Digitisation 2010 Broadcasting gearing up for the internet the changing face of structures and actors
Digitisation 2010 Broadcasting gearing up for the internet the changing face of structures and actors published by Kommission für Zulassung und Aufsicht (ZAK) der Landesmedienanstalten Commission on Licensing and Supervision (ZAK) of the German media authorities
Preface 5 Thomas Langheinrich Chairman of the Commission on Licensing and Supervision (ZAK) of the German media authorities Dr. Hans Hege ZAK Representative for platform regulation and digital access The sixth digitisation report of the media authorities provides evidence of the positive development digitisation is taking in Germany. Since 2005, the number of digital TV households has trebled and now stands at 23 million, allowing digital access to the media in 61 per cent of all homes. Even cable which has been the problem child of distribution platforms during this period is now beginning to speed up digitisation, and DSL-TV is also gaining ground, even if penetration is still at a low level. HDTV is a definite driver for digitisation: the rising number of offers is good reason for users to switch to digital reception, especially since they can now see the benefits with their own eyes. The new flat screens with integrated receivers also pave the way for digitisation as services and features can now be easily accessed with a single remote control, making TV consumption child s play for even the technically most ignorant viewers. In addition, new promising developments will soon make internet applications visible on the TV screen in a user-friendly way thanks to the new HbbTV standard. Consumers can therefore now more and more appreciate the added value digitisation has to offer, which thus loses the blemish of only providing countless new offers. And convincing arguments for digitisation are needed as more than 14 million German households are still firmly locked in the analogue world. In this respect it was an important step that ARD, RTL Deutschland group, ProSiebenSat.1 and ZDF agreed on the switch-off of analogue satellite transmission in Germany together with the commercial broadcasters association, VPRT, on the initiative of the media authorities. Over the next few months, the klardigital 2012 initiative will inform the satellite households affected and will provide advice to the specialist trade, craftsmen, the housing industry and cable network operators, thus accompanying switchover. This impulse could lend momentum to the digitisation of cable. The data collected by TNS Infratest during the period May June also point to developments presenting new challenges for users, distributers, platforms, the receiver industry and, not least, content providers. The market has undoubtedly become more dynamic, competition has grown considerably and open and closed systems vie for market shares, click rates and paying customers. Behind the scenes, sustainable business models for the time after the heyday of traditional TV advertising, necessitating new addressable services to compensate any loss in revenue, have been looked at for a long time. The direct connection to the customer will become absolutely essential; for this reason, platforms, network operators and the receiver industry are currently all defining their respective claims. As a consequence, technical progress regarding digitisation is increasingly slowed down since the new options and technical choices are not necessarily welcomed by all players. The digitisation report shows up all these developments; it provides not just the relevant facts and figures but also offers expert analyses and opinions, raises the right issues and points to potential developments in the digital world.
Content 7 Content Broadcasting gearing up for the internet the changing face of structures and actors... 3 Platforms 2.0: Broadcasting platform meets internet platform................................. 13 Dr. Hans Hege Traditional broadcasting platforms: can they get away from the transport model?... 14 Internet platforms... 16 Open worlds closed worlds... 18 Effects on the broadcasting world... 20 Infrastructure providers and platforms... 21 Challenges for regulation... 22 Securing basic access to television and the internet... 22 Specific rules for broadcasting platforms... 23 Selection through internet platforms... 24 Provisions concerning vertical integration... 24 Data protection and copyright the key funding issue... 25 Uniform regulation is the protection of minors an appropriate example?... 25 Digitisation of the German television market: Facts and figures Current state of digitisation in German TV households, June 2010.............................. 28 Andreas Hamann Continuous increase in digital households... 28 Slight shift in the shares of transmission routes... 28 Upwards trend of digital continues... 29 Satellite to switch over in 2012... 30 Cable continually on the road to digital... 32 Rate of digitisation on the up with the number of sets... 33 Terrestrial reception stable... 34 TV reception on the PC and the laptop on the up............................................... 34 Watching TV online: reach and acceptance of web TV...36 Johannes Kors Types of offer and developments... 36 IP-TV............................................................................ 36 Web-TV... 36 Audience reach and acceptance of IP-TV and web TV............................................ 38 Hybrid-TV... 42
8 Content Digitisation in Europe on the move................................................... 44 Mario Hubert Methodology.................................................................. 48 Defining cable and satellite reception......................................................... 48 Establishing transmission platforms and transmission technologies... 48 Regulating platforms and securing digital access: the remit of the regulatory authorities................. 51 Regulating platforms... 51 Digital access... 52 Analogue-digital switchover... 52 Tools of regulation and convergence of the media... 52 The authors..................................................................... 53 Glossary...54 Imprint........................................................................ 58
11 Broadcasting gearing up for the internet the changing face of structures and actors
13 Platforms 2.0: Broadcasting platform meets internet platform Dr. Hans Hege Two terms or concepts currently dominate the debate: platforms and net neutrality. Apple, Google and Facebook make good ground as regards media consumption. The extension of broadband provides the basis for distributing audiovisual media in the internet while offering new options of collecting and utilizing user data. According to estimates by experts, the available capacities will increase ten-fold by 2014; by then, 90 per cent of the capacities will be used up by video consumption in the internet. This raises a lot of questions: Who will pay for this? Who will gain control of the particularly attractive content which will continue to be in scarce supply in the future? Who will control the receivers? Who will obtain data on user behaviour which form the basis for financing and expanding services? Will the internet be preserved in what represents its open character so far the enigmatic catchword being net neutrality, i.e. the possibility of the direct and uncontrolled connection between content providers and their users, but also among users exchanging videos and music? The term net neutrality comprises many issues, and the solutions to them are almost always linked to platforms which operate networks, control receivers, aggregate content, assist with navigation and collect data for funding activities. Will the network operators put particular efforts into promoting those uses of the internet which earn them the lion share of their income, and thus cause constraints for others? Do broadband infrastructure operators have to be permitted something which was granted to broadcasting platforms by the legislator a long time ago: the decision on the use of the capacity they have built up including the selection of media content, but exclusive of minimum obligations for the benefit of publicservice channels and regional services? Asked in reverse: Can trade privileges of network operators be put into question, e.g. that users cannot choose the cable network operator providing the majority of TV services they want to watch but have to accept the provider selected by the landlord, or that users have no influence on what channels they receive which is basically the opposite of what would ideally constitute and is demanded as net neutrality? This article aims at outlining and comparing developments of traditional platforms in the world of broadcasting and the new platform world in the internet. Answers found to questions in this context will be outnumbered by questions remaining unanswered. The article would like to contribute to the contexts being better understood, thus providing a first basis for solving the question which public interests command which form of regulation. Net neutrality in doubt due to new platform developments
14 Broadcasting gearing up for the internet The early days of broadcasting live on Broadcasting platforms dominate the formation of opinion HD to get away from the transport model? Traditional broadcasting platforms: can they get away from the transport model? Broadcasting platforms serve for transporting and where possible marketing television in closed networks. The operators decide on the content to be distributed; in so doing, they have to pay regard to some minimum provisions. Even in digital networks, capacities are limited. Unlike in the analogue world, however, this no longer results in scarcity of capacities as the key criterion is financing attractive content. Network operators need attractive content in the same way in which television providers need audience reach for funding their services. The four major television groups in Germany cover more than 90 per cent of consumption a very straightforward situation compared to broadband internet. Platforms on broadcasting networks can also be operated without the network. The most important example in this respect is built on exclusive content: sport and films offered by Sky Deutschland. But economic constraints would make cooperations with the network operators stand to reason. Taking the time spent consuming media and the impact on the formation of public opinion as criteria, broadcasting platforms still have a considerable head start over internet platforms (which are after all used to a small extent only for accessing audiovisual media and in which the new forms of communication do not reach the influence of television). The influence of broadcasting platforms continues to be limited by the persisting dominance of the transport model under which a large range of services is available free-to-air at a standard rate. The cable network which underpins this transport model was constructed and financed as a public monopoly during the 1980s and was boosted not only by subsidies from other areas, but also by the fact that the cable fee is charged together with the rent. Satellite copied the cable transport model and also reaches a large audience; marketing does not, however, take place. Satellite could attain its large audience share because, unlike in almost all other countries, no payment is charged for programme reception. In Germany, households invest in a satellite receiver, but do not have to pay any monthly fees in return. This corresponds to the old and, following switchover, also the new model of terrestrial television transmission. The cable operators generate the biggest share of their income from the households connected to their networks, but still manage to remain competitive as the cost remains far below that incurred in other countries since the cable fee is charged with the rent and a large number of households is connected to cable networks. There has been little change in the shares of the various broadcasting transmission platforms. Terrestrial transmission could reverse its downward trend thanks to the switchover to digital transmission, but still lags far behind cable and satellite reception. The large audience reach achieved through this transport model offered some consolation to content providers which unlike in Anglo-Saxon countries do not receive any income from cable and satellite platform providers but rather have to pay for their content being distributed via cable and satellite. Neither terrestrial nor satellite used the opportunity offered in the context of the transition to digital technology to introduce a new funding model. Subsequent attempts to establish a marketing platform by introducing basic encryption for commercial free-tv services transmitted in SD quality failed for satellite transmission and are no longer pursued. HD Plus offers a new chance for introducing a new business model with the new high-definition technology; however, consumers will not have to pay extra to start with. It remains to be seen whether this approach will work. The same applies to the development of cable distribution. The question is whether the model of basic encryption can work
15 for cable transmission even though it failed in all other broadcasting platforms. Or will a change of the system also be delayed until HD is introduced for cable transmission? The facts and figures of the digitisation report show that a lot of ground still has to be covered before analogue transmission is given up, one reason being basic encryption. In the course of digitisation, network structures are devised in a more centralised fashion than was the case for analogue cable; this causes problems for regional and local content providers. Their interests are in the focus of media legislation on access control; it must step in where telecommunications regulation and marketing fail. The chances of small providers lacking the negotiating clout of the major broadcasting groups deserve particular consideration. Due to their key function regarding access of content providers, broadcasting platforms are also carefully looked at by the Federal Cartel Office which also pays great attention to the commercial broadcasting groups which are considering a departure from the pure transport model in order to open up new sources of income. The German legal provisions for open interfaces which are based on European law have been complemented by requirements of the cartel authorities aiming in particular at ensuring access for other providers in new marketing models by means of open interfaces such as obligatory CI Plus. Broadcasting platforms have to get by without some key options available to internet platforms for exerting influence: There is no consumer relationship with satel- lite and DTT audiences, let alone any information on individual TV consumption. As a result of the various network levels, the relationships in the cable networks are spread across many companies. The existing return channel does not provide any opportunity for communication which could match that offered by the internet. Electronic programme guides and navigation systems are still in their fledgling stages both regarding receiver hardware and data used. Digital storage facilities have been improved considerably in the latest receiver models and prices will go down even further. This poses a threat for the income of commercial broadcasting which responds by attempting to thwart recording and skipping advertising systems. The connection of internet and broadband for media usage is also still in its infancy even regarding cable which would offer both technical options as a route of transmission. The cable providers have started offering time-shift television ( catch-up TV ) and video-on-demand for TV screens only as a reaction to the growing competition of IP-TV. The traditional broadcasting platform model is also shaping the IP-TV platform set up by Deutsche Telekom. Telekom banks on a comparable offer in a closed network, offering similar quality and seeks to stand out with addition options as the internet does. In contrast to the broadcasting platforms, IP- TV consumption generates data on individual use; how they are collected and used, cannot be assessed at present. Similar to all other network-based telephony providers, Deutsche Telekom also tries to get as large a piece of the TV and video consumption cake as possible to compensate the downturn trend of the classical revenues generated in the areas of telephony and data transmission. Triple play packages comprising television, internet and telephony will be extended by mobile uses in the future; this field is hotly contested by both cable and telephony providers. The future will show whether the large cost incurred for upgrading networks will pay for funding several networks and will thus bring about a range of providers to chose from, including the question whether users will in future still need and have to pay for two networks at home which come from totally different worlds but will soon offer identical functions. Safeguarding opportunities for regional and local providers Broadcasting platforms under pressure IP-TV initially adopts the broadcasting model
16 Broadcasting gearing up for the internet Regulation based on platform neutrality Terrestrial platforms without content marketing? For the network operators coming from the telephony sector, the greatest challenge will be the fact that especially in Germany, consumers pay very little for the most data-consuming service, i.e. television while telephony will disappear as a stand-alone service because of the low data rates required even though it provided the main income for many years in the past. The Interstate Broadcasting Treaty introduced platform-neutral regulation; nevertheless, many issues still await a solution. They relate to questions that largely go beyond the key area of media regulation. As regards IP-TV, proprietary technologies are introduced while for cable and satellite, open technologies are called for. Vice-versa, however, IP- TV as a closed world has to cope with the pressure of the open internet which can be accessed via any broadband modem; the broadcasting world has not yet arrived in a world that is open to a similar degree. Attempts at setting up platforms for mobile consumption distributing TV services to complement platforms for stationary reception have thus far been a limited success at best. The iphone has popularised video use via the internet. The relevance of streamed TV channels still lags far behind streaming radio. For using broadcasting technologies such as DVB-H and DAB for streaming content, the question how to fund the necessary transmitter networks forms a key challenge which is as yet unsolved. It is obvious that it is particularly difficult to develop platforms and networks for content for which no new business models for funding exist but which exclusively have to resort to advertising and licence fee revenue, such as digital radio. What keeps being overlooked again and again is that the success of analogue-digital switchover of terrestrial television was also due to the fact that in the case of DTT, attractive content was available which was funded through cable and satellite distribution. There is no comparable added value for digital radio, nor for introducing a more efficient encoding standard for DTT. As regards the development of terrestrial transmission, a further weakness results from the separation of the broadcasting network operation from internet-based networks. One could compare this to a newspaper or a television provider today banking only on the printed version or the classical broadcasting service. A responsible approach to public infrastructures would have to grab all opportunities offered by convergence rather than destroy them. The fact that the development was left completely to the market and the short-term interests of Deutsche Telekom is now backfiring. Will there be a future for a terrestrial broadcasting platform alongside the mobile radio platforms which will focus their efforts even more on the distribution of video and audio content in the next generation and managed to acquire spectrum at a very low price during the latest frequency auctioning process? Public-service broadcasting will have to find an answer to the question whether it can and will afford to spend considerable amounts of licence-fee money on HD transmission for a small number of viewers. As was the case for terrestrial analogue-digital switchover, the commercial providers will again have a key role since a system offering public-service broadcasting only will multiply the costs per household for public-service broadcasting as well. The commercial providers would like to give up the transport model, but is it not precisely this model which ensures the attraction of DTT? As long as the development of the digital satellite is undecided, there is going to be little progress as regards HD even if the technology will be available shortly. Internet platforms HD technology is based on broadband internet which brought about a large number of innovations: It combines traditional telecommunications services with the possibility of using audiovisual media; the social networking sites generate new forms of communication. The relevance for media consumption is increasing through a three-fold
17 expansion: the share of households reached via broadband, the increasing bandwidths, and the receivers allowing broadband use. The classical desktop PCs and notebooks now have to give up room to netbooks and tablet PCs; with the iphone and the ipad, Apple has established a new yardstick as regards comfortable and mobile broadband use. For television consumption, this continues to present a complement rather than a substitute: the largest amount of time is spent watching TV on the large screen at home, and the periods during which consumers want to relax. Unlike with printed media, the internet has not made any noticeable inroad into TV consumption so far. First attempts at bringing the internet onto the large television screen met with little acceptance. Hybrid receivers including an internet connection alongside TV reception are now to offer solutions which are more user-friendly: simple navigation centering on the time-shift use of media libraries, video-ondemand and the use of selected video content on offer in the internet. The entertainment industry is making its mark with a number of solutions offering content available in the internet, mostly in closed systems presenting a selection made by the provider. This can present a problem, but at the current stage of development, competition for the optimum solution should not be obstructed. With the open internet being available via different receivers, sufficient pressure will develop for the systems to be opened up. Led by the TV providers, the internet is to be brought onto the TV screen with an open standard (HbbTV) while the independence of the content providers as regards devising their services is retained. After useless attempts over several decades, this could bring about a better version of the oldest data transmission route, namely teletext onto the TV set. Experiences gathered with the multimedia home platform standard as well as the on-going debate about interactive television are proof of the fact how difficult it is to develop truly attractive uses. The distribution of selected classical TV services in the open internet by Zattoo thus far remains a niche system. It allows television to be watched on the laptop even in areas where DTT is not available. The platform does not require any special regulation, especially since most providers offer their services themselves as streamed content. Internet platforms show their best performance by building on the strengths which makes broadband internet superior to traditional forms of communication as a basic infrastructure for communication and media consumption. Universal broadband access allows the consumption of content and other uses at any time in any place. This is combined with the option of interaction not only between providers and users, but also among users (e.g. file sharing which is not without problems for media businesses). Moving about in the internet leaves traces which can be combined to establish profiles for advertising strategies or for search engines. Television and video content can be embedded in social networking sites as well as in many other uses of the internet. The strengths of the internet can be demonstrated by a look at the three major platforms: Apple (itunes) started with a receiver-specific platform for marketing music. Today, Apple is a platform for editorial content based on print products as well as for TV content and varied applications using the options of mobile communication. Apple brings TV and video content onto the television screen but has not made any inroad yet as far as current TV services are concerned. Apple does not hold a unique position as the sole content provider in any area: music and videos can be found on other platforms as well while apps can also be developed for different sets. Apple (itunes) is a challenge for platforms which are operated by individual media companies. Does it really pay to provide platforms focussing on Broadband internet generating new platforms In search of user-friendly solutions: internet on the TV screen Apple (itunes) successful content marketing
18 Broadcasting gearing up for the internet Facebook banks on the network effect Google forces internet navigation into television traditional broadcasting platforms: walled gardens by nature specific content such as video and film, music or editorial content produced by publishing houses? What benefits can mergers of media companies bring, and which aspects deserve analysis as far as competition issues are concerned? Who controls the customer data and what share of the revenues will the platform receive? For Google, TV consumption is a natural area for expansion. Alongside the YouTube video platform and video search, navigating on the TV set is another possibility of gathering data which can then be commercially exploited. Google TV has already been announced. Will it grow into a competitor for today s EPGs and audience flow of the TV providers? Will Google manage to do away with the current control of the TV screen exerted by the content providers? Will the content providers be able to prevent material from the services they deliver to be embedded in a Google screen? And there are other companies looking to navigation as a business model, for instance watchmi by Springer. Rather than channel-surfing, the service will make individual suggestions which are based on the data gathered during earlier consumption; the system can be connected to storage facilities. Reducing the complexity of the vast range of offers is a typical service media can provide, but it comes up against the same challenge as does the way in which Google handles other journalistic work: Can and may a business model be built on a strategy of using content and infrastructures provided by others, gathering data from them which are used for financing, with the resulting negative consequences for the income earned by others and their incentives for investment? Do the TV providers still have a chance to control the EPG as indicated in the joint papers published by the VPRT and public-service broadcasting? Why should you have to search through individual media libraries if there is a comprehensive service which is based on individual demand? Facebook is the latest player planning to use its network for earning money by exploiting data on media consumption. Recommendations have always been a motive for watching TV; social networking sites will supply recommendations in a professional manner. Facebook banks on the network effect: For more and more users it is turning into their internet platform no. 1. Media companies use Facebook for marketing their products, but it appears obvious that Facebook might want to generate advertising income through media consumption. These three big players pursue different approaches: Apple builds on hardware including proprietary technology while Google supports open standards. To date, only Apple has developed a platform which successfully markets content while the other two go for collecting data which can be monetised through targeted advertising. All action is global; this is a fundamental difference compared to broadcasting platforms. The basis for the global approach is the open internet; the players do not operate their own infrastructures or participate in infrastructures. That this does not have to remain unchanged is evident from considerations by Google to participate in the frequency auctions in the US. On the other hand, the platforms benefit from the open internet and advocate net neutrality in their own interest. Open worlds closed worlds Traditional broadcasting platforms are structured in the form of walled gardens; at the gate, the platform operator controls which content will be transmitted, the decisive issue being distribution rather than communication. Content is mainly professional content and predominantly television material. There is no direct relationship between the provider and the user unless the platform operator agrees. Both the content provider and the content user are thus dependent on the platform: the user because he or she wants to consume content from his or her main media, television, and the provider
19 since only the combination of various transmission platforms will provide the audience reach required to ensure funding of the content. Growth of the broadcasting platforms has already peaked: Literally 100 per cent of the population in Germany are supplied with television; financing new content is difficult if it is based on the traditional funding approach of advertising and fees. Operators bank on the potential growth in the internet which is now offered as a second source of income. Access to closed platforms is only possible if the provider and the operator have taken out an according agreement which covers more than just the technical distribution; the operator in addition markets content and therefore has an understandable self-interest in content to match. Access to the internet requires specific technical arrangements which cause additional expense, especially for regional services, since audiences will only be reached if reception of content is made possible with the receivers specified by the platform operator. In the analogue world, the television set would bring the entire range of services available into the sitting room as a matter of course; this no longer applies as the digital world is made up of a large number of technologies. The provisions of European legislation based on DVB ensure common basics, but reception is by no means secure in as far-reaching a way as is the case for broadband internet. The dynamics of the internet in particular build on offering an unlimited field for experiment including open access for companies planning to develop and offer new products. The internet standards warrant that routes are freely accessible, allowing the entirety of what the internet has to offer to be accessed via any broadband connection, with some restrictions to contend for as far as mobile radio is concerned. The open structure has proved its superiority over attempts at planning by network operators, but also on the part of regulators. Beyond the manageable world of television content which offers little opportunity to providers to distinguish themselves from one another, attempts at setting up walled gardens in the internet have met with little success. The Interstate Broadcasting Treaty pays credit to the specificities of platforms in open networks; special requirements can only be imposed if a platform dominates the market. Platforms in the internet do not offer any protection against the competition: TV series can thus be accessed via Apple, Hulu or specialist platforms. Scarcity and quality, however, can also become a problem for open networks if they are used for videos and television distribution to an even greater degree. The walled gardens of IP-TV are a guarantee for quality at corresponding expense for consumers. Open networks existing alongside can secure access as long as there is no deliberate discrimination against providers. Closed networks can be more comfortable, as a comparison of the error rates of set-top boxes and PCs shows. In return, they offer as an advantage that new applications can be installed more easily and users do not become dependent on the provider of the hardware or the network. Currently there is a balance between open and closed networks; this is based on the fact that no operator dominates this market. If, for instance, access to the internet were possible only via Deutsche Telekom, the open distribution of video content alongside IP-TV would be seriously at risk. For the future design of transport management built on net neutrality, a key requirement must be open networks as a reference. If that is ensured, closed worlds could be acceptable in which Apple could promote new solutions including opennetwork approaches. Internet standards ensure the internet remaining open Balance between open and closed networks so far
20 Broadcasting gearing up for the internet Imbalance in the dual broadcasting system Key issue: securing content being funded Effects on the broadcasting world The major internet platforms compete against each other by offering their own content; unlike for cable or satellite platforms, no process of vertical integration has as yet set in. Television is holding its ground and its influence as a mass media; consumption times have also been stable so far although the younger audiences can be expected to watch less TV, being attracted by countless new forms of entertainment including games available through the internet. Top sports events, casting shows, news and current affairs programmes including talk shows will continue to be the preserve of the major TV channels. Series and films, on the other hand, can be marketed through the various platforms in the internet. Thematic channels which repeat the same type of content at frequent intervals can be replaced more and more by the internet if it has made the leap onto the TV screen and simple navigation allows for consumption of the targeted content at any time a consumer chooses. This does not, however, answer the key question how content can be reliably financed in the future especially as regards content which demands considerable expense such as individual research for news. The strategy of using the data collected for targeted advertising turns the internet platforms into competitors of the television providers and the media industry in general. Television advertising is going to remain the form of advertising which secures the highest audience reach and will therefore remain indispensable for many advertising campaigns. For covering the total financial needs, however, that will not be enough. Internet platforms only contribute to financing media where content is marketed against pay; this is the model practised by Apple. Hopes are built on this strategy, especially concerning the future funding of internet content which is still available free of charge. Vice-versa, publishing houses, but also some infrastructure operators, are going for a greater share of the value cake by setting up their own platforms. For the German television system, the development of the internet could aggravate the imbalance which already marks the dual broadcasting system: Public-service broadcasting already commands the largest licence-fee income anywhere in the world and is not dependent on advertising revenues. The public-value test only applies to content offered additionally in the internet. The existing system which took 60 years to develop requires a thorough review by the German legislator who should redefine the remit of public-service broadcasting. However, the close interconnection which results from media politics being actively involved in the supervisory councils of public-service broadcasters does not exactly further such an approach. The current supervisory structure offers little incentive to counter the tendencies of providing content that is similar to that of the commercial side and to promote innovative content. In Germany, the chance of funding television content with the help of fees is smaller than in any other comparable TV market. Only a small number of the households which receive digital TV actually own addressable receivers. Free TV dominates and thus limits any strategy aimed at building up pay platforms, e.g. offering attractive sports rights as is the case in other European countries. The approach adopted by the publishing houses which increase their subscriptions in the light of the downward trend of advertising is a strategy which the commercial broadcasters cannot resort to at all. Developing addressable platforms for financing content offered in the HD standard comes up against opposition from consumer protection; to aggravate the situation, attractive HD content is offered by public-service television without encryption, in particular sports events. Technical mechanisms for limiting copying and time-shift
21 consumption could also stunt acceptance. And lastly, transparency as regards consumers is not helped by Sky and Astra and the commercial advertisingfunded television providers which pursue different HD strategies. Since the providers have to pay for the distribution of their content via cable and satellite, they have less money left for investing in content in the medium term. On the other hand, the cost of television is so low for German television households that an additional surcharge which may come about with the new media fee which will replace the licence fee should be acceptable. As far as the broadcasting platforms are concerned, a route could be chosen which corresponds to the suggestion that publicservice broadcasting should give up advertising. While a moderate increase of the cable fee would be comparatively easy to handle, satellite faces the practical problem of lacking any direct customer relationship to most households. This, in turn, will reduce the acceptance of an increase of the cable fee. As regards satellite transmission, public-service broadcasting strongly opposes addressability on the grounds that it could be endangered by a distribution going beyond Germany and rights acquisition might be put at risk. Lastly, it is argued for reasons of data protection and consumer protection that the possibility of watching TV via DTT and satellite without individualising reception should be retained. Anonymously decrypting content as envisaged for HD plus could be one way, even if this model does not become successful for other reasons or raises concern as regards competition issues. But solutions are necessary since the broadcasting world is facing the challenge of the internet platforms collecting data in a far more precise way that would be possible for broadcasting platforms, notwithstanding addressability, and since the advertising money is shifting accordingly. There must be some form of compensation for this scenario if the fact that the use of audiovisual media is not fully registered, is considered a value in itself. Platforms constitute an essential component for such solutions. Infrastructure providers and platforms The telecommunications industry is naturally interested in compensating transportation costs going down as a result of broadband infrastructures being set up by participating in creating value through content and applications. For the infrastructure providers, it is no longer enough to simply provide circuits and connections. The mobile industry faces the dilemma that the two most important products for generating turnover, telephony and SMS, take up only a small percentage of the data rates available in broadband networks; they therefore want to generate revenue through content and applications, mostly video content for which consumers are usually not willing to pay the cost incurred for the data volume required for transmission. Setting up new infrastructures requires considerable expenditure and demands higher frequency capacities. And unlike cable, mobile telephony is also facing competition in the same area of distribution. The success of building up platforms in the fixed line networks and mobile networks for marketing content has been limited to date. Rather, the development confirms the fact that new enterprises such as Google and Apple are far more innovative as regards new offers. The development of broadband to date was based on the networks being open, guaranteeing competition among platforms and choice for consumers as well as providers of content. The foreseeable funding problems will result in attempts to give preference to desired uses in transport management and discriminate against content which is less wanted, or levy extra costs, as is the case for file-sharing. Financing: yes, but data protection must be ensured Infrastructure providers and net neutrality
22 Broadcasting gearing up for the internet Basic access must remain open for all Another issue is the question whether it is possible to get platform providers to pick up a share of the costs for the network in the way in which the cable operators are still practising it vis-à-vis television content providers. Content providers and network operators share the interest of making the exchange of videos between users more complicated. They take up a considerable amount of the data volume without the network operators or the content providers benefitting accordingly. It will hardly be possible to prevent differentiated pricing models if the minimum requirements concerning transparency are met. From a media regulation viewpoint, this is unproblematic as long as providers of television content and telemedia content are not treated differently. A closer look at the issue of net neutrality will raise many more questions. Challenges for regulation Securing basic access to television and the internet Today, for participation in social and political life, access to broadband internet is as much a precondition as is universal supply with television. Public responsibility is met not only by warranting access to television and broadband internet as such (which requires special efforts in some respects, e.g. as concerns supply in rural areas). Access must also be devised in such a way that citizens can have unrestricted access to all offers of information they wish; vice-versa, content providers must not be prevented from gaining access to users. Basic supply with public-service broadcasting is as dynamic today as is basic supply with television and the internet; it has to be interpreted on the basis of actual use. A rough distinction could be made between must have and nice to have. Mobile TV would in this respect thus be an ancillary use only while access to the internet independent from a specific location constitutes a key requirement for communication. If, as is the case for Apple platforms, a proprietary, albeit specially comfortable access to the internet is offered, this does not put open basic supply into question as long as basic access remains ensured alongside. The most important form of access protection in the medium term consists of preventing basic access to broadband internet from being linked to platform functions which select and market content or services. This will retain the option of an immediate communication between providers and users as well as among users; new platforms must be able to develop without any obstruction by network operators. For instance, access to the internet must not be compulsorily bundled with an IP TV offer. Rules must also be adhered to by transport management. There must not be any preferential or discriminating treatment of specific services without justified cause. Everyone will agree that emergency calls should be given preferential treatment or that voice communication in real time should not be discriminated in comparison to less time-sensitive data transmissions. Other matters concerning net neutrality are more complex and require further investigation. However, it has to be clear that there must not be any selection on the basis of content criteria which is typical of platforms. The broadcasting frequencies in rural areas freed up in the digital dividend process must command higher requirements for basic access than any supplementary mobile use. Restrictions concerning specified uses in the form practiced by the mobile industry for services such as internet telephony cannot be accepted in this area. Open access to the internet must also be secured through corresponding measures as regards the receiver systems. Customers must not be referred to sets limiting or hampering certain uses.
23 Specific rules for broadcasting platforms Since broadband internet access will take up only a small share of television consumption for the foreseeable future, specific rules are needed for networks and platforms serving basic supply. For providers and for users, rules ensuring preference for public-service and advertising-funded television are a key requirement. Regulation is needed since many households in fact lack real choice among the various transmission platforms while broadcasters can only survive in the competition if they are distributed on the main platforms. Regional and local content requires special access provisions. Regional and local providers cannot draw on the advantage of internet platforms allowing access from anywhere, but must deliver their content to locations determined by the respective network operator. As the networks are built with supra-regional considerations in mind, delivery of local and regional content to the point of delivery becomes more costly. Regional access must be classified as part of the overall network; its cost must not be levied upon local and regional providers alone. Since selection by the platform operator must be accepted on principle unlike in the case of the open networks of the internet further provisions are needed to ensure that no individual platform controls access to such a large share of the German television households that they cannot be accessed any longer unless said platform is used. As regulated in the USA, market shares should be introduced for platforms compiling television content. This will become particularly relevant regarding attempts to control the entire level 3 cable networks. The provisions of cartel legislation should not be taken to be sufficient by themselves. In the longer term it might be useful to develop instruments for gathering the information required from a media specific viewpoint as regards data traffic on all platforms and use them for developing a new structural model. As is the case for the platform regulation already in force, wider scope could be provided for programmes for which there is special payment. A similar approach could apply to the provision of TV content for mobile reception. The role of Deutsche Telekom needs to be watched particularly carefully since it not only has the key resource of the German football league in its hands but also commands a dominating position in the area of fixed line and mobile telephony. The possibility of various positions of dominance being combined must be monitored not just from the viewpoint of state influence, but also in order to keep competition open. Telecommunications enterprises focussing their business efforts at distribution provide a certain counterweight which keeps the success of Telekom s efforts in the creativity sector at bay. As long as the receivers provided and the receiver specifications established due to the exclusivity of the Bundesliga transmission rights on the one hand and the regional monopoly for cable distribution on the other hand result in impeding access of other platforms, requirements regarding the openness of receivers must be controlled; the Federal Cartel Office is conducting such an investigation at present. However, the receiver specifications of today have lost the key role which they held during the introduction of digital television. Obligatory carriage which applies for other networks does not have to be mandated for cable even if this will result in greater limitations of the choice available to consumers than in other telecommunications sectors. The other platforms and level 4 of the cable networks generate sufficient incentive to tailor offers in line with the interests of consumers, all the more so since there is little chance of distinction as regards different types of content. Market share ceilings for platforms
24 Broadcasting gearing up for the internet Will the three major internet platforms continue to hold back? Regulation potential for navigating systems Selection through internet platforms As long as internet platforms do not offer their own content or are connected with content providers and as long as the open network is ensured for other platforms, additional provisions do not appear necessary, at least not at present. On the other hand, platforms are interested in standing out for selection by not distributing certain types of content. Apple has adopted a practice to this effect with a view to US views on morale. Transparency for such criteria as well as equal treatment for all comparable cases and a procedure to control that this is the case need to be specified. Internet platforms for search and navigation require additional provisions which match the current rules of the Interstate Broadcasting Treaty if no adequate competition ensues. The most important objective is ensuring various options for consumers even where they have a choice among several platforms so that they can select the one which appears to suit them best. Provisions concerning vertical integration The separation of network and use is as old as a principle as the combination of the two inspires the fantasy of the industry. No legal rules exist as yet for broadcasting platforms except that any albeit rather theoretical shareholding of a television group in a cable network operator would have to be examined with a view to media concentration. The provisions of cartel law should also be sufficient for the future. Internet platforms, on the other hand, deserve far greater attention, in particular the big Three rather than the frequently practised participation of German media companies in platforms dealing with specific aspects only. Not even the interest Murdoch holds in MySpace can so far be rated a success. Apple, Google and Facebook have so far practised restraint, but will they continue to do so? As Apple does not yet offer its own content on the platforms it operates, no provisions in the interest of other types of content have as yet become necessary. But would alliances in the content sector not be the obvious next step in the future? They already exist in the co-operation concerning marketing of receivers which are assessed differently in the various countries. Even if basic access to the internet is not at stake, key positions regarding access to content providers are developing. If, for instance, Apple gains a position for the distribution and marketing of convergent media products as planned by people like Stefan Aust which matches the significance of major cable operators or ASTRA for the financing of television services, corresponding regulation will be needed. There are also good reasons for direct customer access being warranted alongside that of the platform operator so that subscriptions of printed newspapers and magazines can be complemented by electronic products. As far as Google is concerned, transparency and the control of the criteria for selecting media is the issue at stake. The more widely-facetted the activities of Google become, the more the question arises what chances will be left for those businesses operating in the individual areas. Will access become more and more difficult in the internet through the sheer financial clout and dominating market position that Google holds? The fact that internet platforms operate internationally does not impede regulation, especially not in those areas where the distribution and marketing of German media is at stake. A business headquarters in Luxemburg should exempt the Apple itunes platform from keeping to the rules of open access as little as it does ASTRA. The provisions concerning media concentration require a principal review. To date, media concentration in Germany is regulated with a focus on television and the national market. While television is set to remain the most important media for some time to come, its impact is as unlikely to grow as is the case for the printed press. There are more and more distribution outlets
25 for television and other media content; consumers exert more and more influence over their media consumption with the varied options the internet and electronic programme guides have to offer. User-generated content gains in importance, also in the political debate. Bild and the box are losing influence. Digitisation is speeding up this development, thereby accelerating the creative destruction of traded positions of power. In their place, new positions of dominance are developing, e.g. in the area of search engines which are already facing challenges themselves. The open internet has developed a power which thwarted all attempts at creating walled gardens. It will remain a key mission for any media order to maintain this open structure and to ensure competition in all key positions and to keep access open for new ventures. The number of media exerting considerable influence on the formation of opinion will remain limited; mass-attractive content such as films, television as well as other journalistic high-quality media can be funded to a limited extent only in the digital world. Additional provisions will be needed if platforms exerting considerable impact on the formation of opinion start to offer their own content without sufficient competition being in place. In return, the existing safeguards such as the licensing of broadcasting content could be given up; a market share model covering all media is no longer needed. The only issue which the legislator has not yet clearly regulated is the possible connection of Bild with one of the two commercial television groups. Platforms act internationally, from Liberty to Apple, while media markets continue to be characterised by national deliberations. Even if the provisions concerning media concentration were handled more generously in Germany, the country would still feature a particularly varied media system in an international comparison without major players being able to dominate the market as is the case in the UK through Murdoch or in Italy with Berlusconi, and also the best-funded public-service broadcasting in the world. Data protection and copyright the key funding issue The platforms in the internet are built on collecting and using data, but do not participate in funding media content or infrastructures. How content will be financed in the future, what role the future media fee will play, whether and how the rights of authors and distributers can be better protected, how the rules for dealing with data can be developed these are the key issues for the development of platforms in the internet and in broadcasting, even if they are not part of platform regulation in a narrow sense. Looking into them would go beyond the scope of this contribution. Uniform regulation is the protection of minors an appropriate example? It has been possible to establish uniform objectives for broadcasting and other media offers in the internet with a view to the protection of minors; a joint supervisory regime was organised. However, the deliberations on the development of platforms show that the issues at stake will be considerably more varied and more plentiful. First of all, therefore, the status quo should be identified and the exchange of those responsible for regulation should be strengthened. Many questions go beyond the national and even the European scope. By participating in this debate, the media authorities fulfil their mission of promoting a diverse media landscape and preventing positions of dominance regarding the formation of opinion. Review of media concentration law
27 Digitisation of the German television market facts and figures
28 Facts and figures Current state of digitisation in German TV households, June 2010 Andreas Hamann For the sixth time in succession, the German regulatory authorities or media authorities as they are now referred to more and more, are establishing the facts and figures on digital television reception in German households. For this purpose, market research company TNS Infratest carried out telephone interviews with 8,000 households during the period 20 May 28 June 2010 regarding their mode of TV reception. The interviews were conducted disproportionately regarding the 16 German states to allow for the situation in each state to be shown separately. Further details on the methodology are given in the respective section of this report. The present report on digitisation, however, concentrates on the major key figures relating to the national situation. Detailed descriptions can be found on the ALM homepage (www.alm.de/digitalisierungsbericht). Continuous increase in digital households The rate of digitisation continues its upward trend during the current year with 61.7 per cent of German television households now having at least one digital mode of reception at their disposal (see Fig. 1). This means that 23.133 million TV homes make use of at least one of the four digital infrastructures (DTT, DVB-S, DVB-C, DSL-TV). Compared to the figures established for 2009, the number of households has risen by approx. 2.6 million. Compared to this, around 14.331 million households still exclusively watch analogue television. The share of digital television households has trebled since the ALM published its first report on digitisation in 2005. If this trend were to continue in a linear fashion, digitisation could be expected to be completed in 2015. This theoretical approach, however, must take two factors into account: One the one hand, the last analogue households will be hardest to convince of switchover. Saturation in such switchover processes typically flattens towards the end. On the other hand, the decision of the major TV providers to switch off analogue satellite transmission by 30 April 2012 will speed up switchover (more on this later on). Slight shift in the shares of transmission routes The shares of the various routes of transmission remained largely stable, continuing the trend of the previous years (Fig. 2). As before, cable still provides access to television in more than half of the television households (51.4 per cent), retaining its lead concerning relevant routes of transmission for the content providers.
29 Compared to 2009, however, the share of cable households has gone slightly down while DSL-TV is on the increase for the second year in succession. Some 2.3 per cent of television households use the telephone cable for TV reception. There is some reason to assume that consumers who used to receive cable TV now prefer the comparatively new DSL-TV for transmission. The substitution could be due to the fact that the range of services available compares well and that competition via attractive pricing gets hotter. It also appears rather unlikely that a satellite or DTT household which has on principle not had to pay for using these infrastructures would voluntarily switch to a form of reception which has traditionally been charging connection fees. Upwards trend of digital continues Only two of the four transmission infrastructures for television reception still allow for analogue signal supply, namely cable and satellite. DSL-TV has been exclusively digital from the start while terrestrial transmission completed the switchover process last year. The analysis of the status of digitisation for the various modes of transmission can therefore concentrate on cable and satellite (Fig. 3). While DTT and DSL-TV are fully digital, their share of households with digital television reception is comparatively low. This is due to the small number of households featuring DTT and DSL-TV reception (Fig. 4). While some 4.167 million households resort to DTT reception, digital cable is used in some 7.290 million homes. Fig. 1 Digitisation in German television households 38.3% 51.6% 61.7 per cent of television households have access to digital television 45.0% 46.4% 10.1% 8.6% 2009 Basis: 37.464 million TV households in Germany Source: ZAK 2010 digitisation report analogue TV reception only = 14.331 million TV homes digital TV reception only = 19.327 million TV homes digital and analogue reception = 3.806 million TV homes
30 Facts and figures Satellite to switch over in 2012 In 2010, 79.1 per cent of satellite households in Germany receive digital TV signals while for cable, the share is 37.8 per cent. This translates into 12.699 million satellite households and 7.290 cable homes respectively (Fig. 3). Both routes of transmission could continually increase their shares of digital reception. Compared to 2009, digital cable grew by 7.2 percentage points while digital satellite went up by 5 percentage points. Taking the two modes of transmission together, around 1 million television households went digital last year (DVB-C: up by 1.239 million, DVB-S by 1.045 million homes). This positive development proves the continued progress of switchover from analogue to digital television reception. Satellite transmission seems to confirm the finding that such curves tend to flatten out towards the end of the switchover process. This is due to a number of reasons, be it the fact that some households are simply not aware of the existence of digital reception alongside analogue transmission. Many viewers are also unsure what type of new receiver they might have to buy. And for quite a considerable number of homes, analogue services appear to do; they do not see any need for replacing their familiar working TV set by a new one. To convince viewers concerned of the benefits of digital reception will therefore still require some information effort. Fig. 2 Access totals via cable, satellite and terrestrial reception 60% 50% 53.7 51.7 51.8 52.5 52.8 51.4 43.1 42.5 42.0 42.0 42.1 42.8 40% 30% 20% 10% 11.5 11.1 11.3 9.7 9.2 11.1 0.3 0.3 1.0 2.3 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 cable satellite terrestrial reception DSL-TV Basis: 33.904 / 33.904 / 36.981 / 37.277 / 37.412/ 37.464 million TV households in Germany Source: ZAK 2010 digitisation report Sum total > 100 per cent due to homes with several reception platforms
31 At the initiative of the media authorities, ARD, ZDF, RTL Group and ProSiebenSat.1 Media AG, together with the trade association of the commercial broadcasters (VPRT) agreed on 30 April 2012 as the date for analogue satellite switch-off since the digitisation of satellite has now reached a high level. Two years before switch-off, the parties involved set up the klardigital 2012 project to conduct an information campaign. A joint project office will inform audiences now whether they are affected by the switch-off and if so, what they can do to ensure continued TV reception. In addition, special trade, craftsmen, the housing industry and cable network operators will also be advised on the pending measures. In this context it transpired that the major cable network operators will continue to provide analogue TV services for their customers beyond 2012. The date on which cable will give up analogue transmission will be decided by the market and consumer acceptance. The positive experience gathered in the DTT switchover process gives reason to hope that almost all satellite households will have switched to digital reception by the day of analogue satellite switch-off on 30 April 2012. The present survey established some 3.349 million analogue satellite households. Taking into consideration that some of these homes have several TV sets, some 5.191 million receivers would have to be exchanged. In the light of the comprehensive campaign which is supported by all market players ensuring wide distribution this appears a realistic option. Further information can be found under www.klardigital.de. Fig. 3 Digitisation by transmission platforms 100% 90% 80% 70% 60% 50% 40% 30% 57.3 65.7 74.1 79.1 20% 30.6 37.8 38.8 47.2 10% 9.7 15.2 16.2 21.0 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 cable satellite Basis: 17.529 / 17.571 / 19.859 / 19.588 / 19.765 million cable TV homes 14.616 / 14.242 / 15.734 / 15.657 / 15.773 million satellite TV homes Source: ZAK 2010 digitisation report
32 Facts and figures Cable continually on the road to digital Progress regarding digitisation is not limited to satellite, but also features cable. The increases relating to the digitisation of cable exceed those of satellite; this could be due to the fact that saturation has not yet been reached. Looking at the situation in a positive manner, it can be stated that cable households obviously find digital pictures attractive. But it is not only the better picture quality and the increasing number of high-definition (HDTV) programmes available which contributes to the continuing upward trend of digital cable. The switch-off of analogue satellite is expected to put digitisation in general and in the cable networks into the focus of attention. Furthermore, DSL-TV will also boost competition. And digitisation will also be promoted through the acquisition of new television sets which nowadays almost exclusively feature integrated digital receivers. As the figures published by market researcher gfu/gfk show, approx. 2.1 million LCD TV receivers were sold during the first quarter of 2010 alone. Assuming that the sales figures will reach similar percentages during the second, third and fourth quarters, this would translate into just under every fourth household in Germany purchasing a large flat screen set. The overall majority of these sets already features digital receivers, usually for DTT and DVB-C. By purchasing such a set, the analogue cable household practically goes digital automatically. Fig. 4 Modes of reception in digital households 70% 60% 65.0 61.8 61.1 59.1 56.7 54.9 50% 40% 30% 29.4 31.5 20% 23.0 23.6 21.8 19.4 24.7 22.5 20.5 17.2 16.7 18.0 10% 0.6 1.8 3.8 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 cable satellite terrestrial reception DSL-TV sum total > 100 due to homes with several reception platforms Basis: 23.133 digital TV households in Germany Source: ZAK 2010 digitisation report
33 Since the beginning of 2010, most sets on offer also feature a so-called CI+ slot. This interface allows for integrating different encryption systems which will become relevant once the cable operator encrypts the signals. Cable households require an according decryption system which is now on offer as a module for inserting in the CI+ slot of the receiver. Rate of digitisation on the up with the number of sets Approx. one third of German television households (33.7 per cent) own more than one television set. It can be noted that the number of sets in the home increases in line with the rate of digitisation (Fig. 5). While this reaches just over half (56.4 per cent) the homes owning one set only, the rate of digitisation in households owning three or more sets already stands at 77.7 per cent. An analysis of the results of the survey shows that the main TV set is switched to digital reception first. This continues to apply for DTT households 82 per cent of which use the digital terrestrial signal of the only or most frequently used television receiver in the home. Compared to 2009 (87.6 per cent) the share went slightly down. Fig. 5 Digitisation of TV sets according to mode of reception 100% 37.464 m 24.872 m 9.613 m 2.979 m 90% 80% 70% 60% 61.7 56.4 70.7 77.7 50% 40% 30% 20% 10% 38.3 43.6 29.3 22.3 total TV homes 1-set TV homes 2-set TV homes 3 +-set TV homes Basis: 37.412 / 37.464 million TV households in Germany Source: ZAK 2010 digitisation report digital exclusively analogue
34 Facts and figures Terrestrial reception stable The share of television households opting for terrestrial reception has remained almost unchanged (11.1 per cent), as has the rate of DTT reception in the various German states (Fig. 6). Regions in which public-service and commercial broadcasters can be received via DTT feature an above-average rate of DTT reception while the reception rate is below average in areas where commercial broadcasters are not available via DTT. Notwithstanding the fact that DTT reception is free of charge, the majority of viewers do not appear prepared to forego the entire range of services which includes commercial broadcasting as well. During the last year, RTL Group started DTT transmission in the Stuttgart and Halle/Leipzig areas, transmitting the signal in a different compression standard necessitating new receivers which also allow for the reception of ARD and ZDF. There are no data to indicate as yet whether this has greatly increased the rate of digital reception in these areas. TV reception on the PC and the laptop on the up The present investigation concentrates on the traditional reception of television via the TV set. However, PCs and laptops are now also used more and more for watching television. This does not mean media use in the internet (featured in the following article by Johannes Kors) but TV reception using a set-top box or a DTT stick which is connected to the PC or laptop. This mode of reception increased compared to last year. In 2010, some 4.914 million TV households watch TV on the PC or laptop while in 2009, the number reached some 3.766 million. With a share of 30.6 per cent, DTT leads cable (21.4 per cent), DSL-TV (20.2 per cent) as well as satellite (11.5 per cent) respectively. The lead can be easily explained; it is due to the fact that upgrading a computer for DTT reception is comparatively easy at low cost while the other modes of transmission still mostly require a set-top box.
35 Fig. 6 DTT transmission by German states Flensburg Köln Aachen Bonn Rhineland- Palatinate Trier Düsseldorf Koblenz Aurich Münster Northrhine- Westphalia Siegen Wiesbaden Mainz Saarland Kaiserslautern Saarbrücken Bremen Frankfurt/M. Mannheim Schleswig- Holstein Kiel Cuxhaven Lower Saxony Hannover Osnabrück Bielefeld Hesse Hamburg Kassel Göttingen Würzburg Lübeck Lüneburg Braunschweig Thuringia Erfurt Weimar Nürnberg Schwerin Saxony-Anhalt Halle Rostock Mecklenburg- Western Pomerania Potsdam Leipzig Brandenburg Berlin Frankfurt/O. Saxony Cottbus Dresden The range of services available varies from region to region. Status per July 2010 source: www.ueberallfernsehen.de commercial and public-sector channels public-sector channels only Stuttgart Baden- Wuerttemberg Ulm Augsburg Bavaria München Regensburg Freiburg Konstanz 30% 25.7 23.8 20% 10% 11.1 7.1 9.0 10.5 15.6 10.9 2.1 12.3 15.6 7.3 3.4 4.1 5.4 14.6 3.6 Germany in total Baden-Wuerttemberg Bavaria Berlin Brandenburg Bremen Hamburg Hesse Mecklenburg- Western Pomerania Lower Saxony Northrhine-Westphalia Rhineland-Palatinate Saarland Saxony Saxony-Anhalt Schleswig-Holstein Thuringia million TV homes Basis: 37.464 million TV households in Germany Source: ZAK 2010 digitisation report
36 Facts and figures Watching TV online: reach and acceptance of web TV Johannes Kors In 2009, viewers spent an average 212 minutes per day watching television. Apart from the year 2006 for which the same rate was measured, this is the longest time viewers ever spent consuming traditional television. For those who speak up for the internet and already rate television as a thing of the past, this information which was provided by consumer research institute GfK (Gesellschaft für Konsumforschung) at the start of 2010 will have come as a surprise. Alongside traditional television consumption, internet television gained in relevance over the last few years. According to the ARD/ZDF 2009 online study, around two thirds of Germans going online at least occasionally watch TV and video content in the internet. Internet television comprises new forms of content such as IP-TV, web TV, catch-up TV (television broadcasts on demand), video-on-demand as well as video portals and integrated moving images in the online offers of publishing houses as well as other online content. All this will probably not replace traditional TV but may well increasingly gain in acceptance. Types of offer and developments No generally accepted definition of the term internet television has been established so far. The terms IP-TV and web TV are used as synonyms. Internet Protocol Television is the smallest common denominator underpinning the varied forms of distribution of television in the internet. IP-TV Internet Protocol Television (IP-TV) generally relates to the broadband transmission of digital television content via a closed network. 1 Reception on the classical TV screen is effected via a set-top box. In Germany, IP-TV is offered by the telecommunications providers Deutsche Telekom ( t-home ) and by Hansenet with its Alice product range. IP-TV is usually one component of so-called triple play offers alongside broadband connection and telephony. Users must pay an according monthly fee. IP-TV is thus considered the fourth transmission platform alongside DTT (terrestrial reception), DVB-S (satellite) and DVB-C (cable). In addition to traditional TV content, other services such as video-on-demand and interactive service can also be received via IP-TV. Web-TV Unlike IP-TV, web TV downloads television-type content from the internet via streaming onto a computer, laptop, smartphone or mobile handheld serving as receiver. Web TV requires broadband internet access with a minimum download speed of 2 Mbit/s. At the beginning of 2010, more than 60 per cent of Germans could already access the internet via 1 see PricewaterhouseCoopers: IPTV Das neue Fernsehen? Dusseldorf 3/2008
37 broadband which usually offers sufficient bandwidth for web TV consumption. Content available in HD quality which will become more and more relevant for tomorrow's television, however, requires bandwidths of at least 8 Mbit/s, depending on the network. Web TV includes the content available in the media libraries of public-service and commercial broadcasters free of charge, the video-on-demand portals of the commercial broadcasters offering content for which consumers have to pay in most cases, TV aggregators such as Zattoo as well as original web TV offers (see Fig. 7). In addition, Web 2.0 portals such as YouTube, MyVideo or Clipfish are also classified as web TV, depending on the definition. On the basis of a first analysis, the Berlin-based consultancy Goldmedia puts the figure for the year 2009 at around 1.900 web TV providers in Germany. Web TV allows the traditional television broadcasters to expand the reach of their services, thereby generating additional advertising revenue and charging extra fees for video-on-demand offers of broadcasts already transmitted in traditional TV. For the advertising industry, video-streaming offers are particularly attractive as the return channel allows for the transmission of targeted advertising and for directly addressing consumers. In addition, web TV is gaining in relevance rapidly in the form of so-called corporate TV or business TV (Fig. 7). Fig. 7 classification of web TV offers Type of offer Examples Characteristics web TV channel (online only) Ehrensenf, PietShow, Sail.tv original web tv production for the intenet web TV spin-offs and media libraries of traditional TV channels rtl.de, sat1.de, n24.de, daserste.de, wdr.de, ZDFmediathek, france24.com take-over from traditional TV or additional offer web videos of existing media (print, radio & portals) bild.de, SpiegelOnline, Focus.de, sueddeutsche.de, radioenergy.tv, t-online, msn online offer usually comprising text, photos andvideo contributions pay-on-demand offers maxdome, LIGA total, save.tv, sportdigital.tv, FC Bayern TV fee-based web TV non-commercial web TV offers Bundestags TV, green.tv, CampusTV original web TV provided by public bodies or institutions corporate TV Mercedes Benz TV, RedBull TV, adidas.tv, Douglas online TV business TV, image and trade mark content multi-channel aggregators Zattoo, hulu, 3min provision of different bundled web TV offers Video-Plattformen YouTube, MyVideo, Clipfish, megavideo users simultaneously act as web TV providers
38 Facts and figures Audience reach and acceptance of IP-TV and web TV Internet-based television will get a definitive boost over the next few year, experts believe, accrediting it not lastly to the improved internet supply and the resulting higher bandwidths. For the year 2014 Goldmedia forecasts approx. 3.1 million IP- TV households. 2 This corresponds to approx. 8 per cent of households overall. At the beginning of 2009, the rate was 1.1 million or 2.9 per cent of households. Goetz Partners, another consultancy, puts the number of users of IP-TV and web TV for the year 2020 at 37.8 million, compared to 15 million at present 3 (Fig. 8). The ARD/ZDF online study lists user-generated video portals and media libraries as the most popular offers frequented as web TV. The results of the TNS Infratest study conducted for this report confirm these forecasts. User-generated content is already watched by 19.7 per cent of TV households at least once a week. This corresponds to an increase of 37 per cent over 2009 and is almost double the rate given in 2008 2 Goldmedia: IPTV 2014 Geschäftsmodelle und Prognosen für IPTV-Plattformen in Deutschland, Österreich und der Schweiz, Berlin, May 2009 3 Goetz Partners: IPTV-Studie 2009, Munich, May 2010 Fig. 8 IP-TV households and share in TV reception in Germany 2008 2014 3.5 3.1 3.0 2.8 2.5 2.4 7.2% 7.8% 2.0 1.9 6.3% 1.5 1.4 5.0% 1.0 1.1 3.7% 0.5 0.5 2.9% 1.4% 2008 2009 2010 2011 2012 2013 2014 Source: Goldmedia 2010 million IP-TV homes percentage of TV reception
39 in which the report on digitisation listed it for the first time. The media libraries of the public-service broadcasters are also frequented by more and more viewers: some 6 per cent of the population (3.7 per cent last year) now use the TV libraries. By contrast, only 2 per cent of TV households (2009: 1.9 per cent) watch live broadcasts via the internet at least once a week, while the rate for video-on-demand consumption is only 0.5 per cent (2009: 0.3 per cent). Considering the cost incurred for users, the low rate does not really come as a surprise (Fig. 9). The consumption of web TV in the internet has not yet been investigated in detail as regards audience reach. The AGOF study which is coordinated by ag.ma largely provides data on the use of advertising-funded online media and e-commerce offers. Online content offered by public-service broadcasting is not detailed; major market players such as YouTube are not taken into consideration. By contrast, Nielsen NetRating collects all offers as regards internet consumption and publishes the data measured as far as they are available. The Nielsen panel is based on the technical measurement of internet consumption including some 24.000 persons, giving monthly data not only on the number of users (unique audience), but also on the duration of consumption (total minutes), thus providing the largest collection of data on online consumption available at present. The data provided by Nielsen NetRating confirm that usergenerated content scores the highest audience reach for moving images offered in the internet. YouTube ranks first among video portals. During the first quarter of 2010, the unique Fig. 9 Video content in the internet frequency of use in TV households use it at least once a week 20% 19.7 15% 14.4 11.9 10% 5.9 5% 3.7 2.7 2.0 1.9 1.2 0.5 0.3 0.3 2010 2009 2008 2010 2009 2008 2010 2009 2008 2010 2009 2008 user-generated content media libraries live TV in the internet video-on-demand Basis: 37.464 million TV households in Germany Source: ZAK 2010 digitisation report
40 Facts and figures audience of YouTube came to an average 17 million persons per month who watched videos for an average 49 minutes (approx. 1.6 minutes per day). This makes YouTube not only the video portal accessed by Germans most frequently by far, but also the internet video service with the highest acceptance overall. The German video portals MyVideo and Clipfish were watched by a unique monthly audience of 3.7 million and 2.0 million people per month respectively. The video offers provided by broadcasters in the internet are also gaining in popularity. During the first quarter of 2010, rtl. de measured 4 million viewers while Prosieben.de reached 3.7 million users. ZDF.de was watched by 2.7 million persons, wdr. de by 2 million, ard.de by 1.8 milion and sat.1.de by 1.7 persons during the period in question. Taking into consideration the intensity measured in relation to time spent (time per person), consumption of most TV domains in the internet is still relatively low compared to classical television consumption. RTL is watched by more people on a single day than rtl.de during a full month. Even the biggest live event in the internet to date, the 2010 Football World Cup, produced only marginal audience reaches for web TV compared to traditional television. For the Holland Brasil top match during the afternoon, ARD measured 180.000 streams while the rate measured by GfK for traditional television was 12.3 million viewers. So far, web TV content provided by television broadcasters therefore still only complements traditional television (Figs. 10, 11). Fig. 10 Top websites: TV content and video portals in the internet* Rank Website level unique audience per month 1st quarter 2010. in millions time per person per month 1st quarter 2010. in minutes 1 youtube.com Domain 17.0 50 2 rtl.de Domain 4.1 21 3 myvideo.de Domain 3.7 7 4 prosieben.de Domain 3.0 6 5 zdf.de Domain 2.5 15 6 clipfish.de Domain 2.0 9 7 wdr.de Domain 2.0 8 8 ard.de Domain 1.8 7 9 sat1.de Domain 1.8 9 10 daserste.de Domain 1.7 12 11 tagesschau.de Domain 1.7 10 12 maxdome.de Domain 1.6 10 13 sport1.de Domain 1.5 14 14 br-online.de Domain 1.3 7 15 ndr.de Domain 1.2 7 16 swr.de Domain 1.1 13 17 mdr.de Domain 1.1 11 18 n-tv.de Domain 1.1 24 19 sevenload.com Domain 0.9 4 20 france24.com Domain 0.8 1 *) excluding teleshopping offers Source: Nielsen Netview. 1st quarter 2010
41 Development of original Web TV content is still in the starting phase with the media sector testing what to produce. Only one original web TV offer, sevenload.com, has generated a noticeable reach with its community for videos, pictures and web TV. According to Nielsen NetRating, its unique audience came to an average 0.9 million persons per month during the first quarter of 2010. With an average monthly reach of 1.6 million users, maxdome is the video-on-demand offer with the highest audience reach. Apart from portals offering content against pay, the media libraries of the public-service broadcasters are also regularly used. The unique monthly audience of ard-mediathek.de during the first quarter of 2010 was 0.6 million people. The data signal a trend which can also be noted in the USA, namely that the lion share of online consumption relates to people watching content that had already been transmitted in traditional television or which they had missed. 4 The online offers and portals of newspapers and magazine publishers also include video material together with texts and photos. The share of moving images, however, is usually quite limited. The internet offers of the large portals (t-online, gmx, web.de and msn) and publishers (bild.de, Spiegel.de, 4 see Stipp, Horst: Verdrängt Online-Sehen die Fernsehnutzung?, in: Media Perspektiven 5/2009, page 226ff Fig. 11 Top websites: publishing houses and portals with video components Rank Website level unique audience per month 1st quarter 2010, in millions time per person per month 1st quarter 2010, in minutes 1 t-online.de Domain 14.5 50 2 web.de Domain 12.0 94 3 yahoo.de Domain 9.6 53 4 gmx.net Domain 8.4 86 5 msn.de Domain 6.6 19 6 bild.de Domain 5.8 42 7 yahoo.com Domain 4.9 11 8 spiegel.de Domain 4.3 29 9 computerbild.de Domain 4.2 7 10 aol.de Domain 3.9 28 11 gmxattachments.net Domain 3.7 16 12 focus.de Domain 3.5 8 13 msn.com Domain 3.4 5 14 welt.de Domain 3.1 11 15 arcor.de Domain 3.1 54 16 freenet.de Domain 2.9 83 17 sueddeutsche.de Domain 2.9 9 18 pcwelt.de Domain 2.6 8 19 aol.com Domain 2.5 90 20 gofeminin.de Domain 2.5 8 Source: Nielsen Netview, 1st quarter 2010
42 Facts and figures focus.de, welt.de, sueddeutsche.de) reach several million users per month with their online content; this can be considered quite a respectable rate (see Fig. 10). Hybrid-TV Findings so far indicate that traditional TV is not displaced by internet television, especially since new technologies such as HD+, 3D and hybrid TV will make the classic TV set even more attractive in the future. It will be complemented by internet TV which will expand its relevance step by step. The traditional television formats will be increasingly merged with online-specific search services such as portals, search engines, link lists as well as rankings and recommendations based on consumer behaviour in the internet. Hybrid TV will provide another boost for converging television and the internet. HbbTV (Hybrid broadcast broadband TV) which was recently introduced as a new standard allows consumers to watch internet offers such as archive material stored in media libraries on the TV screen. According to the consumer research institute GfK, 1.17 million hybrid TV receivers were sold in Germany by the end of May 2010; this corresponds to 3 per cent of TV households. Goldmedia, the Berlin-based strategy consultancy, forecasts that around 60 per cent of all TV homes in Germany will use internet-ready TV receivers by 2015. The possible dimensions of hybrid TV development become clear when one considers the fact that manufacturer Sony will fit its sets with Google TV in a cooperation as of the autumn of this year. Google TV is based on the Android operating system and can be watched via PCs, TV sets, smart phones and tablet PCs. It allows users to access or search for TV channels and individual broadcasts as well as for web content via any multimedia receiver. It links classical television with the strengths of the internet. After Google, other majors of the internet such as Microsoft and Yahoo now also go for the convergence of television and the internet. While classical television will not be displaced by this development for the foreseeable future, the consumption of linear television can be expected to go down in line with the growing spread of hybrid TV and the increase of web TV offers. How this will impact and alter the consumer and advertising markets, however, cannot yet be forecast at this point.
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44 Facts and figures Digitisation in Europe on the move Mario Hubert At the end of 2008, half of all European television households covered by the ASTRA footprint received digital television. Last year, even more homes went digital, resulting in 60 per cent of television homes being connected to a digital infrastructure (satellite, cable, terrestrial or IP-TV) at the start of 2010. By now, 146 of the 244 million television households in Europe have gone digital; this is an increase of 19 per cent or just under 24 million compared to last year. The rate of digitisation, however, differs considerably across Europe: In Western Europe, 68 per cent of the television homes have already gone digital while the rate in central and Eastern Europe is only 32 per cent. In Western Europe, the interest of consumers concerning digital television is fuelled especially by the positive effects of HDTV and new applications such as time-shift consumption ( catch-up TV"). In Eastern Europe, on the other hand, the focus is set more on the higher number of channels and improved picture and sound quality offered by digital transmission. A comparison of the infrastructures reveals great differences: While digital reception is possible for as many as 92 per cent of satellite households already, DTT (48 per cent) and digital cable (34 per cent) lag far behind. For pushing digitisation along in the future, increased investment is still necessary as regards technology, programme content and consumer information. A look at digital homes in Europe shows that satellite is in the lead in the audience reach league: 49 per cent (71 million households) receive television via this mode of transmission. Compared to last year, the rate increased by more than 7 million homes (11 per cent). But the other digital infrastructures caught up considerably last year, achieving even higher growth rates. In 2009, more than 10 million new households opted for digital terrestrial television; this corresponds to an increase of 32 per cent. DTT now supplies television services to just under 42 million or 29 per cent of the digital television households. IP-TV achieved similar growth rates and pushed up its total by 2 million new homes to just under 9 million households; this is 6 per cent of the digital market. Cable remains in third place as far as digital infrastructures are concerned, reaching 24 million households (plus 4.3 million or plus 22 per cent over last year). A comparison of the status of digitisation of television reception shows that in the European league, Germany ranks in a middle position with a share of 56 per cent. 1 Of the total 37.4 million television households in Germany, more than 21 million have opted for digital reception by now; last year, more than one million homes switched over. Satellite reception has the greatest market share among digital transmission routes (58 per cent), with digital cable coming second (30 per cent). DTT (10 per cent) and IP-TV (3 per cent) make up the rest of the market. 1 Due to the connection to the figures for the other European countries, this figure is based on the SES ASTRA satellite monitor (March 2010); this accounts for the deviation from the data given in the preceding facts and figures section.
45 However, with its 5 per cent increase in digital television households Germany trails all other European countries. This can certainly be attributed to the fact that the German channels with a high audience reach are still available in analogue technology via cable and satellite. For analogue cable, not switch-off scenario has as yet been discussed. While the digitisation of terrestrial television has already been completed, the rate of digitisation of satellite and cable households in Germany still varies widely: Three quarters of the satellite households have already gone digital while for cable, the rate is only one third. The 12 million analogue cable TV households thus present the biggest challenge as regards digitisation. The Netherlands are another country in which cable determines digitisation. It is a typical cable market (77 per cent of all television households). Digitisation of the cable has reached 43 per cent; by contrast, nearly all satellite households have already gone digital. Finland takes pride of place as regards digitisation: It is the only country which had switched all infrastructures to digital transmission for its 2.1 million households by the beginning of this year. Most homes resort to cable reception (44 per cent) or terrestrial television (51 per cent). Terrestrial transmission which includes both free TV and pay-tv (PlusTV) were fully digitised by the end of 2007. Last year, all cable networks delivering TV to the 950.000 Finnish households were Fig. 12 Digitisation in Europe 100% 1.2 90% 1.3 80% 5.2 70% 50.6 34.7 3.3 60% 50% 9.8 56.3 35.5 13.4 4.3 10.7 1.7 5.3 3.7 17.1 40% 31.9 16.9 30% 20% 10% digital TV homes TVhomes 44.4 3.7 Finland UK Spain Italy France Netherlands Germany 2.13 m 2.13 m 42.7 22.56 m 25.49 m 6.4 15.5 13.37 m 16.02 m 32.9 17.12 m 23.90 m 4.1 20.7 17.25 m 24.58 m 32.7 8.5 4.00 m 7.12 m 32.4 21.12 m 37.43 m 9.8 29.1 Europe 145.75 m 244.19 m Basis: TV homes Source: SES Astra Satellite Monitor, March 2010 IP-TV DTT digital cable digital satellite
46 Facts and figures digitised. The strong competition between the various network operators undoubtedly sped up switchover. In addition, two competing services for satellite TV (Canal Digital and Viasat) as well as IP-TV providers are available in the Finnish market, the latter serving only a small section of the market. Runner up to the Finnish rate of digitisation is the United Kingdom where nine out of ten television households watch television via a digital infrastructure. However, there are marked differences between Finland and the UK as regards the shares held by the different infrastructures. DTT is the transmission system most widely used, delivering television to 46 per cent of the 25.5 million British television households. Satellite follows in second place (43 per cent). Three quarters of the terrestrial homes in the UK have already switched to digital reception. The remaining households which have not yet converted their mode of reception are the only analogue households left in the UK since both satellite and cable are fully digital already. Satellite which is represented by the pay-tv provider Sky and the free service freesat takes the lead as far as HDTV is concerned. Sky provides 38 HD channels to its customers who can thus choose from the largest range of HD services in Europe. In addition, Sky now also offers HD-ready receivers at a heavily subsidised price of 49 pounds or gives them away free of charge. This has attracted more than 2 million Sky subscribers to HD reception. As regards households opting for Fig. 13 Digitisation of TV households Source: SES Astra Satellite Monitor, March 2010 > 60% 40 60% < 40%
47 freesat, the overall majority (800.000) also has an HD receiver for watching BBC and ITV in high resolution technology. In all, almost 3 million British households watch HDTV; this is the largest HD market in Europe by far. Furthermore, the digital personal video recorder (PVR) has established itself both for pay TV services (Sky+) and for free- TV (freesat+); satellite TV is highly popular. Some 6.5 million Sky subscribers already use a receiver offering a recording function; in around one third of the freesat households, the option of time-shift television is used. The large number and the quality of digital content together with additional functions make the UK the forerunner of Europe as regards digital television; it will be one of the next TV markets to complete digitisation before long. Finland and the UK are followed by Spain, Italy and France in the digitisation league. In Spain, 83 per cent of households have gone digital already; two thirds of the market are controlled by DTT. The digital television market in Italy (72 per cent of all TV households) is divided more or less equally between satellite and terrestrial television; IP-TV still only plays a minor role with a market share of 5 per cent. These figures show that the digitisation of the television markets is progressing faster in some countries than in others while full digitisation in Europe is still some way away. In Eastern Europe in particular, considerable financial investment is needed for the terrestrial infrastructure but this will probably be hampered by the overall economic situation. One possibility which a country could adopt to avoid the cost incurred in extending the networks could be co-operations between the infrastructures for pushing digitisation; examples for this approach can be found in the UK (freesat) and in France (TNTSAT). But even in Germany, the completion of switchover of satellite transmission which is scheduled for 2012 will require some effort. In particular, informing consumers should not be taken lightly to ensure that they become fully aware of the benefits of digital reception. As in 2008, two developments lent momentum to the renewed growth of digitisation in France. One the one hand, TNTSAT, the digital satellite service, continues to be highly popular among consumers with its bundling service for the free terrestrial channels (comparable to freesat in the UK): Almost 2 million TNTSAT receivers have already been placed in the market. On the other hand, the French internet service providers have adopted a highly successful strategy for marketing low-cost triple-play packages with high bandwidths. These offers are highly attractive for consumers and pushed up the IP-TV market by 21 per cent last year. A total 3.3 million television households in France (13 per cent) now consume television via this infrastructure. This is the largest IP-TV market in Europe by far, representing a total of 37 per cent of all households in Europe supplied via IP-TV. The greatest section of the digital television market in France (46 per cent) is commanded by DTT. IP-TV, DTT and the various digital satellite platforms and cable operators supply 17.2 million digital households. Digitisation of the French television market has thus reached 70 per cent, growing by almost 10 percentage points last year.
48 Facts and figures Methodology This survey employed computer-assisted telephone interviews (CATI) on the basis of the telephone random sampling system used by the Arbeitsgemeinschaft der deutschen Marktforschungsinstitute (association of German market research institutes, ADM). The interviews were held during the period 20 May 28 June 2010. The survey was carried out by TNS Infratest MediaResearch on the basis of a questionnaire which largely corresponds to the German Satellite Monitor (SES Astra). By aligning the survey instruments, the results of the two surveys can be better harmonised. The overall population basis for the survey was represented by all German-language private households in Germany. Since the 2007 survey, the projection has no longer been based on households of Germans only, but also includes households of non-germans. The definition of the term overall population basis this year for the first time corresponds to the definition used by ma (media analysis consortium) for German-language households (= German households plus households with a EU 26 head of household plus household with a non-eu head of household with completed school education). In 2010, the overall population basis was approx. 39.12 million households. Of these, 95.8 per cent (37.46 million) own a television set, forming the basis for the presentation of results. The survey was based on a net number of 8,000 interviews. In each case, the interview was conducted with the person in the household stating that they knew best about television consumption and reception in the household. The 8,000 interviews were conducted disproportionately (500 interviews per state) in order to warrant a sufficiently solid basis for each German state. The disproportionality was balanced later during weighting to give representative results on a total basis. Defining cable and satellite reception Television sets connected to a satellite master antenna system (SMATV) which require no separate receiver for TV reception are counted as cable reception. In these households (approx. 333.000 homes), the high-frequency satellite signals employed for transmission are converted for transmission in the low-frequency SMATV cable networks. The range of services available is pre-defined as is the case for customers supplied by level 3 network operators. Satellite reception therefore only comprises television sets using a satellite receiver. The rationale for this definition is that the survey was devised to analyse reception from the viewpoint of the television households. Establishing transmission platforms and transmission technologies For each of the television sets in the households investigated (with up to nine sets being counted), all available transmission platforms were analysed. Households receiving both terrestrial and satellite services with the same set were included in both transmission categories for the analysis of television reception in the homes. As can be seen in Fig. 2, this can in some cases result in a sum total exceeding 100 per cent. The 4.9 million PCs or laptops which can receive television are not included in the analysis. In the analysis of the transmission technologies (analogue or digital), cable reception forms an exception: Television households with cable reception using a television set which is connected to a digital cable receiver are able to continue watching analogue services. As this form of simultaneous analogue and digital reception does not exist for satellite distribution or terrestrial transmission, all cable television sets with a digital receiver are counted as digital units for the benefit of uniform presentation.
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51 Regulating platforms and securing digital access: the remit of the regulatory authorities Digitisation means radical change: It widens the range of content available and thus generates a need for a new basis of funding; it overcomes the barrier that traditionally separated media and thus puts their traded financing models into question. Digital transmission infrastructures and digital receivers bring new challenges for users facing navigation and orientation. Even if television still retains its leading position for the formation of public opinion and broadband cable holds on to first place among infrastructures in Germany, the traditional positions of power are waning. In their place, new key players battle it out for top place, especially as regards platforms. Digitisation means new major tasks for media legislation and media politics: The issue at stake is no longer the allocation of scarce and correspondingly valuable transmission capacities to foster the variety of services on offer. The classical objective of securing and supporting a varied range of media content now has to be achieved by resorting to new means which are determined by the digital era, independently of transmission infrastructures, receivers and technologies. The convergence of the media is matched by the broadcasting order evolving into a media order. Regulating platforms The former clear separation between the content and the distribution of media is giving way to vertical integration: Network operators are no longer mere transporters of content, but put together and market content to their customers. They gain influence on receivers and the way in which they are used. The principle of receiving all broadcast content on one set which was a truism in the old days can today be realised under complex technical and economic conditions only. On the other hand, the convergence of transmission infrastructures generates new choice for the consumer: he can now watch TV via the fixed telephony line, make telephone calls or surf the internet using the cable network. Television becomes portable and mobile, as does the internet. Regulation has to face the challenging task of securing variety of choice for consumers and warranting identical conditions for the competition of platforms while at the same time taking into consideration the specificities of each use with regard to its relevance regarding the formation of public opinion. The Interstate Broadcasting Treaty has adopted a technologyneutral approach concerning platform regulation for which the German state media authorities developed concrete provisions. The statute on access and platform regulation merges platform regulation and the rules for securing digital access.
52 the remit of the regulatory authorities Digital access Access to media is a core element of any media order. Securing access has to take various forms: For one thing, access to networks and technical platforms must be ensured for content and service providers. For another, concentration of the power of opinion must be prevented as has been the case for a long time. Access is much more important for the formation of public opinion especially for new and innovative enterprises than in the economy in general. The negotiating clout which the major television groups hold in the digital world must also be taken into account. And lastly, access to a varied range of media content must be safeguarded for consumers and citizens. They have to be protected in their sovereign choice and navigation through content, irrespective of the extension of technical options impacting their behaviour as users of media. Analogue-digital switchover The transition from analogue to digital transmission holds great opportunities both for the media industry and for consumers. Organising it to the benefit of all involved presents a great challenge for media regulation. In the case of terrestrial TV transmission, the media authorities successfully moderated an extension of the range of content which paid attention to the interests of consumers. Switchover of satellite to digital transmission will also be completed shortly under the guidance of the media authorities. For cable as the most important transmission platform, this challenge has yet to be mastered. Tools of regulation and convergence of the media Moderating and balancing the differing interests constitutes a major element of platform regulation, taking its position between content providers and platform operators, consumers and media providers. When it comes to the digital world, managing scarce resources is no longer the key concern. The issues at stake are specifications for digital receivers, provisions for channel listings and electronic navigation, rules for the packaging of content, and fine-tuning the framework applying to individual providers. Digitisation has led to increased overlaps between media and telecommunications law; as a consequence, cooperation with the Federal Network Agency is an important element. The changes of the economic framework which characterise the process of digitisation also raise competition issues. However, media politics still has to take on the challenge of deciding on the structures of the industry and ensuring openness, not only with a view to economic considerations. The media authorities can work towards realising the objectives defined by the legislator and safeguard the interests of consumers and citizens in their neutral position. They want to master the challenge of ensuring transparency for digital developments and offering advice to politics. The Commission on Licensing and Supervision (ZAK) coordinates these tasks through its representative for platform regulation and digital access who prepares the decisions of the ZAK with the support of the expert staff of all media authorities.
The authors 53 The authors Andreas Hamann manages the joint office of the Association of German media authorities (ALM). Dr. Hans Hege is the representative for platform regulation and digital access of the ZAK and director of the Berlin-Brandenburg media authority (mabb). Mario Hubert has been working for SES Astra (Luxemburg) since 2007 in the market development section which also deals with market research. Johannes Kors is deputy managing director of the Bavarian media authority (BLM) and managing director of Medientage München GmbH.
54 Glossary Glossary Addressability A receiver or connexion will be clearly and individually identified by a service. This enables service providers (e.g. cable operators) to activate a service or channel for specific receivers, for instance for subscribers of programme packages, while keeping it disconnected for others. Activation is usually effected employing encrypted signals and a so-called smart card. In the case of IP networks, every connexion is identified by its IP address. In contrast to broadcasting networks, the signal or content is not automatically available for every consumer, but is targeted at users who have requested a specific content. Addressability differs from the identification of users; e.g., smart cards can be obtained anonymously. basic encryption encryption of all content transmitted via one transmission platform to allow access for entitled users only. Common Interface (CI/CI+) standardised interface via which a conditional access module (CAM) in the form of a plug-in card can be inserted into the set-top box. CI+ as the CI successor system is to provide better copy protection. digital dividend transmission spectrum freed up as a result of digitisation, as digital transmission of content takes up less frequency capacity than analogue transmission. DSL (digital subscriber line) telephone line used for high bit rate transmission. ADSL: asymmetrical digital subscriber line. Data rates in the downlink are up to 6 MBit/s; ADSL2+ up to 20 MBit/s. VDSL: very high bit rate digital subscriber line: up to 50 MBit/s in the downlink. DSL-TV transmission of content and telemedia services via wired DSL networks. Transmission is based on the internet protocol (IP); the term IP-TV via DSL is therefore equivalent to DSL- TV. t IP-TV DSL networks are comparable to traditional cable networks in that they are accessible only for closed user groups against subscription and the content provider offers only a pre-defined, limited range of TV content or telemedia services. As a system-inherent feature, each customer point is individually connected to the point of delivery for the TV and telemedia services of the network and provides a return channel. This permits the definite addressability of the user. In addition, interactive applications can also be realised at acceptable cost. DTT-2 successor standard to DTT, aiming in particular at more efficient encoding and allowing for encryption. EPG electronic programme guide, an application allowing search and selection of digital TV services in the form of an electronic TV magazine and in many cases also offering other functions such as programming for recordings or access to recorded broadcasts, media libraries or similar. HbbTV (Hybrid broadcast broadband TV) standard published by ETSI (European Telecommunications Standards Institute) for the simultaneous presentation of television and internet content on the TV screen. HbbTV was developed by an industrial consortium and the Broadcast Technology Institute (IRT) and is based on a programming language version which was developed for the entertainment industry.
55 HTML (CE-HTML). The standard has not yet been adopted by all receiver manufacturers some of which use their own systems for the presentation of internet sites on the TV screen. HDTV (high-definition television) high-resolution technology using a 16 : 9 aspect ratio and a minimum rate of 1280 x 720 = 921.600 pixels (full HD: 1920 x 1080 pixels). IP-TV (internet protocol television) television delivery using the internet protocol. The term does not, however, specify the network used for transmission. This requires additional details, e.g. IP-TV via DSL. In general terms, IP-TV is often equated with DSL-TV to distinguish it from t Web TV. MHP (Multimedia Home Platform) standard permitting the transmission of digital content in the sense of an extended, more modern videotext as well as interactive applications. MHP could not establish itself in the market; in Germany, there are hardly any MHP-ready sets available in the market. mobile TV transmission of multi-media content to handheld devices. Transmission can be along different routes, e.g., mobile internet or broadcast infrastructures featuring standards such as DMB (digital multimedia broadcasting) or DVB-H (digital video broadcasting for handhelds). MPEG (Moving Pictures Expert Group) related group of standards compressing audio and video signals. For TV transmission, MPEG 2 and MPEG 4 are usually employed with MPEG 4 offering higher compression rates. MPEG 4 is used for HDTV transmission. navigator system indicating and starting digital programmes based on service information (SI) transmitted in the DVB transport stream. The navigator or base navigator provides only basic technical functions; by contrast, the t EPG also offers content and extended services. set-top box (STB) receiver device for digital television. For the various transmission platforms (satellite, cable, terrestrial, DSL), different types of set-top box are required. simulcast simultaneous transmission of content (programmes, services) of the same type on different platforms (e.g., analogue and digital cable). SMATV satellite master antenna system using multiple satellite and broadcast cable signals to create a single integrated cable signal for distribution to a cabling network for several flats or houses (see Methodology section on page 48). triple play simultaneous supply of broadcast content, internet access and telephony services. Web TV internet television accessible in the open internet. In contrast to DSL-TV, the range of services is not linked to a specific (internet) provider whose content is packaged by the provider of the infrastructure. Web TV is available across the entire world-wide web as far as the bandwidth permits sufficient transmission quality. Independently from the unrestricted distribution across the www, content can be encrypted and can necessitate registration and/or activation.
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