New Zealand has had digital TV for around seven and a half years, so the government’s announcement of what it is doing to bring digital TV to the public is somewhat laughable. It needn’t have done anything besides sell the radio spectrum necessary for digital terrestrial TV to be an option. However, Steve Maharey’s well publicised announcement shows that this isn’t about broadcasters doing something they think viewers are willing to pay for – it is something government thinks is good for you.
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You see, Sky TV introduced digital TV at the end of 1998, and it has been a stunning success. In the past year, Telstra Clear converted its cable TV network in Wellington, Christchurch and Kapiti to digital. Combining them both, all in all, just over 40% of New Zealand households now have digital TV - the difference is, they pay for it.
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Why do they pay for it? Because it is digital? Because of picture quality? Do they bollocks! The only reason most choose digital is because of the range of channels. When Sky launched its digital satellite service it was because it could increase the number of channels it broadcast from 5 on UHF analogue to over a hundred. Digital allows far more efficient use of radio spectrum. Telstra Clear has gone to digital partly for the same reason, it can fit far more channels using less capacity on the cable. Digital interactivity is nice and can generate some revenue with pay per view events, but it is really peripheral compared to choice. People, by and large, don’t give a damn about slightly better pictures or sound – look at the iPod revolution. That is about convenience and choice, not quality of sound, just like cassettes were.
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So the terrestrial free to air broadcasters have caught up. A consortium of TVNZ, Canwest, Maori TV, Trackside and Radio New Zealand are launching it next year – but there is a catch. It’s not commercially driven – it is not because you want it and are willing to pay for it – it is because THEY want it and it is being directly, and indirectly subsidised. Directly because the government is putting $25 million into this new TV platform – whereas Sky TV actually made the government money by paying for the spectrum it uses. Indirectly, because TVNZ will pay less dividends and you can be sure Maori TV and Radio NZ are paying for their “broadcaster’s contribution” from taxpayer funding, since neither make a profit before subsidies. Trackside and Canwest do, but are no doubt thrilled to be riding on the back of the state in delivering a digital TV platform. Notably absent is Prime TV, which is likely to dedicate itself to Sky’s satellite platform over time. Note also that while Sky had to pay to use its spectrum, these broadcasters will get their spectrum for free – great that!
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You see, Sky TV introduced digital TV at the end of 1998, and it has been a stunning success. In the past year, Telstra Clear converted its cable TV network in Wellington, Christchurch and Kapiti to digital. Combining them both, all in all, just over 40% of New Zealand households now have digital TV - the difference is, they pay for it.
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Why do they pay for it? Because it is digital? Because of picture quality? Do they bollocks! The only reason most choose digital is because of the range of channels. When Sky launched its digital satellite service it was because it could increase the number of channels it broadcast from 5 on UHF analogue to over a hundred. Digital allows far more efficient use of radio spectrum. Telstra Clear has gone to digital partly for the same reason, it can fit far more channels using less capacity on the cable. Digital interactivity is nice and can generate some revenue with pay per view events, but it is really peripheral compared to choice. People, by and large, don’t give a damn about slightly better pictures or sound – look at the iPod revolution. That is about convenience and choice, not quality of sound, just like cassettes were.
.
So the terrestrial free to air broadcasters have caught up. A consortium of TVNZ, Canwest, Maori TV, Trackside and Radio New Zealand are launching it next year – but there is a catch. It’s not commercially driven – it is not because you want it and are willing to pay for it – it is because THEY want it and it is being directly, and indirectly subsidised. Directly because the government is putting $25 million into this new TV platform – whereas Sky TV actually made the government money by paying for the spectrum it uses. Indirectly, because TVNZ will pay less dividends and you can be sure Maori TV and Radio NZ are paying for their “broadcaster’s contribution” from taxpayer funding, since neither make a profit before subsidies. Trackside and Canwest do, but are no doubt thrilled to be riding on the back of the state in delivering a digital TV platform. Notably absent is Prime TV, which is likely to dedicate itself to Sky’s satellite platform over time. Note also that while Sky had to pay to use its spectrum, these broadcasters will get their spectrum for free – great that!
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According to the government, a failure to move to free-to-air digital would put the future viability of public broadcasting television, and other free-to-air services, at risk. What nonsense - public broadcasting television isn't viable anyway - it is subsidised, and why should the government care if private broadcasters don't do what they need to be viable? As long as spectrum is available then Canwest and others can get together and figure out what to do.
A cost benefit study concluded that without a full transition to free-to-air digital TV (as a viable alternative to Pay TV digital), the net cost to the country could be as high as $156 million - I'll be looking at THAT in the next week.
Without a transition to digital, the free-to-air broadcasters’ audience share could also fall from 80 to 50 per cent, or even lower, if digital pay TV options grow at an accelerated rate. This would mean fewer options available on free-to-air. So free to air broadcasters could lose audience, so why not let THEM invest in digital to compete - why skew the field?
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Now I agree that a shift to digital TV is inevitable. It is well apace in the UK, with a majority of households now watching digital TV of one kind or another (including a freeview platform similar to what is proposed in New Zealand). I also agree that it could generate savings for broadcasters and a major increase in choice – but this is something that should be driven from demand – like the internet, mobile phones and Sky TV – not by the government anticipating it.
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It will mean that all TV sets currently on sale and in use in New Zealand will NOT be able to receive TV signals once analogue TV is switched off in 6-10 years – without either a freeview box, or a Sky or Telstra Clear box. So you’ll need to buy a set top box that will cost something between $60 and $220 depending on how sophisticated a unit you have (I bought a £70 one here in the UK which is good quality). So why would you want this?
A cost benefit study concluded that without a full transition to free-to-air digital TV (as a viable alternative to Pay TV digital), the net cost to the country could be as high as $156 million - I'll be looking at THAT in the next week.
Without a transition to digital, the free-to-air broadcasters’ audience share could also fall from 80 to 50 per cent, or even lower, if digital pay TV options grow at an accelerated rate. This would mean fewer options available on free-to-air. So free to air broadcasters could lose audience, so why not let THEM invest in digital to compete - why skew the field?
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Now I agree that a shift to digital TV is inevitable. It is well apace in the UK, with a majority of households now watching digital TV of one kind or another (including a freeview platform similar to what is proposed in New Zealand). I also agree that it could generate savings for broadcasters and a major increase in choice – but this is something that should be driven from demand – like the internet, mobile phones and Sky TV – not by the government anticipating it.
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It will mean that all TV sets currently on sale and in use in New Zealand will NOT be able to receive TV signals once analogue TV is switched off in 6-10 years – without either a freeview box, or a Sky or Telstra Clear box. So you’ll need to buy a set top box that will cost something between $60 and $220 depending on how sophisticated a unit you have (I bought a £70 one here in the UK which is good quality). So why would you want this?
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In the UK it increased the mainstream channels I could watch from 5 to 12, plus 2 news channels, 2 music channels, 3 childrens' channels and a host of damned silly specialist shopping, quiz and other channels. Plus for $24 a month I could pay to subscribe to another 10 channels - it is a pay TV platform competing with Sky and cable. So in the UK, it is worthwhile - it is so successful that now more people have digital than analogue TV. The picture is of the set top box that I have - nothing flash.
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Unless the NZ broadcasters can offer a compelling set of channels for viewers that they WANT to watch, freeview will be a bit of a flop in NZ – meanwhile by then, maybe 45% of New Zealand households wont care, since they already have digital TV – and not a dollar of taxpayers’ money went into it! 18 new channels are promised - they better be what people want (sport, gossip, music, comedy and some T&A late at night). Oh by the way, 10 main centres will be covered - 10! So Auckland, Waikato, Tauranga, Wellington, Christchurch, Dunedin, Manawatu, Southland, Hawke's Bay and Taranaki? OR Nelson, OR Rotorua? So that means a satellite dish for the rest of you.
