Policy and Marketing Strategies for Digital Media

Yu-li Liu, Robert G. Picard

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317744108
• Edition: 1
• Topic: Commerce
• Subtopic: Industrie des médias et des communications

With digital media becoming ever more prevalent, it is essential to study policy and marketing strategies tailored to this new development. In this volume, contributors examine government policy for a range of media, including digital television, IPTV, mobile TV, and OTT TV. They also address marketing strategies that can harness the unique nature of digital media's innovation, production design, and accessibility. They draw on case studies in Asia, North America, and Europe to offer best practices for both policy and marketing strategies.

Part I
Policy Issues

1
Digital Television and Switchover Policies in Europe

Petros Iosifidis

Introduction

This chapter focuses on the developments of digital television in Europe and the public interest obligations (Feintuck & Varney, 2006; Garnham, 1986) that are raised, such as freedom, access, universality, political pluralism and content diversity. The first part of the chapter considers digital TV penetration data from across Europe, as well as the status of national digital switchover plans, stressing that Northern Europe is much more advanced in this regard than Southern and Eastern-Central Europe. National policies are largely determined by markets, political contexts and supranational influences, notably European Union audiovisual policy, which puts pressure on member states to speed up digital switchover. This creates a tension between the push of the EU to harmonize the switchover process and set target dates and the struggle of some of the member states to comply with this policy. The work then assesses the benefits of digital TV (extra channels, converged communications, enhanced interactivity and mobility) and argues that the public interest outcomes from the introduction of digital TV (DTV) will depend on its universality and accessibility to the public. In terms of the strategies that could be employed to accelerate digital uptake, the chapter points to adopting free-to-air DTV. The wide reach of the free-to-view model, in which public broadcasters have a leading role, ensures that the transition to DTV is citizen friendly, that it meets sociocultural issues and that the universality principle is maintained in the digital age.

Digital Switchover and the Development of DTV

In the multichannel digital era with an unprecedented proliferation of sources of communication, most people still rely mainly on television broadcasting in order to be entertained and informed. The development of television has gone through many phases, with the most recent being the introduction of digital television in Europe in the late 1990s. This major phase was subsequently followed by announcements of individual national analogue switch-off plans. These were shortly followed by a European Commission (EC) initiative to harmonize analogue switch-off dates with the year 2012 as a target.

But it is not only Europe, for across the world countries are switching to digital television at dramatic speed. The technology was only introduced a couple of decades ago, and already, in 2012, half of the world’s 1.2 billion television households have been converted into digital. The main driver of digital switchover was apparently the increasing spectrum efficiency. Another driver, especially from the late 1990s onwards, were the favourable government policies both in the U.S. and Europe that gave a push for the development of the technology. Market considerations also played a key role, with the electronics industries being keen to develop a new generation of hardware (set-top boxes and satellite dishes). Content-wise, the main driving force in the initial stage of digital TV came from the pay-TV sector, especially digital satellite and secondarily digital cable, though more recently digital terrestrial TV gained momentum and in some countries took the lead from digital satellite and/or cable TV.

The digital switchover has had a great impact on viewers, the broadcasting sector, related industries, the government and society as a whole. Broadcasters benefit because they can adopt a multichannel strategy driven by reduced costs resulting from digitalization. The digital switchover has positive effects on related industries such as technology providers, manufacturers, TV retailers and installers. Spin-off effects for governments are triggered by the freeing up of frequencies that are typically sold at premium rates to mobile TV or mobile telephony companies. Societies as a whole are benefited with the increase in bandwidth for digital media, the digital upgrade of households and the possibility of participating in a pan-European, communal digital television culture.

Some outcomes of switchover are clearly cast as positive to the viewer, with consumer choices increasing with regard to distribution mode, technology and content as a result of digitalization. Viewers are able to watch more television channels with enhanced quality with technologies such as high definition (HD), wherever they are (at home or on the move) and whenever they want (thanks to DVRs and video on demand). Digital television involves much more than just extra channels, and the HD channels is the result of convergence—the blurring of the boundaries of broadcasting, telecommunications and computer technologies, based on digitized electronics.

Diverse Levels of DTV Development

But there are diverse experiences as the development and penetration of digital television has been uneven across the globe. Differences between countries—in size, development, culture and politics—play a great role and rule out any “one-size-fits-all toolkit.” The United States completed analogue switch-off (after various postponements) in June 2009. Australia launched its digital terrestrial HDTV in 2001 but then had to postpone the start of switch-off from 2008 to 2013. Digital switchover, understandably, is not a high priority in developing countries, with African countries, for example, expected to convert after 2015. China, the world’s biggest manufacturer of TV sets, developed its own set of technical standards and has concentrated first on digitizing its cable TV systems. The process of digital switchover is very slow in China, as it is in most Asian countries. As will be shown in detail in the following, the development of the technology varies widely in Europe; Finland and Sweden were early completers of switchover in 2007, but other countries have yet to complete the process, despite the EU’s 2012 deadline. In countries like Germany, Austria and Luxembourg, where cable networks predominated, the process of switchover was much more straightforward.

Returning to the benefits of digital TV for viewers, it is obvious that not all of the new services are available to everyone. Whilst not all consumers have equal purchasing power, citizens’ interests are poorly served in terms of access to a universal service. Notions of universal service and access are typically related to sectors such as health care, education and essential services including water, electricity and the telephone service. Universal telephone service, for example, was adopted as a policy objective in both the United States and Europe to encourage economic and social interaction within the individual countries as a way of promoting national unity (Melody, 1990). Most European countries have imposed similar public service obligations on their broadcast media. In contrast to the U.S. broadcasting model, the Western European model developed outside the market. The European broadcasting model—the so-called public service broadcasting model—in its ideal form consisted of a nationwide public monopoly which would universally distribute information, facilitate public debate and contribute towards a common identity in return for a basic, initial payment, usually in the form of an annual license fee. In the course of time, institutions entrusted with these tasks have expanded their activities by venturing onto online media platform. These expansions help the public channels maintain the universality principle in the digital age, but as will be shown in this chapter, these activities have caused controversy and encountered increasing scrutiny from competitors. Meanwhile public channels’ development of their web activities is testing the applicability of traditional regulation. As Moe (2008a, p. 220) asks, “How do regulatory frameworks relate to the wider remits?”—“Is it public service media online?”

Today the universal access paradigm can be applied to a wide array of communications and information services, traditional activities or new ventures, offline or online, with the definition of basic access varying from country to country. In countries such as France and Italy, for instance, there is a push for “universal broadband” while in the UK there is a push for a “digital Britain” (Departments of Culture, Media and Society and Department for Business Enterprise and Regulatory Reform [DCMS/DBERR], 2009). The issue of universality is part of the wider debate over what is in the “public interest” in today’s competitive and liberalized digital world of media and communications. Media marketization, privatization and concentration bring forward important questions on positive freedoms, such as the right of citizens to have equal access to the technologies and to receive a wide range of opinions and information at affordable prices. Potential conflicts between private profit motivations and social goals like universality, affordability, diversity of views and political pluralism now, more than ever, need to be considered and resolved. The problem remains one of designing media regulation in the public interest, in particular of shaping the technological form and accessibility of digital television.

Governments play an active role in regulating the transition to digital, for they consider it a public policy concern. Adda and Ottaviani (2005) argue that the transition to digital terrestrial television (DTT) is a public policy problem and that governments take an active role in the transition because of the interplay of two motives, one economic and the other noneconomic. First, DTT technology uses a publicly owned, rather than a privately provided, network. Here the government acts as the “private” owner of the network and is interested in solving the coordination problem associated with switching standard. Second, most governments perceive the transition to DTV as having important noneconomic consequences, due to the social role of the media. An increased and more competitive supply of television channels should improve the overall flow of information in the society, with positive economic, social and political effects. Operationally, universal access to the traditional TV channels is seen as a minimal condition to avoid social inequalities. The universality principle implies that switch-off of analogue TV will not be feasible and socially acceptable until almost all viewers have migrated to DTV.

The Nordic European region, and countries like the UK, Germany and Spain, stand as forerunners when it comes to the adoption of DTV services, but, as will be shown in the following, other European countries are lagging behind in terms of both penetration of digital services and awareness of the process of digital switchover. Despite the uneven national developments of DTV, digital switchover is promoted vigorously by the European Commission. According to the e-Europe Action Plan, all member states were required to disclose their national strategies for the switchover from analogue to DTV by the end of 2003.¹ In June 2005 the European Commission published a communication “on accelerating the transition from analogue to digital broadcasting” which urged EU member states to bring forward the likely date of analogue switch-off and called for a coordinated approach to making freed-up spectrum available across the EU. The European Commission (2005) suggested the year 2012 as a possible target for the completion of switchover. Following this, many member states have published plans to terminate analogue terrestrial broadcasting, and some have already done so, but there is uneven pace of digital TV transition across Europe.

The dates for the analogue switch-off that have been set by national governments vary greatly depending, among other factors, upon penetration of digital services, the size of the market, the state of technological infrastructure and public awareness of the process to switchover (Iosifidis, 2005, p. 59). Luxemburg and the Netherlands completed analogue switch-off in September and December 2006 respectively, whilst analogue terrestrial in Finland was switched off on 31 August 2007. Belgium (Flanders), Denmark and Germany are among the list of member states which have already ceased analogue terrestrial transmission. The large British market has started regional switch-off of analogue signals, for the switchover started from the Border region in 2008 and was effectively completed with the Meridian, London, Tyne Tees and Ulster regions in 2012.

According to the European Audiovisual Observatory’s latest survey (2012), 22 of the then EU’s 27 member states (now 28) have completed digital switchover, as have the non-EU states of Croatia, Switzerland, Norway and Iceland. Pay DTT services are now available in 17 EU countries and 21 European countries overall. Eighty-six new DTT channels were launched in 2012, and HD channels are available in DTT networks in 22 European countries. A total of 33 pay DTT services were available in 21 countries at the end of 2012 following new launches in Belgium and Greece. However, the number of pay DTT subscribers dropped by 13%, with almost 1 million subscribers dropping out of Italy’s pay DTT service. According to the European Audiovisual Observatory, 369 new channels launched in the EU across all platforms—DTT, cable, satellite and IPTV—in 2012, with over 40% of these being HD channels. The number of channels closing down fell from 143 in 2011 to 62 in 2012. Poland, Hungary, Bulgaria, the former Yugoslav Republic (FYR) of Macedonia and Greece are scheduled to complete switchover at the end of 2013, with Serbia and Bosnia and Herzegovina to follow in 2014 and the remaining countries—Albania, Montenegro, Romania, Russia and Turkey—in 2015. However, recent developments in Greece, in particular the abrupt government decision to close down public broadcaster ERT in July 2013, may postpone the digital switchover target date.

It can be seen that national governments that are lagging behind in terms of analogue switch-off include some of the Southern European countries as well as the new EU members, who joined in 2004 and 2007. Eastern Europe has its own character in terms of digital TV developments. With roughly half of TV households in Eastern Europe relying on terrestrial television, the region represents a large market for free-to-view multichannel television. However, analogue switch-off in this part of Europe has been hampered by political issues, governments’ lack of a political priority and a lack of political consensus that makes it difficult to ...

Table of contents

• Cover Page
• Half Title page
• series
• Title Page
• Copyright Page
• Contents
• Figures
• Tables
• Acknowledgements
• Introduction
• Part I Policy Issues
• Part II Policy Issues Country Case Studies
• Part III Marketing Strategies
• Part IV Marketing Strategies Country Case Studies
• List of Contributors
• Index