PERSPECTIVE Part of the Ingenious Consulting Network

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PERSPECTIVEPart of the Ingenious Consulting
Network

• Tim Suter
• DTT and Programme Content
• 22 May 2008

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Agenda

• Progress towards Digital Switch-Over
• DTT services and audiences
• Future content and service issues
• HD TV
• Mix of pay and free

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UKs DSO Plan

• DSO phased over 4 years Region by Region
• Border Region will be the first 6th November
  2008 complete by June 2009
• London will be among the last to switch in 2012
• 6 Mulitplexes 3 public (2 x BBC, 1 x commercial
  PSBs) 3 commercial
• Requirement that coverage of the public muxes be
  the same as analogue terrestrial 98.5
• Commercial muxes to reach 90.0

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Multi-channel take up by platform 1998 - 2007
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TV Platform Share main sets, all sets
Platform shares in main sets
Platform shares in all sets
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DTT STBs and IDTV Sales
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2. Services available on DTT

• Public muxes
• Mux 1 BBC1,2,3/CBBC, BBC News 24, BBC data/text
• Mux 2 ITV1,2,3,4/CITV C4, E4, More4, C41
  Teletext Radio x2
• Mux B BBC4/CBeebies, BBC Parliament BBC
  interactive and text/data BBC Radio x10
• Commercial
• Mux A Five (PSB) Shopping x3 Top-up TV (pay
  entertainment and sport) text/data Radio x 2
• Mux C News x 2 Entertainment x 3 text/data
  Radio x4
• Mux D Music x 2 Entertainment x 3 Shopping x
  1 Radio x9

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Audience Profiles DTT vs Pay

• Channels common to both platforms have higher
  share in DTT homes driven in part by more
  limited choice of channels
• PSBs have highest comparative share
• Shared channels are also watched more in DTT
  homes than in satellite with the exception of
  Skys own channels
• Audience for all shared channels is significantly
  older on DTT platform
• It is also slightly more female and slightly more
  upmarket

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Early experience from the first switch-over
Homes ()
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3. Future Content Issues 1 HD

• Constraints in current system
• MPEG 2 across all muxes but MPEG 4 could double
  capacity
• DVB2 across all muxes but DVB 2 could increase
  capacity by 30
• No HD on DTT risks being stranded if / when HD
  becomes transmission standard of choice
• Opportunities provided by DSO
• Guarantee that 70 of cleared spectrum to be
  reserved for DTT
• Capacity of DTT system to increase, as a result
  of technical and transmission upgrade, by 20 -
  equivalent to one mux

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Ofcoms Proposals

• Clear one PSB mux to be converted to MPEG 4 and
  DVB 2
• Redistribute services onto other PSB muxes where
  possible
• Comparative selection process restricted to PSBs
• 3 HD sized blocks of spectrum now ready for use
  in 2009/early 2010
• 1 HD sized block awarded in 2010 ready for use
  in 2012, on completion of DSO

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3. Future Content Issues 2 Pay vs free

• DTT had a troubled start in the UK with
  On-Digitals mix of pay and free services
• Lack of access to premium content
• Sky removed from original consortium by regulator
• Poor consumer experience
• Aggressive commercial response from Sky
• Following the demise of On-Digital, the platform
  was rescued by a distinctive platform proposition
• Clear consumer proposition
• No contract, no dish plug and play STB
• Marketing and brand power of BBC behind it
• Reintroduction of pay services has been limited
• Top-up TV launched in 2004 limited range of
  entertainment channels
• Setanta launched sports service within the last
  year
• BT Vision using DTT to launch limited pay TV

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BSkyBs proposal

• Replace current 3 FTA Sky channels with 5 pay
  channels
• Sky Sports 1
• Sky Movies SD 1
• Sky One
• Plus 2 third party pay channels retailed by Sky
  1 x children's, 1 x factual
• Consumers would need to purchase new set-top box
  proposed service not compatible with existing
  pay-TV STBs

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Balance of arguments

• In favour
• Extends consumer choice premium sport and
  movies available on DTT
• DTT now a well established platform
• Introduces competition between pay providers on
  DTT

• Against
• May result in Sky becoming the single pay
  provider on DTT as well as on satellite
• Consumer confusion in needing more than one STB