infrastructures appears to be more

relevant than competition between digital TV platforms

• Existing infrastructures compete to become leading in digital TV,

eg competitive satellite UK vs dominant cable in NL

• Competition and collaboration between digital TV platforms?

• Importance of national market dynamics, incentives of

established operators and broadcasters, eg access to content

(BskyB) and access to DSL platforms (FT)

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Preliminary conclusions and research issues (2)

• Digital TV / content innovation policies: differences in

approach and policy instruments, eg Flanders - NL - UK

• Public broadcasting policy/strategy to stimulate digital

switchover, but there are exceptions and budget cuts

• Terrestrial countries are not leading in digital terrestrial

• Delay of switchover roadmaps: trade-off between policy

objectives, between short and long term costs and benefits?