Further supplementary memorandum submitted
by Digital UK
INTERNATIONAL SWITCHOVER
This paper provides an introduction to international
switchover plans. It gives an overview of switchover plans in
key European countries, the US and Japan; highlights the ways
in which the UK is uniquely well-positioned to achieve switchover;
and summarises lessons from the experience of switchover so far
in Berlin and Sweden.
Digital UK is working to develop a strategy
for approaching international markets, with the dual objectives
of seeking useful lessons by comparing UK switchover with switchover
elsewhere, and enhancing Digital UK's profile amongst international
switchover agencies. Digital UK hopes to hold a forum for switchover
agencies in the summer of 2006 to share experiences and encourage
the development switchover best practices.
EXECUTIVE SUMMARY
The UK is not a "pioneer" of switchover,
with the transition already well underway in Germany and Sweden
(these countries and the Netherlands are expected to complete
before the UK starts in Border in late 2008)—but it is a
"fast-follower"; seeking to take advantage of the benefits
switchover brings as soon as is feasibly possible given scale
of the digital terrestrial television roll-out and public information
campaign required.
The nature of switchover in the UK is, however,
something of a special case: it is more important because pre-switchover
DTT coverage is far more limited than elsewhere; it is the first
country with significant reliance on terrestrial television to
switch over; but it is also uniquely well placed to achieve successful
switchover, with far higher digital television penetration, vibrant
public service broadcasting and production sectors, and close
alignment on switchover between Government, the regulator, broadcasters
and industry. This last characteristic has facilitated the creation
of a central body to manage the switchover process, Digital UK.
Despite differences in the broadcasting markets
of Germany and Sweden versus the UK some important lessons have
been learnt. The first is the need for central co-ordination to
achieve switchover, and an organisation that can support viewers
through the process (as provided by Digital UK). Second is the
importance of ready availability of free-to-air digital receivers
on the open market at affordable prices (even if there is low
historical reliance on terrestrial television; and particularly
if there is high reliance on terrestrial) and a high starting-point
of digital or multichannel conversion that demonstrates the natural
momentum in the market. Thirdly, is the benefit of a staggered
switchover which allows resources to be rolled from region to
region, and in each region provides a grace period between the
switchover of the first and last channels for viewers to ensure
they are ready. The UK has absorbed these lessons and they have
helped shape its approach to switchover.
In conclusion, the UK's switchover plans (which
began in 2001) have been developed far enough in advance to allow
for a realistic and robust 2008-12 timetable to be adopted, which
provides plenty of time for consumers and industry to plan and
prepare, enabling the UK to be competitive with its European peers.
1. BACKGROUND
An understanding of switchover plans abroad
is important for a number of reasons:
— Lessons can be learned from the progress
of switchover in other countries: policy development, organisational
structures for implementing switchover, technical transmission
plans, communications strategies, and consumer take-up and satisfaction.
— Markets for consumer reception equipment
(and equipment components) and for transmission infrastructure
technology are trans-national, often global, and it is therefore
important to understand demand arising in other markets that could
impact on supply to the UK.
— There are European Commission communications
on switchover, encouraging Member States to pursue switchover
(although the EU has no powers to compel switchover to happen),
and so a European-wide policy on switchover is emerging.
— Switchover plans in other countries
are relevant from a terrestrial transmission perspective, since
frequencies used by neighbouring countries impact on frequencies
available for use in the UK, and in some cases there may be cross-border
transmission issues (eg between Northern Ireland and Eire; between
Eire and Wales etc).
— And finally, because one of the objective's
of UK switchover is to retain UK plc's competitiveness in international
broadcasting and manufacturing markets.
2. INTERNATIONAL
SWITCHOVER PLANS
The following diagram summarises the current
known switchover plans of key European states, the USA and Japan.
Figure 1
INTERNATIONAL SWITCHOVER PLANS (AS OF END
2005)
*Dates not yet confirmed
The Early Movers: Germany, Netherlands, Finland,
Sweden, Norway
Several northern European countries are expected
to complete analogue terrestrial switch-off before the Border
region is switched over in 2008 (Finland and Netherlands due in
2007; Norway due by 2008; and Germany and Sweden due by late 2008
and where switchover has already begun).
Italy, on the other hand, is widely expected
to postpone its ambitious 2006 switchover date. The date of 31
December 2006 was embodied in 2001 legislation, but is recognised
as an aspirational goal, designed to accelerate take-up of digital
TV in a country where over two thirds of the population still
rely on analogue terrestrial services rather than act as a realistic
objective (in mid-2005 approximately 67% of households received
only analogue terrestrial, 22% satellite, 10% DTT and 1% DSL TV
services). The two "trial" regions of Sardinia and Valle
d'Aosta are set to be converted by July 2006. It is hoped that
completion of switchover in these two areas will facilitate the
development of a plan for national switchover by the end of 2006.
Estimates of when switchover could actually be completed range
from 2009 to 2012.
The UK will therefore not be a trial or test-bed
for switchover, which is already a well-understood process (Germany
has already completely switched-off commercial analogue terrestrial
television, and achieved full analogue switch-off across approximately
half of its population).
However, each of the markets switching before
the UK has high penetration of free or very cheap cable and satellite
(much of which remains analogue). The transition in these territories
is about a conversion to multichannel rather than to digital (for
example, although Germany will convert to multichannel by 2008,
it is not targeting a switch to digital until 2010).
The UK is, then, likely to be the first country
with a high degree of reliance on terrestrial television to start
digital switchover.
The Rest of Europe: Switchover by 2012?
European Union countries have agreed to try
to complete switchover by 2012—although the EU has no means
to force them to do so.
As of November 2005:
— The six countries above had indicated
they will switch over by the end of 2008.
— A further 12 countries (including
the UK) had indicated they planned to meet the European Commissions
deadline and switch over by 2012—although dates are unconfirmed
for three of them, most have not shown any plans; and several
that are "ahead" of the UK have not yet launched DTT.
— Three countries intend to switch
over after 2012.
— Four countries have no dates planned
at all.
Further detail on the status of all European
countries is given in the Appendix below.
The USA
Only 19% of US households rely on analogue terrestrial,
although many of the remainder subscribe to analogue cable, so
digital penetration remains relatively low at around 50%.
In December 2005 the Senate agreed a Bill which
proposes:
— A 7 April 2009 switch-off (they are
now looking at bringing this date forward to 17 February 2009).
— That released spectrum will be auctions
in January 2008 and proceeds (expected to be $10 billion) will
be transferred into a "Digital Transition and Public Safety"
fund.
— That fund will be used (i) to assist
consumers in purchasing equipment, (ii) to convert low power analogue
TV stations, and (iii) the facilitate emergency communications
and support coastal US regions hit by hurricanes and natural disasters.
— It has been quoted that $1.5 billion
will be set aside for the first element, to assist consumers—possibly
giving households up to two vouchers each worth $40 to buy digital
converters—but no further details of how and who might be
helped have been given.
The Bill is currently going through final amendment
before being signed by the President, and is expected to be passed
into law in late January 2006. However, switchover is a political
issue in the US, and even if the new Bill does pass into law,
it may remain difficult to implement without PSB levers and in
the face of resistant local broadcasters.
Japan
The Japanese Government announced a switchover
date of 24 July 2011 in 2002, before DTT services were launched
in 2003. At September 2005 digital television take-up was estimated
to be only 13%. All satellite is due to be converted to digital
in 2007, but there are no similar plans to convert the largely
analogue cable network.
An idiosyncrasy of Japanese switchover is that
the whole country will be switched over simultaneously. The Government
has chosen to re-arrange the analogue frequencies as digital terrestrial
is launched (itself a complex project which will require visits
to around four million homes for re-tuning), enabling DTT to be
launched on its long-term frequencies, and meaning that analogue
can simply be turned off nationwide on the desired date.
Government, broadcasters, manufacturers and
platform operators have convened a "National Conference for
the Promotion of Terrestrial Digital Broadcasting", which
in turn instructs a not-for-profit organisation responsible for
running a call centre (financed by Government), issuing leaflets,
and administering the "warning sticker" scheme for analogue
TVs. Research in March 2005 showed that although two thirds of
people had heard of switchover as a goal, less than 10% were aware
of the 2011 deadline.
3. THE UK: A
UNIQUE CASE
The UK is different to other markets in striving
for full digital switchover rather than simply terrestrial analogue
switch-off, but switchover is also much more important in the
UK than other countries. DTT coverage is limited at just 73% in
the UK, whereas many other countries can go much further: France
can reach circa 85% without switching off analogue; Spain can
reach circa 95%.
Switchover in the UK therefore brings greater
benefits: it extends the reach of digital terrestrial television
to a much larger group of households who would not otherwise be
able to receive it, and it releases significant amounts of spectrum
for other services.
The UK is also in a uniquely strong position
to achieve switchover because:
— It is starting from a much higher
digital base (penetration in Spain is only 26%; France 40%; Italy
43%) and there is real evidence of consumer pull for digital.
— It has high-quality digital channels
with significant programme investment (particularly from the public
service broadcasters) which provide a powerful incentive to viewers
going digital (Italy, by comparison, has relied on PPV football
to drive free-to-air digital take-up).
— It has a proven, successful free-to-view
digital terrestrial proposition (Spain has only just re-launched
DTT after the pay-for Quiero service was disbanded).
— It now has a free satellite proposition—and
another one on the way (free satellite has proved important in
France where Canal+ has existed since 1992).
— It has a well-managed terrestrial
transmission network which can be converted relatively easily
(France and Italy both have approximately 12,000 transmitters—more
than 10 times the number in the UK).
— It has a strong public service broadcasting
sector, which has taken responsibility for delivering switchover
(Australia and the USA are both struggling to gain traction on
switchover policies because of the weakness of PSB in those countries).
— Government and the regulator are
co-ordinated on the issue of switchover (in France the CSA can
alter switchover plans without Government approval) which has
enabled policy and licence obligations to be aligned and the single
co-ordinating body, Digital UK, to be formed.
— A central co-ordinating body, Digital
UK, exists. Enders Analysis stated that "there is no equivalent
organisation to Digital UK anywhere that encompasses the correct
levers with all parties. The UK is considered a leading light
on how to do this".
— There is appetite for switchover
amongst industry, including equipment manufacturers, retailers
and aerial installers (one glitch encountered in Berlin was the
slow response of the supply chain to provide adequate numbers
of digital boxes because they were not sufficiently prepared for
the switch).
— There is support for switchover from
consumer groups, who recognise the benefits of digital television
for both the general public and groups with particular needs who
can benefit from the improved accessibility options of digital
TV (the deaf and blind amongst them).
The challenges facing the UK market are that:
— It has relatively high dependency
on terrestrial services (only circa 5% of Germany relies on analogue).
— It has high penetration of secondary
sets and VCRs.
— TV is not automatically provided
either as part of social security benefit (as in Germany) or as
part of public or private housing rental agreements (as in France).
In recognition of the challenges facing the
UK, Digital UK has committed to let each region know about switchover
three years out from the switch-off date in order to give viewers
adequate time to plan and convert their TVs. By comparison, there
was only a 10 month run-up to switchover in Berlin (and it was
only at this point that DTT was actually launched—in the
UK, free-to-air DTT was launched in late 2002, and so will have
been around for six years by the time switchover starts). Letters
were sent to Berlin households just six months before the switchover;
in Border, the first round of letters will be sent to 30 months
ahead of switchover (the first round of letters will be delivered
in May 2006 in advance of the late 2008 switchover).
4. LESSONS LEARNED
Insights can be gleaned from both Germany (where
50% of the population has now had its analogue terrestrial transmissions
switched off) and Sweden, which switched off three regions in
"Phase 1" of its switchover strategy during 2005.
Germany, Berlin-Brandenburg
Germany's switchover began in August 2003 when
analogue terrestrial signals were switched off in Berlin-Brandenburg.
Success in Berlin accelerated switchover plans in the other Länder,
and by the end of 2005 analogue switch-off had been completed
in nine regions, representing circa 50% of the population, with
eight regions remaining to be converted by 2008.
Berlin was the first example of analogue switch-off
anywhere in the world, and has provided some useful lessons despite
some marked differences vis-a"-vis UK switchover:
— Germany has high cable and satellite
penetration, and in Berlin only circa 4% relied on analogue terrestrial
transmission.
— Germany (like most European countries)
has a far lower average number of television sets in the household
(1.3 versus the UK's 2.6).
— In Germany provision of television
services is part of the social security benefit, and so those
in social housing would by law have to be converted to digital
television by their landlords.
— Berlin provided only limited "targeted
help" with 6,000 boxes distributed to low income households,
and as prices for DTT boxes have since fallen below the
50 mark, subsequent Länder have not provided
any assistance schemes.
— Only one transmitter in Berlin was
switched off.
— DTT only launched in Berlin four
months before commercial analogue channels were switched off.
Key positive lessons included:
— The benefits of regional switchover:
by taking a regional approach to switchover, Länder by Länder
over five years, Germany has sought to minimise any potential
logistical problems with either supply of consumer equipment or
resources for conversion of the terrestrial transmission masts.
There was a noticeable blip in retail sales when the first channels
were switched off, but this proved manageable because if was confined
to the Berlin-Brandenburg area. The UK has similarly adopted a
regional roll-out of switchover.
— The benefits of a staggered channel
switch-off: Berlin chose to switch off its analogue terrestrial
channels in two stages, with the commercial channels being switchover
over first, followed the analogue terrestrial PSB channels six
months later (this period reduced to three months for subsequent
regions). This allowed viewers to check they were set up to receive
digital terrestrial transmissions before full switchover. The
UK will follow a similar model: one analogue channel will be switched
off first, followed by a grace period of approximately four weeks.
— A co-operative approach: partnership
was an essential element in Berlin's preparations, and the
broadcasters, transmission companies, manufacturers, retailers,
consumer groups and Government agencies all worked together in
a single switchover project. The "Digital Switchover Programme"
replicates this collaborative approach in the UK.
— Importance of viewer support: the
Berlin project set up a website and call centre, and provided
training for consumer organisations to handle switchover-related
enquiries. Digital UK has already established a website and call
centre, and has initiated its liaison with consumer organisations,
including providing them with "frequently answered questions"
for use on their websites and in their own call centres. Berlin
also asked the student population to volunteer with helping those
who may have problems installing and setting up digital equipment.
Digital UK has begun to explore the possibility of both incorporating
aspects of switchover into the schools' national curriculum (as
part of citizen responsibilities) and of using the student population.
— Need to raise viewer awareness: in
Berlin television adverts and a ticker during analogue programmes,
increasingly in frequency in the run-up to switchover, helped
raise awareness. However, Berlin used no off-air advertising (no
newspapers, posters). This may have been adequate in a population
where a small minority relied on terrestrial broadcasters, but
is not considered appropriate for the UK, where a much broader
campaign is being launched across multiple media.
Sweden
By the end of 2005 Sweden had completed "Phase
1" of switchover and switched off analogue terrestrial transmissions
in three areas (Gotland in September 2005, Gävle in October
2005, and Motala in November 2005), switching around 200,000 households
or 5% of the population to multichannel TV. The second stage of
Sweden's digital switchover, starting in February 2006, will convert
a further 850,000 (20%) households.
As mentioned previously, there are some significant
differences between UK and Swedish broadcasting:
— Like Germany, Sweden has high multichannel
penetration (cable 50%; satellite 17%; DTT 11%; analogue terrestrial
23%)—but relatively low digital penetration (just 38% in
August 2005) since most cable remains analogue.
— It is one of the few countries with
a successful pay DTT service (Boxer, operated by Teracom).
There have also been differences in the approach
to switchover:
— Switchover policy has been generated
and managed by Government (a "Digital TV Commission"
exists to co-ordinate roll-out and public information, but has
been appointed by, and remains tightly tied to, Government).
— In analogue, the three public service
channels reach 98% of the population, but Sweden has chosen to
extend DTT from its current coverage of 90% to 95% and rely on
satellite for coverage of the remaining 5% of households (partly
because of the greater complexity of the terrestrial network,
which comprises 2,200 transmitters).
There are also some marked similarities in approach
between Sweden and both Germany and the UK:
— Swedish switchover will roll-out
on a regional basis: there will be five phases, each lasting around
three months, and with a few regions grouped into each phase;
the process will take 2½ years in total (it began in September
2005 and will complete on 1 February 2008).
— In the first region (Gotland) all
channels were switched simultaneously, but a staggered channel
switch-off has been adopted for all further regions, where two
analogue channels will be switched off first, followed by the
remaining analogue channel two weeks later.
— Each phase has been accompanied by
a public information campaign which includes: distribution of
leaflets to each household five months in advance of switchover,
followed by a postcard reminder two to three weeks before switchover;
a website; call centre; local advertising; banner on analogue
service at relevant transmitters; information in analogue broadcasters'
on-air trails, teletext services and websites; establishment of
local communications forums; leveraging local media.
The Swedish "Phase 1" experience so
far has produced some helpful learnings:
— Content exceeded expectations:
reception and quality of digital content often exceeds viewers'
expectations.
— Re-tuning not a significant issue:
although re-tuning does complicate the process, viewers managed
well.
— Price not a significant issue:
less than 2% said price and the expense of switchover was
an issue.
— Substantial minority did not convert
until switchover but nearly all kept TV: surveys showed that
those for whom extra channels were not appealing waited till the
last minute, or even after switchover to convert (5% of households
in the first two areas had not converted seven days after the
first two channels switched off), but very few households (under
0.02% in Gotland) stopped receiving television and de-registered
from the licence fee.
— Leveraging local media important:
over 3,000 articles appeared in local media in the 12 months
leading up to switchover, largely positive, and this co-operation
was considered important. Digital UK is seeking to develop close
relationships with regional press to build the same kind of positive
momentum at a local level.
— Co-operation between parties important,
particularly at local level: local communications networks
were established, and forums attended by councils, social services,
retailers, and consumer representatives (eg senior citizen organisations);
the effort to co-ordinate local communications in this way will
be amplified in Phase 2. This experience will inform the formation
of test "Regional Advisory Councils" in the Border region.
One issue that arose in both Sweden and Germany
was the tendency of a substantial minority to wait to the last
minute to convert. In Gotland, Sweden, 20-30% of households waited
to the last few weeks to get digital. Many were those for whom
additional channels were not an attraction. The UK's stronger
multichannel content line-up, and the longer lead time for communications
should minimise this effect as far as possible, but Digital UK
will closely watch conversion in the run-up to switchover in each
region.
SOURCES
Enders Analysis: EBU & DigiTag Switchover
Research Project reports on Germany, France, Italy and UK (November
2005).
Das Uberfall Fernsehen: "Berlin Goes Digital:
The switchover of terrestrial television from analogue to digital
transmission in Berlin-Brandenburg, Experience and Perspectives".
MABB (Media Authority for Berlin-Brandenburg).
Digital TV Overgangen (Sweden).
Oxford Programme in Comparative Media Law and
Policy: Overview of the Analogue Switchover Policy in Europe,
the United States and Japan (December 2005).
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