Strategic Priorities for FY2009 Business Plan
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MCH Regulatory Review TVNZ Submission April 2008 Contents • PART 1: Executive Summary 2 • PART 2: Terminology 7 • PART 3: Context – Value of Public Service Broadcasting 10 – The Need for Marketplace Rules 24 • PART 4: Regulatory Review – Approach 36 – Environment 38 – Cross-Value Chain Issues 43 – Content Issues 51 – Distribution Issues 58 – Network Issues 65 TVNZ Submission: MCH Regulatory Review April 2008 2 Executive Summary • Public service broadcasting is important in order to ensure: the continued visibility and impact of local and public service content; plurality of voices in the media; and independence in an increasingly globalised world. TVNZ has a specific role to play as the Public Service Broadcaster to deliver Charter content and bring New Zealand to New Zealanders • New Zealanders value the principles of public service broadcasting as set out in TVNZ’s Charter. However, public service broadcasting in New Zealand does not receive stable, long-term funding • New Zealand has paid little attention to the broadcasting and media competitive environment. The lack of marketplace rules is not working for the existing broadcasting market, let alone converging markets • The lack of marketplace rules means that SKY has had the freedom to develop a business model in New Zealand not seen in other countries. SKY has been able to develop a vertically integrated business with the potential to exert considerable market power. That lack of marketplace rules and dominance by one player could lead to a lack of media diversity in New Zealand • Significant change is required across a number of areas identified by MCH. Marketplace rules are required in order to create a fair and level playing field for all participants. Marketplace rules are also a necessity if New Zealand is to create and sustain a diverse and effective media market, and optimise public good TVNZ Submission: MCH Regulatory Review April 2008 3 There is a need for marketplace rules across a number of areas Barometer: Need for Marketplace Rules Status Quo Update Restructure Reform Restructure & Introduce specific Consistent & refresh in line with measures to counter up-to-date market changes specific threats CROSS VALUE CHAIN Regulatory Model Role of Regulator Relationship w ith ComCom Cross-Media Ownership Media Literacy CONTENT Standards Local Content Role of Public Service Broadcasting Advertising DISTRIBUTION Access for Disadvantaged Premium Content Consumer Understanding Rights to Orphan Works NETWORK Open Access Regime Technology Standards Post-ASO Spectrum Allocation Investment in Digital TVNZ Submission: MCH Regulatory Review April 2008 4 TVNZ’s Position Issues TVNZ Position CROSS-VALUE CHAIN ISSUES Regulatory Model • Irrespective of which regulatory model is chosen for the future, existing marketplace rules are inadequate and diversity is threatened Role of Regulator • Agreeing the rules required to promote diversity in today’s market is more important than determining the specific role of a future Converged or Single Regulator Relationships with ComCom • The Industry Regulator should focus on managing and monitoring diversity, and the Commerce Commission should focus on competition issues Cross-Media Ownership • Rules need to reflect a better understanding of today’s broadcasting and media markets, not just broadcasting-like and converging markets Media Literacy • Agreeing to the scope of media literacy and committing funding to media literacy should precede determining the delivery agency CONTENT ISSUES Standards • Refer TVNZ Submission: Future of Content Regulation Local Content • Funding needs to increase and be more predictable. A well-resourced converged funding body is desirable as New Zealand faces a number of challenges in sustaining the viability, availability and accessibility of local content. Funding for TVNZ’s delivery of the Charter should be ring-fenced, as should funding for Maori and other minority programming Role of Public Service Broadcasting • Public Service Broadcasting should be strengthened and funding should be focused on Public Service Broadcasters operating under a Charter. Core PSB channels should be available to New Zealanders on their preferred digital platform, provided that the Public Service Broadcaster is not disadvantaged Advertising • The industry should be regulated TVNZ Submission: MCH Regulatory Review April 2008 5 TVNZ’s Position cont’d Issues TVNZ Position DISTRIBUTION ISSUES Access for the Disadvantaged • Public funding of captioning should increase and public funding of audio-described television should be introduced in order to improve access for disadvantaged viewers Premium Content • The current structure of the broadcasting market in New Zealand means that anti- competitive behaviour is a growing reality and needs to be remedied through marketplace rules Consumer Understanding • The Government needs to invest in Media Literacy so that consumers understand copyright. Similarly, investment in Media Literacy will help promote internet safety Rights to Orphan Works • Unlocking orphan works is important to “public good”. The industry should play an active role in agreeing the approach to orphan works NETWORK ISSUES Open Access Regime • Universal access would be best achieved through operational separation of the infrastructure operator and the service provider Technology Standards • Network interoperability is desirable but faces technical challenges Post-ASO Spectrum Allocation • Protecting sufficient spectrum for current and future needs of broadcasting is critically important Investment in Digital • The lack of access to broadband is the key constraint on New Zealand’s ability to participate fully in a digital world TVNZ Submission: MCH Regulatory Review April 2008 6 Contents • PART 1: Executive Summary 2 • PART 2: Terminology 7 • PART 3: Context – Value of Public Service Broadcasting 10 – The Need for Marketplace Rules 24 • PART 4: Regulatory Review – Approach 36 – Environment 38 – Cross-Value Chain Issues 43 – Content Issues 51 – Distribution Issues 58 – Network Issues 65 TVNZ Submission: MCH Regulatory Review April 2008 7 MCH has adopted the following value chain, but also uses many other terms Components of Examples of other terms employed Broadcast Value Definition by MCH Chain “Broadcasting-like” digital audio • Services visual and audio material capable • Content producers Content of being delivered to the user by • Content rights electronic means The process by which content is • Content distributors purchased, aggregated, packaged • Broadcasters and released for delivery to the • Service providers Distribution end user • Content providers • Aggregators The means by which content • Platform operators reaches its audience, • Platform providers encompassing broadcasting • Network operators Networks transmission networks, wireline and wireless telephony and data • Infrastructure networks • Digital gateways TVNZ Submission: MCH Regulatory Review April 2008 8 TVNZ has de-constructed the value chain to clarify the way the market works and help identify threats to diversity Stage Description Examples Content Produce multimedia content for Television studios; radio studios; music studios; Hollywood Originators each of the main distribution studios; Web publishers; news agencies such as Reuters; methods newspaper publishers; individuals Content and Package content into bundles or Television broadcasters; major pay channels (e.g. CNN, Service brands (often called “channels”) HBO, Rialto, Eurosport); radio broadcasters such as Packagers to be delivered to consumers RadioWorks; ISPs; newspaper publishers such as Fairfax and APN; telcos Service Translate content into a form that FTA television providers; satellite television providers; cable Providers can be decoded by Consumer television providers; ISPs such as Xtra; radio broadcasters; Premises Equipment (CPE) telcos Customer Manage individual customer Satellite television providers; telcos such as Telecom and Relationship relationships, including pay-per- Vodafone; ISPs Managers view; personalised interactivity; (CRMs) and customer accounting Infrastructure Communicate to and from “Backbone” platform providers such as Kordia; satellite Operators service providers, at both television broadcasters; cable television networks; telcos wholesale and retail level such as Telecom; electricity lines companies such as Vector Consumer Provide customer-site equipment Set-top boxes (STBs); satellite receiving equipment; Premises that translates signals into televisions; computers; modems; radios; mobile telephones Equipment audio/video signals, controls (CPE) Providers access and permits interactivity Source: OECD 1999 (modified) TVNZ Submission: MCH Regulatory Review April 2008 9 Contents • PART 1: Executive Summary 2 • PART 2: Terminology 7 • PART 3: Context – Value of Public Service Broadcasting 10 – The Need for Marketplace Rules 24 • PART 4: Regulatory Review – Approach 36 – Environment 38 – Cross-Value Chain Issues 43 – Content Issues 51 – Distribution Issues 58 – Network Issues 65 TVNZ Submission: MCH Regulatory Review April 2008 10 Public service broadcasting is important, but receives little public funding in New Zealand • New Zealanders value Public Service Broadcasting (PSB) – TVNZ continues to be the best way to reach the majority of New Zealanders, despite fragmentation of broadcasting – TVNZ demonstrates one of the highest audience share ratings of PSBs anywhere, even though New Zealand is an intensely competitive market • New Zealanders value local content –