The value of DTT. Alex Buchan, DTG Spectrum Summit 5 th July 2017

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1 The value of DTT Alex Buchan, DTG Spectrum Summit 5 th July 2017

2 Contents My remit for today was to look at: The value of DTT today and how it can remain relevant in the age of Netflix 3 main points that address this: 1) DTT provides the foundation for flexible, tailored TV packages that don t require long duration contracts; 2) DTT will continue over the next decade to be the most costeffective way of bringing public interest programmes to mass audiences; 3) DTT will continue to drive innovation in content due to the scale and advertising revenues it offers.

3 1) DTT provides the foundation for flexible, tailored TV packages that don t require long duration contracts. OTT usage has been increasing rapidly: Sources: Netflix figures from CNN tech: Connected TV households from BARB:

4 Number of daily hours 1) DTT provides the foundation for flexible, tailored TV packages that don t require long duration contracts. DTT viewing hours have been slowly decreasing for some demographics: Average daily viewing hours of TV (UK) Children Adults Adults Adults Adults Adults 65+ Adults Adults Adults Adults Children Source:

5 1) DTT provides the foundation for flexible, tailored TV packages that don t require long duration contracts. However number of DTT households has remained strong (in fact has risen in recent years) Total population of TV households (UK) on a specific platform 100% 90% 80% 70% 60% 50% 40% DTT Cable Satellite 30% 20% 10% 0%

6 1) DTT provides the foundation for flexible, tailored TV packages that don t require long duration contracts. Consumers are turning to pay-lite models DTT is the foundation of this OTT supplements this to provide flexible, tailored package Source:

7 2) DTT will continue over the next decade to be the most costeffective way of bringing public interest programmes to mass audiences. Can t do with IP what you can with broadcast Netflix is not TV as we know it: DTT is a live, linear feed DTT does news/news flashes DTT delivers event driven content Sport will continue to drive users towards live TV DTT has continuity, regional and national resonance DTT is a cost-effective solution for reaching rural areas

8 2) DTT will continue over the next decade to be the most costeffective way of bringing public interest programmes to mass audiences. In future this could be replaced with IP? Broadband Delivery UK aim to provide superfast broadband (24Mbps) to 95% of the UK by Dec 2017 However, take up of superfast broadband is still low* and there is still a large discrepancy on download speeds depending on location and time of day Sources: BDUK: Ofcom UK Home Broadband Performance, page 1: data/assets/pdf_file/0015/100761/uk-home-broadband-performance,-november Technical-report.pdf * Superfast broadband take up is 31% in the UK according to the Ofcom connected nations report: data/assets/pdf_file/0035/95876/cn- Report-2016.pdf

9 3) DTT will continue to drive innovation in content due to the scale and advertising revenues it offers. Linear TV advertising represent a significant global revenue 38% of global ad revenue in 2016 was from linear TV In the US: 95% of TV ad revenue is from linear TV Source: Global ad revenue

10 3) DTT will continue to drive innovation in content due to the scale and advertising revenues it offers. Ad insertion presents new opportunities for revenue Already being deployed Sky UK use pre-downloaded adverts to serve to the viewer Hybrid technology enables this to be done dynamically CPM = cost per thousand impressions Cost of advertising campaigns, where advertisers pay each time an ad is displayed

11 3) DTT will continue to drive innovation in content due to the scale and advertising revenues it offers. DTT is driving content creation Major content makers are wed to DTT: BBC, CH4, ITV etc. Many shows that originated on DTT become available on OTT provider platforms as shows or box sets

12 Factors to consider in the future value of DTT <700 MHz and the UHF review at WRC-23: T2/HEVC switch over would mean a stronger case for continued DTT spectrum >2023 Innovation required in hybrid: Consolidation Seamless experience Both in switching between IP and broadcast e.g. IP URLs behind LCNs; and In continuity as a transition to increased IP usage is made. New technologies: ATSC 3.0, DVB WiB Future technology: Development of 4G embms 5G MBMS Faster broadband connections and cheaper CDNs: Ubiquitous super-fast broadband when?

13 Conclusions There is ongoing value in DTT: 1) DTT provides the foundation for flexible, tailored TV packages that don t require long duration contracts; 2) DTT will continue over the next decade to be the most cost-effective way of bringing public interest programmes to mass audiences; 3) DTT will continue to drive innovation in content due to the scale and advertising revenues it offers. The opportunities for innovation in broadcast are there. Industry must exploit these to ensure it continues to be an economic and commercial success, as it has been in the past.

14 Thank you Visit: Or

15 About the DTG The DTG has been central to the digital TV marketplace for over 20 years. The DTG is a self-funding membership organisation. Our DTG Testing arm is instrumental in developing robust testing and analysis and has supported work ranging from LTE rollout at 800 MHz to TV Whitespace for Ofcom. We support the work of our many professional members and DTG Testing ensures engineering best practice for policies.

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