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DTT needed for PSB obligations

January 20, 2014 00.01 Europe/London By Julian Clover

arqiva-croydonThe delivery of commercial public service broadcasting in the UK is directly linked to the availability and use of spectrum, and as such must be taken into account in calibrating the level of PSB obligations the channels must support, says a new report delivered for Digital UK.

The value of Digital Terrestrial Television in an era of increasing demand for spectrum, prepared for the body that oversees the UK terrestrial platform by Communications Chambers (Rob Kenny, Robin Foster and Tim Suter) says that provided spectrum is continued to be made available, DTT, boosted by new HD channels and with the support of YouView backers TalkTalk and BT will continue to thrive.

The report says DTT provides nearly £80bn to the UK – significantly more than previously estimated – and supports 15,000 jobs in broadcasting and independent production. It also estimates  that the average value per MHz of spectrum for DTT is 50% higher than that for mobile data and that the marginal value (the unit value that might realistically be reallocated between DTT and mobile) may be even greater.  The report estimates the marginal value of mobile data per MHz of spectrum to be £0.19bn compared to £0.47bn for DTT.

“Developments in the market are unlikely to undermine DTT’s prospects – for the foreseeable future, there are no effective substitutes. IPTV, sometimes suggested as a replacement, is at best a long-term prospect: fixed broadband adoption in 2030 is only projected to be 87%; and even for those DTT households with broadband (currently only 60%) there are significant market and technical challenges to be overcome, including traffic charges, broadband quality, adoption of IPTV-capable equipment and rights issues,” says the report.

It goes on to suggest that in a world without DTT, Freesat would fail to match its larger satellite competitor Sky – with a marketing budget of £1.1bn compared to Freesat’s total operating expenditure of £12m – and its PSB owners would be constrained from giving it preferential treatment.

“Sky in particular would have both the incentive and the ability to attract former DTT viewers to its satellite platform. It would most likely mount a concerted campaign to attract new subscribers, and would have significant advantages over Freesat in doing so, including: far greater promotional power,” say the authors.

But there are some positives for the rival platforms within the pay sector. “Competition between platforms drives innovation in service delivery in premium pay services, which need to stay a step ahead of the DTT free platform in order to justify their price premium. By this mechanism DTT delivers value not just to its own customers, but to all UK TV consumers.”

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Filed Under: Newsline, Platforms, Terrestrial Edited: 20 January 2014 11:05

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About Julian Clover

Julian Clover is a Media and Technology journalist based in Cambridge, UK. He works in online and printed media. Julian is also a voice on local radio. You can talk to Julian on Twitter @julianclover, on Facebook or by email at jclover@broadbandtvnews.com.

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