Digitisation 2010

Broadcasting gearing up for the internet

the changing face of structures and actors

Digitisation 2010

Broadcasting gearing up for the internet the changing face of structures and actors published by Kommission für Zulassung und Aufsicht (ZAK) der Landesmedienanstalten Commission on Licensing and Supervision (ZAK) of the German media authorities

Preface 5

Thomas Langheinrich Chairman of the Commission on Dr. Hans Hege Licensing and Supervision (ZAK) ZAK Representative for platform of the German media authorities regulation and digital access

The sixth digitisation report of the media authorities provides on the initiative of the media authorities. Over the next few evidence of the positive development digitisation is taking in months, the ”klardigital 2012“ initiative will inform the satel- Germany. Since 2005, the number of digital TV households lite households affected and will provide advice to the special- has trebled and now stands at 23 million, allowing digital ac- ist trade, craftsmen, the housing industry and cable network cess to the media in 61 per cent of all homes. Even cable operators, thus accompanying switchover. This impulse could which has been the problem child of distribution platforms lend momentum to the digitisation of cable. during this period is now beginning to speed up digitisa- The data collected by TNS Infratest during the period tion, and DSL-TV is also gaining ground, even if penetration May – June also point to developments presenting new chal- is still at a low level. HDTV is a definite driver for digiti- lenges for users, distributers, platforms, the receiver industry sation: the rising number of offers is good reason for users and, not least, content providers. The market has undoubtedly to switch to digital reception, especially since they can now become more dynamic, competition has grown considerably see the benefits with their own eyes. The new flat screens and open and closed systems vie for market shares, click rates with integrated receivers also pave the way for digitisation as and paying customers. Behind the scenes, sustainable business services and features can now be easily accessed with a sin- models for the time after the heyday of traditional TV adver- gle remote control, making TV consumption child’s play for tising, necessitating new addressable services to compensate even the technically most ignorant viewers. In addition, new any loss in revenue, have been looked at for a long time. The promising developments will soon make internet applications direct connection to the customer will become absolutely es- visible on the TV screen in a user-friendly way thanks to the sential; for this reason, platforms, network operators and the new HbbTV standard. Consumers can therefore now more receiver industry are currently all defining their respective and more appreciate the added value digitisation has to offer, claims. As a consequence, technical progress regarding digiti- which thus loses the blemish of only providing countless new sation is increasingly slowed down since the new options and offers. And convincing arguments for digitisation are needed technical choices are not necessarily welcomed by all players. as more than 14 million German households are still firmly locked in the analogue world. The digitisation report shows up all these developments; it provides not just the relevant facts and figures but also offers In this respect it was an important step that ARD, RTL expert analyses and opinions, raises the right issues and points Deutschland group, ProSiebenSat.1 and ZDF agreed on the to potential developments in the digital world. switch-off of analogue satellite transmission in Germany together with the commercial broadcasters’ association, VPRT,

Content 7 Content

Broadcasting gearing up for the internet the changing face of structures and actors...... 3

Platforms 2.0: Broadcasting platform meets internet platform ...... 13 Dr. Hans Hege Traditional broadcasting platforms: can they get away from the transport model?...... 14 Internet platforms...... 16 Open worlds – closed worlds...... 18 Effects on the broadcasting world...... 20 Infrastructure providers and platforms...... 21 Challenges for regulation...... 22 Securing basic access to television and the internet ...... 22 Specific rules for broadcasting platforms ...... 23 Selection through internet platforms...... 24 Provisions concerning vertical integration...... 24 Data protection and copyright – the key funding issue...... 25 Uniform regulation – is the protection of minors an appropriate example?...... 25

Digitisation of the German television market: Facts and figures Current state of digitisation in German TV households, June 2010...... 28 Andreas Hamann Continuous increase in digital households...... 28 Slight shift in the shares of transmission routes...... 28 Upwards trend of digital continues...... 29 Satellite to switch over in 2012 ...... 30 Cable continually on the road to digital ...... 32 Rate of digitisation on the up with the number of sets ...... 33 Terrestrial reception stable...... 34 TV reception on the PC and the laptop on the up ...... 34

Watching TV online: reach and acceptance of web TV ...... 36 Johannes Kors Types of offer and developments ...... 36 IP-TV ...... 36 Web-TV ...... 36 Audience reach and acceptance of IP-TV and web TV...... 38 Hybrid-TV...... 42 8 Content

Digitisation in Europe on the move...... 44 Mario Hubert

Methodology...... 48 Defining cable and satellite reception...... 48 Establishing transmission platforms and transmission technologies ...... 48

Regulating platforms and securing digital access: the remit of the regulatory authorities ...... 51 Regulating platforms...... 51 Digital access ...... 52 Analogue-digital switchover...... 52 Tools of regulation and convergence of the media...... 52

The authors ...... 53

Glossary...... 54

Imprint ...... 58

11 Broadcasting gearing up for the internet the changing face of structures and actors

13 Platforms 2.0: Broadcasting platform meets internet platform

Dr. Hans Hege

Two terms or concepts currently dominate the Will the network operators put particular efforts Net neutrality in doubt debate: platforms and net neutrality. Apple, Google into promoting those uses of the internet which due to new platform developments and Facebook make good ground as regards me- earn them the lion share of their income, and thus dia consumption. The extension of broadband cause constraints for others? Do broadband infra- provides the basis for distributing audiovisual me- structure operators have to be permitted some- dia in the internet while offering new options of thing which was granted to broadcasting platforms collecting and utilizing user data. According to by the legislator a long time ago: the decision on estimates by experts, the available capacities will the use of the capacity they have built up includ- increase ten-fold by 2014; by then, 90 per cent of ing the selection of media content, but exclusive the capacities will be used up by video consump- of minimum obligations for the benefit of public- tion in the internet. This raises a lot of questions: service channels and regional services? Asked in Who will pay for this? Who will gain control of reverse: Can trade privileges of network operators the particularly attractive content which will con- be put into question, e.g. that users cannot choose tinue to be in scarce supply in the future? Who the cable network operator providing the majority will control the receivers? Who will obtain data on of TV services they want to watch but have to ac- user behaviour which form the basis for financing cept the provider selected by the landlord, or that and expanding services? Will the internet be pre- users have no influence on what channels they served in what represents its open character so far receive which is basically the opposite of what – the enigmatic catchword being ”net neutrality“, would ideally constitute and is demanded as net i.e. the possibility of the direct and uncontrolled neutrality? connection between content providers and their This article aims at outlining and comparing de- users, but also among users exchanging videos and velopments of traditional platforms in the world of music? The term ”net neutrality“ comprises many broadcasting and the new platform world in the issues, and the solutions to them are almost always internet. Answers found to questions in this context linked to platforms which operate networks, con- will be outnumbered by questions remaining unan- trol receivers, aggregate content, assist with navi- swered. The article would like to contribute to the gation and collect data for funding activities. contexts being better understood, thus providing a first basis for solving the question which public interests command which form of regulation. 14 Broadcasting gearing up for the internet

Traditional broadcasting platforms: can they Satellite copied the cable transport model and get away from the transport model? also reaches a large audience; marketing does not, Broadcasting platforms serve for transporting and however, take place. Satellite could attain its large – where possible – marketing television in closed audience share because, unlike in almost all other networks. The operators decide on the content to countries, no payment is charged for programme be distributed; in so doing, they have to pay re- reception. In Germany, households invest in a sat- gard to some minimum provisions. Even in dig- ellite receiver, but do not have to pay any monthly ital networks, capacities are limited. Unlike in the fees in return. This corresponds to the old – and, analogue world, however, this no longer results in following switchover, also the new – model of ter- scarcity of capacities as the key criterion is financ- restrial television transmission. The cable operators ing attractive content. Network operators need generate the biggest share of their income from attractive content in the same way in which tel- the households connected to their networks, but evision providers need audience reach for funding still manage to remain competitive as the cost re- their services. The four major television groups in mains far below that incurred in other countries Germany cover more than 90 per cent of con- since the cable fee is charged with the rent and a sumption – a very straightforward situation com- large number of households is connected to ca- pared to broadband internet. ble networks. There has been little change in the Platforms on broadcasting networks can also be shares of the various broadcasting transmission operated without the network. The most impor- platforms. Terrestrial transmission could reverse its tant example in this respect is built on exclusive downward trend thanks to the switchover to dig- content: sport and films offered by Sky Deutsch- ital transmission, but still lags far behind cable and land. But economic constraints would make co- satellite reception. The early days of operations with the network operators stand to The large audience reach achieved through this broadcasting live on reason. transport model offered some consolation to con- Taking the time spent consuming media and the tent providers which – unlike in Anglo-Saxon impact on the formation of public opinion as cri- countries – do not receive any income from cable and satellite platform providers but rather have to Broadcasting platforms teria, broadcasting platforms still have a consider- dominate the formation of able head start over internet platforms (which are pay for their content being distributed via cable opinion after all used to a small extent only for accessing and satellite. Neither terrestrial nor satellite used audiovisual media and in which the new forms the opportunity offered in the context of the tran- of communication do not reach the influence of sition to digital technology to introduce a new television). funding model. Subsequent attempts to establish a marketing platform by introducing basic encryp- The influence of broadcasting platforms contin- tion for commercial free-TV services transmitted ues to be limited by the persisting dominance of in SD quality failed for satellite transmission and the transport model under which a large range of are no longer pursued. services is available free-to-air at a standard rate. HD Plus offers a new chance for introducing a new HD to get away from The cable network which underpins this transport the transport model? model was constructed and financed as a public business model with the new high-definition tech- monopoly during the 1980s and was boosted not nology; however, consumers will not have to pay only by subsidies from other areas, but also by the extra to start with. It remains to be seen whether fact that the cable fee is charged together with the this approach will work. The same applies to the rent. development of cable distribution. The question is whether the model of basic encryption can work 15 for cable transmission even though it failed in all • Electronic programme guides and navigation other broadcasting platforms. Or will a change of systems are still in their fledgling stages both the system also be delayed until HD is introduced regarding receiver hardware and data used. for cable transmission? The facts and figures of the Digital storage facilities have been improved con- digitisation report show that a lot of ground still siderably in the latest receiver models and prices has to be covered before analogue transmission is will go down even further. This poses a threat for given up, one reason being basic encryption. the income of commercial broadcasting which In the course of digitisation, network structures are responds by attempting to thwart recording and devised in a more centralised fashion than was the skipping advertising systems. case for analogue cable; this causes problems for The connection of internet and broadband for me- regional and local content providers. Their inter- dia usage is also still in its infancy even regarding ests are in the focus of media legislation on access cable which would offer both technical options as control; it must step in where telecommunications a route of transmission. The cable providers have regulation and marketing fail. The chances of small started offering time-shift television (”catch-up Safeguarding opportuni- providers lacking the negotiating clout of the ma- ties for regional and local TV“) and video-on-demand for TV screens only as providers jor broadcasting groups deserve particular consid- a reaction to the growing competition of IP-TV. eration. The traditional broadcasting platform model is also Due to their key function regarding access of con- shaping the IP-TV platform set up by Deutsche tent providers, broadcasting platforms are also care- Telekom. Telekom banks on a comparable offer in fully looked at by the Federal Cartel Office which a closed network, offering similar quality and seeks also pays great attention to the commercial broad- to stand out with addition options as the internet casting groups which are considering a departure does. In contrast to the broadcasting platforms, IP- from the pure transport model in order to open up TV consumption generates data on individual use; new sources of income. The German legal provi- Broadcasting platforms how they are collected and used, cannot be assessed under pressure sions for open interfaces which are based on Eu- at present. Similar to all other network-based te- ropean law have been complemented by require- lephony providers, Deutsche Telekom also tries to ments of the cartel authorities aiming in particular get as large a piece of the TV and video consump- at ensuring access for other providers in new mar- tion cake as possible to compensate the downturn keting models by means of open interfaces such as IP-TV initially adopts trend of the classical revenues generated in the ar- the broadcasting model obligatory CI Plus. eas of telephony and data transmission. Broadcasting platforms have to get by without Triple play packages comprising television, internet some key options available to internet platforms and telephony will be extended by mobile uses in for exerting influence: the future; this field is hotly contested by both ca- • There is no consumer relationship with satel- ble and telephony providers. The future will show lite and DTT audiences, let alone any infor- whether the large cost incurred for upgrading net- mation on individual TV consumption. works will pay for funding several networks and • As a result of the various network levels, the will thus bring about a range of providers to chose relationships in the cable networks are spread from, including the question whether users will in across many companies. The existing return future still need and have to pay for two networks channel does not provide any opportunity for at home which come from totally different worlds communication which could match that of- but will soon offer identical functions. fered by the internet. 16 Broadcasting gearing up for the internet

For the network operators coming from the te- for DTT. As regards the development of terrestrial lephony sector, the greatest challenge will be the transmission, a further weakness results from the fact that especially in Germany, consumers pay separation of the broadcasting network operation very little for the most data-consuming service, from internet-based networks. One could compare i.e. television while telephony will disappear as a this to a newspaper or a television provider today stand-alone service because of the low data rates banking only on the printed version or the clas- required even though it provided the main income sical broadcasting service. A responsible approach for many years in the past. to public infrastructures would have to grab all opportunities offered by convergence rather than Regulation based on The Interstate Broadcasting Treaty introduced platform neutrality platform-neutral regulation; nevertheless, many is- destroy them. The fact that the development was sues still await a solution. They relate to questions left completely to the market and the short-term that largely go beyond the key area of media regu- interests of Deutsche Telekom is now backfiring. lation. As regards IP-TV, proprietary technologies Will there be a future for a terrestrial broadcast- are introduced while for cable and satellite, open ing platform alongside the mobile radio platforms technologies are called for. Vice-versa, however, IP- which will focus their efforts even more on the TV as a closed world has to cope with the pres- distribution of video and audio content in the next sure of the open internet which can be accessed generation and managed to acquire spectrum at a via any broadband modem; the broadcasting world very low price during the latest frequency auction- has not yet arrived in a world that is open to a ing process? Public-service broadcasting will have similar degree. to find an answer to the question whether it can Attempts at setting up platforms for mobile con- and will afford to spend considerable amounts of sumption distributing TV services to comple- licence-fee money on HD transmission for a small ment platforms for stationary reception have thus number of viewers. As was the case for terrestrial far been a limited success at best. The iPhone has analogue-digital switchover, the commercial pro- popularised video use via the internet. The rel- viders will again have a key role since a system of- evance of streamed TV channels still lags far be- fering public-service broadcasting only will mul- hind streaming radio. For using broadcasting tech- tiply the costs per household for public-service nologies such as DVB-H and DAB for streaming broadcasting as well. The commercial providers content, the question how to fund the necessary would like to give up the transport model, but is it transmitter networks forms a key challenge which not precisely this model which ensures the attrac- is as yet unsolved. tion of DTT? As long as the development of the digital satellite is undecided, there is going to be Terrestrial platforms It is obvious that it is particularly difficult to develop little progress as regards HD even if the technology without content marketing? platforms and networks for content for which no will be available shortly. new business models for funding exist but which exclusively have to resort to advertising and licence fee revenue, such as digital radio. What keeps being Internet platforms overlooked again and again is that the success of HD technology is based on broadband internet analogue-digital switchover of terrestrial television which brought about a large number of innova- was also due to the fact that in the case of DTT, tions: It combines traditional telecommunications attractive content was available which was funded services with the possibility of using audiovisual through cable and satellite distribution. There is media; the social networking sites generate new no comparable added value for digital radio, nor forms of communication. The relevance for me- for introducing a more efficient encoding standard dia consumption is increasing through a three-fold 17 expansion: the share of households reached via The distribution of selected classical TV services broadband, the increasing bandwidths, and the re- in the open internet by Zattoo thus far remains a ceivers allowing broadband use. The classical desk- niche system. It allows television to be watched on top PCs and notebooks now have to give up room the laptop even in areas where DTT is not avail- to netbooks and tablet PCs; with the iPhone and able. The platform does not require any special the iPad, Apple has established a new yardstick as regulation, especially since most providers offer regards comfortable and mobile broadband use. their services themselves as streamed content.

For television consumption, this continues to Internet platforms show their best performance by Broadband internet present a complement rather than a substitute: the building on the strengths which makes broadband generating new platforms largest amount of time is spent watching TV on the internet superior to traditional forms of commu- large screen at home, and the periods during which nication as a basic infrastructure for communica- consumers want to relax. Unlike with printed me- tion and media consumption. dia, the internet has not made any noticeable inroad Universal broadband access allows the consump- into TV consumption so far. tion of content and other uses at any time in any First attempts at bringing the internet onto the large place. This is combined with the option of interac- television screen met with little acceptance. Hybrid tion not only between providers and users, but also receivers including an internet connection along- among users (e.g. file sharing which is not without side TV reception are now to offer solutions which problems for media businesses). Moving about in are more user-friendly: simple navigation centering the internet leaves traces which can be combined on the time-shift use of media libraries, video-on- to establish profiles for advertising strategies or for demand and the use of selected video content on search engines. Television and video content can offer in the internet. The entertainment industry be embedded in social networking sites as well as In search of user-friendly is making its mark with a number of solutions of- in many other uses of the internet. solutions: internet on the TV screen fering content available in the internet, mostly in The strengths of the internet can be demonstrated closed systems presenting a selection made by the by a look at the three ”major“ platforms: provider. This can present a problem, but at the current stage of development, competition for the op- Apple (iTunes) started with a receiver-specific Apple (iTunes) – successful content marketing timum solution should not be obstructed. With the platform for marketing music. Today, Apple is open internet being available via different receivers, a platform for editorial content based on print sufficient pressure will develop for the systems to be products as well as for TV content and varied ap- opened up. plications using the options of mobile communication. Led by the TV providers, the internet is to be brought onto the TV screen with an open stand- Apple brings TV and video content onto the tel- ard (HbbTV) while the independence of the con- evision screen but has not made any inroad yet as tent providers as regards devising their services is far as current TV services are concerned. retained. After useless attempts over several decades, Apple does not hold a unique position as the sole this could bring about a better version of the old- content provider in any area: music and videos can est data transmission route, namely teletext onto the be found on other platforms as well while apps TV set. Experiences gathered with the multimedia can also be developed for different sets. home platform standard as well as the on-going de- Apple (iTunes) is a challenge for platforms which bate about interactive television are proof of the fact are operated by individual media companies. Does how difficult it is to develop truly attractive uses. it really pay to provide platforms focussing on 18 Broadcasting gearing up for the internet

specific content such as video and film, music or Facebook is the latest player planning to use its editorial content produced by publishing houses? network for earning money by exploiting data What benefits can mergers of media companies on media consumption. Recommendations have bring, and which aspects deserve analysis as far as always been a motive for watching TV; social net- competition issues are concerned? Who controls working sites will supply recommendations in a Facebook banks on the customer data and what share of the revenues professional manner. Facebook banks on the net- the network effect will the platform receive? work effect: For more and more users it is turning into their internet platform no. 1. Media compa- For Google, TV consumption is a natural area for expansion. Alongside the YouTube video platform nies use Facebook for marketing their products, but it appears obvious that Facebook might want Google forces internet and video search, navigating on the TV set is an- navigation into television other possibility of gathering data which can then to generate advertising income through media be commercially exploited. Google TV has already consumption. been announced. Will it grow into a competitor These three ”big“ players pursue different ap- for today‘s EPGs and audience flow of the TV proaches: Apple builds on hardware including pro- providers? Will Google manage to do away with prietary technology while Google supports open the current control of the TV screen exerted by standards. To date, only Apple has developed a plat- the content providers? Will the content providers form which successfully markets content while be able to prevent material from the services they the other two go for collecting data which can be deliver to be embedded in a Google screen? monetised through targeted advertising. And there are other companies looking to naviga- All action is global; this is a fundamental differ- tion as a business model, for instance ”watchmi“ by ence compared to broadcasting platforms. The ba- Springer. Rather than channel-surfing, the service sis for the global approach is the open internet; the will make individual suggestions which are based players do not operate their own infrastructures on the data gathered during earlier consumption; or participate in infrastructures. That this does not the system can be connected to storage facilities. have to remain unchanged is evident from consid- Reducing the complexity of the vast range of of- erations by Google to participate in the frequency fers is a typical service media can provide, but it auctions in the US. On the other hand, the plat- comes up against the same challenge as does the forms benefit from the open internet and advocate way in which Google handles other journalistic net neutrality in their own interest. work: Can and may a business model be built on a strategy of using content and infrastructures pro- Open worlds – closed worlds vided by others, gathering data from them which traditional broadcasting Traditional broadcasting platforms are structured in platforms: walled gardens are used for financing, with the resulting negative the form of walled gardens; at the gate, the platform by nature consequences for the income earned by others operator controls which content will be transmit- and their incentives for investment? ted, the decisive issue being distribution rather Do the TV providers still have a chance to control than communication. Content is mainly profes- the EPG as indicated in the joint papers published sional content and predominantly television ma- by the VPRT and public-service broadcasting? terial. There is no direct relationship between the Why should you have to search through individual provider and the user unless the platform operator media libraries if there is a comprehensive service agrees. Both the content provider and the content which is based on individual demand? user are thus dependent on the platform: the user because he or she wants to consume content from his or her main media, television, and the provider 19 since only the combination of various transmis- The open structure has proved its superiority over sion platforms will provide the audience reach re- attempts at planning by network operators, but quired to ensure funding of the content. also on the part of regulators. Beyond the manage- Growth of the broadcasting platforms has already able world of television content which offers little peaked: Literally 100 per cent of the population in opportunity to providers to distinguish themselves Germany are supplied with television; financing from one another, attempts at setting up walled gar- new content is difficult if it is based on the tra- dens in the internet have met with little success. ditional funding approach of advertising and fees. The Interstate Broadcasting Treaty pays credit to Internet standards ensure Operators bank on the potential growth in the in- the specificities of platforms in open networks; the internet remaining open ternet which is now offered as a second source of special requirements can only be imposed if a plat- income. form dominates the market. Access to closed platforms is only possible if the Platforms in the internet do not offer any protec- provider and the operator have taken out an action against the competition: TV series can thus be cording agreement which covers more than just accessed via Apple, Hulu or specialist platforms. the technical distribution; the operator in addition Scarcity and quality, however, can also become a markets content and therefore has an understand- problem for open networks if they are used for able self-interest in content to match. Access to videos and television distribution to an even the internet requires specific technical arrange- greater degree. The walled gardens of IP-TV are a ments which cause additional expense, especially guarantee for quality – at corresponding expense for regional services, since audiences will only for consumers. Open networks existing alongside be reached if reception of content is made pos- can secure access as long as there is no deliberate sible with the receivers specified by the platform discrimination against providers. operator. Closed networks can be more comfortable, as a In the analogue world, the television set would comparison of the error rates of set-top boxes and bring the entire range of services available into the PCs shows. In return, they offer as an advantage sitting room as a matter of course; this no longer that new applications can be installed more easily applies as the digital world is made up of a large and users do not become dependent on the pro- number of technologies. The provisions of Euro- vider of the hardware or the network. pean legislation based on DVB ensure common basics, but reception is by no means secure in as Currently there is a balance between open and Balance between open and closed networks so far far-reaching a way as is the case for broadband closed networks; this is based on the fact that no internet. operator dominates this market. If, for instance, access to the internet were possible only via Deut- The dynamics of the internet in particular build sche Telekom, the open distribution of video con- on offering an unlimited field for experiment tent alongside IP-TV would be seriously at risk. including open access for companies planning For the future design of transport management to develop and offer new products. The internet built on net neutrality, a key requirement must be standards warrant that routes are freely accessible, open networks as a reference. If that is ensured, allowing the entirety of what the internet has to closed worlds could be acceptable in which Ap- offer to be accessed via any broadband connec- ple could promote new solutions including open- tion, with some restrictions to contend for as far as network approaches. mobile radio is concerned. 20 Broadcasting gearing up for the internet

Effects on the broadcasting world also some infrastructure operators, are going for a The major internet platforms compete against greater share of the value cake by setting up their each other by offering their own content; unlike own platforms. for cable or satellite platforms, no process of verti- Imbalance in the dual For the German television system, the develop- broadcasting system cal integration has as yet set in. ment of the internet could aggravate the imbalance Television is holding its ground and its influence which already marks the dual broadcasting system: as a mass media; consumption times have also been Public-service broadcasting already commands the stable so far although the younger audiences can largest licence-fee income anywhere in the world be expected to watch less TV, being attracted by and is not dependent on advertising revenues. The countless new forms of entertainment including public-value test only applies to content offered games available through the internet. Top sports additionally in the internet. The existing system events, casting shows, news and current affairs pro- which took 60 years to develop requires a thor- grammes including talk shows will continue to be ough review by the German legislator who should the preserve of the major TV channels. Series and redefine the remit of public-service broadcasting. films, on the other hand, can be marketed through However, the close interconnection which results the various platforms in the internet. Thematic from media politics being actively involved in the channels which repeat the same type of content at supervisory councils of public-service broadcast- frequent intervals can be replaced more and more ers does not exactly further such an approach. The by the internet if it has made the leap onto the current supervisory structure offers little incentive TV screen and simple navigation allows for con- to counter the tendencies of providing content sumption of the targeted content at any time a that is similar to that of the commercial side and consumer chooses. to promote innovative content.

Key issue: securing This does not, however, answer the key question In Germany, the chance of funding television con- content being funded how content can be reliably financed in the future tent with the help of fees is smaller than in any – especially as regards content which demands other comparable TV market. Only a small number considerable expense such as individual research of the households which receive digital TV actu- for news. ally own addressable receivers. Free TV dominates The strategy of using the data collected for tar- and thus limits any strategy aimed at building up geted advertising turns the internet platforms into pay platforms, e.g. offering attractive sports rights competitors of the television providers and the as is the case in other European countries. media industry in general. Television advertising The approach adopted by the publishing houses is going to remain the form of advertising which which increase their subscriptions in the light of secures the highest audience reach and will there- the downward trend of advertising is a strategy fore remain indispensable for many advertising which the commercial broadcasters cannot resort campaigns. For covering the total financial needs, to at all. however, that will not be enough. Developing addressable platforms for financing Internet platforms only contribute to financing content offered in the HD standard comes up media where content is marketed against pay; this against opposition from consumer protection; to is the model practised by Apple. Hopes are built aggravate the situation, attractive HD content is on this strategy, especially concerning the future offered by public-service television without en- funding of internet content which is still available cryption, in particular sports events. Technical free of charge. Vice-versa, publishing houses, but mechanisms for limiting copying and time-shift 21 consumption could also stunt acceptance. And last- fully registered, is considered a value in itself. Plat- ly, transparency as regards consumers is not helped forms constitute an essential component for such by Sky and Astra and the commercial advertising- solutions. funded television providers which pursue different HD strategies. Infrastructure providers and platforms Since the providers have to pay for the distribution The telecommunications industry is naturally of their content via cable and satellite, they have less interested in compensating transportation costs money left for investing in content in the medium going down as a result of broadband infrastruc- term. On the other hand, the cost of television is tures being set up by participating in creating so low for German television households that an value through content and applications. For the additional surcharge which may come about with infrastructure providers, it is no longer enough to the new media fee which will replace the licence simply provide circuits and connections. The mo- fee should be acceptable. As far as the broadcasting bile industry faces the dilemma that the two most platforms are concerned, a route could be chosen important products for generating turnover, te- which corresponds to the suggestion that public- lephony and SMS, take up only a small percentage service broadcasting should give up advertising. of the data rates available in broadband networks; While a moderate increase of the cable fee would they therefore want to generate revenue through be comparatively easy to handle, satellite faces the content and applications, mostly video content for practical problem of lacking any direct customer which consumers are usually not willing to pay relationship to most households. This, in turn, will the cost incurred for the data volume required Financing: yes, but data reduce the acceptance of an increase of the cable for transmission. Setting up new infrastructures protection must be ensured fee. As regards satellite transmission, public-serv- requires considerable expenditure and demands ice broadcasting strongly opposes addressability higher frequency capacities. And unlike cable, mo- on the grounds that it could be endangered by bile telephony is also facing competition in the a distribution going beyond Germany and rights same area of distribution. acquisition might be put at risk. Lastly, it is ar- The success of building up platforms in the fixed gued for reasons of data protection and consumer line networks and mobile networks for marketing protection that the possibility of watching TV via content has been limited to date. Rather, the de- DTT and satellite without individualising recep- velopment confirms the fact that new enterprises tion should be retained. Anonymously decrypting such as Google and Apple are far more innovative content as envisaged for HD plus could be one as regards new offers. way, even if this model does not become successful for other reasons or raises concern as regards The development of broadband to date was based Infrastructure providers and net neutrality competition issues. on the networks being open, guaranteeing competition among platforms and choice for consum- But solutions are necessary since the broadcasting ers as well as providers of content. world is facing the challenge of the internet platforms collecting data in a far more precise way The foreseeable funding problems will result in at- that would be possible for broadcasting platforms, tempts to give preference to desired uses in trans- notwithstanding addressability, and since the ad- port management and discriminate against con- vertising money is shifting accordingly. There must tent which is less wanted, or levy extra costs, as is be some form of compensation for this scenario the case for file-sharing. if the fact that the use of audiovisual media is not 22 Broadcasting gearing up for the internet

Another issue is the question whether it is pos- requirement for communication. If, as is the case sible to get platform providers to pick up a share for Apple platforms, a proprietary, albeit specially of the costs for the network in the way in which comfortable access to the internet is offered, this the cable operators are still practising it vis-à-vis does not put open basic supply into question as television content providers. long as basic access remains ensured alongside.

Basic access must Content providers and network operators share The most important form of access protection in remain open for all the interest of making the exchange of videos the medium term consists of preventing basic ac- between users more complicated. They take up a cess to broadband internet from being linked to considerable amount of the data volume without platform functions which select and market con- the network operators or the content providers tent or services. This will retain the option of an benefitting accordingly. immediate communication between providers It will hardly be possible to prevent differentiat- and users as well as among users; new platforms ed pricing models if the minimum requirements must be able to develop without any obstruction concerning transparency are met. From a media by network operators. For instance, access to the regulation viewpoint, this is unproblematic as long internet must not be compulsorily bundled with as providers of television content and telemedia an IP TV offer. content are not treated differently. Rules must also be adhered to by transport man- A closer look at the issue of net neutrality will agement. There must not be any preferential or dis- raise many more questions. criminating treatment of specific services without justified cause. Everyone will agree that emergency calls should be given preferential treatment or that Challenges for regulation voice communication in real time should not be Securing basic access to television and the internet discriminated in comparison to less time-sensitive Today, for participation in social and political life, data transmissions. Other matters concerning net access to broadband internet is as much a precon- neutrality are more complex and require further dition as is universal supply with television. Public investigation. However, it has to be clear that there responsibility is met not only by warranting ac- must not be any selection on the basis of content cess to television and broadband internet as such criteria which is typical of platforms. (which requires special efforts in some respects, e.g. as concerns supply in rural areas). Access must The broadcasting frequencies in rural areas freed also be devised in such a way that citizens can have up in the digital dividend process must command unrestricted access to all offers of information they higher requirements for basic access than any sup- wish; vice-versa, content providers must not be plementary mobile use. Restrictions concerning prevented from gaining access to users. specified uses in the form practiced by the mobile industry for services such as internet telephony Basic supply with public-service broadcasting is as cannot be accepted in this area. dynamic today as is basic supply with television and the internet; it has to be interpreted on the Open access to the internet must also be secured basis of actual use. A rough distinction could be through corresponding measures as regards the re- made between ”must have“ and ”nice to have“. ceiver systems. Customers must not be referred to Mobile TV would in this respect thus be an ancil- sets limiting or hampering certain uses. lary use only while access to the internet inde- pendent from a specific location constitutes a key 23

Specific rules for broadcasting platforms As is the case for the platform regulation already Since broadband internet access will take up only a in force, wider scope could be provided for pro- small share of television consumption for the fore- grammes for which there is special payment. A seeable future, specific rules are needed for- net similar approach could apply to the provision of works and platforms serving basic supply. TV content for mobile reception. For providers and for users, rules ensuring prefer- The role of Deutsche Telekom needs to be watched ence for public-service and advertising-funded tel- particularly carefully since it not only has the key evision are a key requirement. Regulation is need- resource of the German football league in its hands ed since many households in fact lack real choice but also commands a dominating position in the among the various transmission platforms while area of fixed line and mobile telephony. The pos- broadcasters can only survive in the competition if sibility of various positions of dominance being they are distributed on the main platforms. combined must be monitored not just from the Regional and local content requires special ac- viewpoint of state influence, but also in order to cess provisions. Regional and local providers can- keep competition open. Telecommunications en- not draw on the advantage of internet platforms terprises focussing their business efforts at distribu- allowing access from anywhere, but must deliver tion provide a certain counterweight which keeps their content to locations determined by the re- the success of Telekom‘s efforts in the creativity spective network operator. As the networks are sector at bay. built with supra-regional considerations in mind, As long as the receivers provided and the receiver delivery of local and regional content to the point specifications established due to the exclusivity of of delivery becomes more costly. Regional access the Bundesliga transmission rights on the one hand must be classified as part of the overall network; its and the regional monopoly for cable distribution cost must not be levied upon local and regional on the other hand result in impeding access of providers alone. other platforms, requirements regarding the openness of receivers must be controlled; the Federal Since selection by the platform operator must be Market share ceilings accepted on principle – unlike in the case of the Cartel Office is conducting such an investigation for platforms open networks of the internet – further provisions at present. However, the receiver specifications of are needed to ensure that no individual platform today have lost the key role which they held dur- controls access to such a large share of the German ing the introduction of digital television. television households that they cannot be accessed Obligatory carriage which applies for other net- any longer unless said platform is used. As regu- works does not have to be mandated for cable even lated in the USA, market shares should be intro- if this will result in greater limitations of the choice duced for platforms compiling television content. available to consumers than in other telecommuni- This will become particularly relevant regarding cations sectors. The other platforms and level 4 of attempts to control the entire level 3 cable net- the cable networks generate sufficient incentive to works. The provisions of cartel legislation should tailor offers in line with the interests of consumers, not be taken to be sufficient by themselves. In the all the more so since there is little chance of dis- longer term it might be useful to develop instru- tinction as regards different types of content. ments for gathering the information required from a media specific viewpoint as regards data traffic on all platforms and use them for developing a new structural model. 24 Broadcasting gearing up for the internet

Selection through internet platforms types of content have as yet become necessary. But As long as internet platforms do not offer their would alliances in the content sector not be the own content or are connected with content pro- obvious next step in the future? They already ex- viders and as long as the open network is ensured ist in the co-operation concerning marketing of for other platforms, additional provisions do not receivers which are assessed differently in the vari- appear necessary, at least not at present. ous countries. Even if basic access to the internet is On the other hand, platforms are interested in not at stake, key positions regarding access to con- standing out for selection by not distributing cer- tent providers are developing. If, for instance, Apple tain types of content. Apple has adopted a practice gains a position for the distribution and marketing to this effect with a view to US views on morale. of convergent media products as planned by peo- Transparency for such criteria as well as equal treat- ple like Stefan Aust which matches the significance Will the three ”major“ ment for all comparable cases and a procedure to of major cable operators or ASTRA for the financ- internet platforms continue ing of television services, corresponding regulation to hold back? control that this is the case need to be specified. will be needed. There are also good reasons for Internet platforms for search and navigation re- direct customer access being warranted alongside quire additional provisions which match the cur- that of the platform operator so that subscriptions Regulation potential for rent rules of the Interstate Broadcasting Treaty if no of printed newspapers and magazines can be com- navigating systems adequate competition ensues. The most important plemented by electronic products. objective is ensuring various options for consumers even where they have a choice among several As far as Google is concerned, transparency and platforms so that they can select the one which the control of the criteria for selecting media is appears to suit them best. the issue at stake. The more widely-facetted the activities of Google become, the more the ques- Provisions concerning vertical integration tion arises what chances will be left for those busi- The separation of network and use is as old as a nesses operating in the individual areas. Will access principle as the combination of the two inspires become more and more difficult in the internet the fantasy of the industry. through the sheer financial clout and dominating No legal rules exist as yet for broadcasting plat- market position that Google holds? forms except that any – albeit rather theoretical The fact that internet platforms operate interna- – shareholding of a television group in a cable tionally does not impede regulation, especially not network operator would have to be examined with in those areas where the distribution and market- a view to media concentration. The provisions of ing of German media is at stake. A business head- cartel law should also be sufficient for the future. quarters in Luxemburg should exempt the Apple Internet platforms, on the other hand, deserve far iTunes platform from keeping to the rules of open greater attention, in particular ”the big Three“ access as little as it does ASTRA. rather than the frequently practised participation The provisions concerning media concentra- of German media companies in platforms dealing tion require a principal review. with specific aspects only. Not even the interest Murdoch holds in MySpace can so far be rated a To date, media concentration in Germany is regu- success. lated with a focus on television and the national market. While television is set to remain the most Apple, Google and Facebook have so far practised important media for some time to come, its impact restraint, but will they continue to do so? As Apple is as unlikely to grow as is the case for the printed does not yet offer its own content on the platforms press. There are more and more distribution outlets it operates, no provisions in the interest of other 25 for television and other media content; consumers being able to dominate the market as is the case in exert more and more influence over their media the UK through Murdoch or in Italy with Ber- consumption with the varied options the internet lusconi, and also the best-funded public-service and electronic programme guides have to offer. broadcasting in the world. User-generated content gains in importance, also Data protection and copyright – the key funding issue in the political debate. ”Bild“ and ”the box“ are The platforms in the internet are built on collect- losing influence. ing and using data, but do not participate in fund- Digitisation is speeding up this development, thereby ing media content or infrastructures. Review of media concentration law accelerating the creative destruction of traded posi- How content will be financed in the future, what tions of power. In their place, new positions of dom- role the future media fee will play, whether and inance are developing, e.g. in the area of search en- how the rights of authors and distributers can be gines which are already facing challenges themselves. better protected, how the rules for dealing with The open internet has developed a power which data can be developed – these are the key issues for thwarted all attempts at creating ”walled gardens“. the development of platforms in the internet and in It will remain a key mission for any media order to broadcasting, even if they are not part of platform maintain this open structure and to ensure compe- regulation in a narrow sense. Looking into them tition in all key positions and to keep access open would go beyond the scope of this contribution. for new ventures.

The number of media exerting considerable in- Uniform regulation – is the protection of fluence on the formation of opinion will remain minors an appropriate example? limited; mass-attractive content such as films, tel- It has been possible to establish uniform objectives evision as well as other journalistic high-quality for broadcasting and other media offers in the in- media can be funded to a limited extent only in ternet with a view to the protection of minors; a the digital world. joint supervisory regime was organised. However, Additional provisions will be needed if platforms the deliberations on the development of platforms exerting considerable impact on the formation of show that the issues at stake will be considerably opinion start to offer their own content without more varied and more plentiful. First of all, there- sufficient competition being in place. fore, the status quo should be identified and the exchange of those responsible for regulation should In return, the existing safeguards such as the licens- be strengthened. Many questions go beyond the ing of broadcasting content could be given up; a national and even the European scope. By partici- market share model covering all media is no longer pating in this debate, the media authorities fulfil needed. The only issue which the legislator has not their mission of promoting a diverse media land- yet clearly regulated is the possible connection of scape and preventing positions of dominance re- ”Bild“ with one of the two commercial television garding the formation of opinion. groups. Platforms act internationally, from Liberty to Apple, while media markets continue to be characterised by national deliberations. Even if the provisions concerning media concentration were handled more generously in Germany, the country would still feature a particularly varied media system in an international comparison without major players

27 Digitisation of the German television market facts and figures 28 Facts and figures Current state of digitisation in German TV households, June 2010

Andreas Hamann

For the sixth time in succession, the German regulatory au- has risen by approx. 2.6 million. Compared to this, around thorities or media authorities as they are now referred to 14.331 million households still exclusively watch analogue more and more, are establishing the facts and figures on dig- television. ital television reception in German households. For this pur- The share of digital television households has trebled since pose, market research company TNS Infratest carried out tel- the ALM published its first report on digitisation in 2005. If ephone interviews with 8,000 households during the period this trend were to continue in a linear fashion, digitisation 20 May – 28 June 2010 regarding their mode of TV reception. could be expected to be completed in 2015. This theoretical The interviews were conducted disproportionately regarding approach, however, must take two factors into account: One the 16 German states to allow for the situation in each state the one hand, the last analogue households will be hardest to to be shown separately. Further details on the methodology convince of switchover. Saturation in such switchover proc- are given in the respective section of this report. The present esses typically flattens towards the end. On the other hand, report on digitisation, however, concentrates on the major key the decision of the major TV providers to switch off analogue figures relating to the national situation. Detailed descriptions satellite transmission by 30 April 2012 will speed up switcho- can be found on the ALM homepage (www.alm.de/digital- ver (more on this later on). isierungsbericht).

Slight shift in the shares of transmission routes Continuous increase in digital households The shares of the various routes of transmission remained large- The rate of digitisation continues its upward trend during ly stable, continuing the trend of the previous years (Fig. 2). As the current year with 61.7 per cent of German television before, cable still provides access to television in more than households now having at least one digital mode of reception half of the television households (51.4 per cent), retaining its at their disposal (see Fig. 1). This means that 23.133 million lead concerning relevant routes of transmission for the con- TV homes make use of at least one of the four digital infra- tent providers. structures (DTT, DVB-S, DVB-C, DSL-TV). Compared to the figures established for 2009, the number of households 29

Compared to 2009, however, the share of cable households Upwards trend of digital continues has gone slightly down while DSL-TV is on the increase for Only two of the four transmission infrastructures for televi- the second year in succession. Some 2.3 per cent of television reception still allow for analogue signal supply, namely sion households use the telephone cable for TV reception. cable and satellite. DSL-TV has been exclusively digital from There is some reason to assume that consumers who used to the start while terrestrial transmission completed the switcho- receive cable TV now prefer the comparatively new DSL-TV ver process last year. The analysis of the status of digitisation for transmission. The substitution could be due to the fact for the various modes of transmission can therefore concen- that the range of services available compares well and that trate on cable and satellite (Fig. 3). competition via attractive pricing gets hotter. It also appears While DTT and DSL-TV are fully digital, their share of rather unlikely that a satellite or DTT household which has households with digital television reception is comparatively on principle not had to pay for using these infrastructures low. This is due to the small number of households featuring would voluntarily switch to a form of reception which has DTT and DSL-TV reception (Fig. 4). While some 4.167 mil- traditionally been charging connection fees. lion households resort to DTT reception, digital cable is used in some 7.290 million homes.

Fig. 1 Digitisation in German television households

38.3% 61.7 per cent of television households 51.6% have access to digital television

45.0% 46.4% 10.1%

8.6% 2009

Basis: 37.464 million TV households in Germany analogue TV reception only = 14.331 million TV homes Source: ZAK 2010 digitisation report digital TV reception only = 19.327 million TV homes digital and analogue reception = 3.806 million TV homes 30 Facts and figures

Satellite to switch over in 2012 Satellite transmission seems to confirm the finding that such In 2010, 79.1 per cent of satellite households in Germany curves tend to flatten out towards the end of the switchover receive digital TV signals while for cable, the share is 37.8 per process. cent. This translates into 12.699 million satellite households This is due to a number of reasons, be it the fact that some and 7.290 cable homes respectively (Fig. 3). households are simply not aware of the existence of digital Both routes of transmission could continually increase their reception alongside analogue transmission. Many viewers are shares of digital reception. Compared to 2009, digital cable also unsure what type of new receiver they might have to grew by 7.2 percentage points while digital satellite went up buy. And for quite a considerable number of homes, analogue by 5 percentage points. Taking the two modes of transmission services appear to do; they do not see any need for replac- together, around 1 million television households went dig- ing their familiar working TV set by a new one. To convince ital last year (DVB-C: up by 1.239 million, DVB-S by 1.045 viewers concerned of the benefits of digital reception will million homes). This positive development proves the contin- therefore still require some information effort. ued progress of switchover from analogue to digital television reception.

Fig. 2 Access totals via cable, satellite and terrestrial reception

60%

53.7 52.8 51.7 51.8 52.5 51.4 50%

43.1 42.0 42.5 42.0 42.1 42.8

40%

30%

20%

11.5 11.1 11.3 11.1 10% 9.7 9.2

2.3 0.3 0.3 1.0

2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 cable satellite terrestrial reception DSL-TV

Basis: 33.904 / 33.904 / 36.981 / 37.277 / 37.412/ 37.464 million TV households in Germany Sum total > 100 per cent due to homes with several Source: ZAK 2010 digitisation report reception platforms 31

At the initiative of the media authorities, ARD, ZDF, RTL beyond 2012. The date on which cable will give up analogue Group and ProSiebenSat.1 Media AG, together with the trade transmission will be decided by the market and consumer ac- association of the commercial broadcasters (VPRT) agreed on ceptance. 30 April 2012 as the date for analogue satellite switch-off since The positive experience gathered in the DTT switchover the digitisation of satellite has now reached a high level. Two process gives reason to hope that almost all satellite households years before switch-off, the parties involved set up the ”klar- will have switched to digital reception by the day of analogue digital 2012“ project to conduct an information campaign. A satellite switch-off on 30 April 2012. The present survey estab- joint project office will inform audiences now whether they lished some 3.349 million analogue satellite households. Tak- are affected by the switch-off and if so, what they can do to ing into consideration that some of these homes have several ensure continued TV reception. In addition, special trade, TV sets, some 5.191 million receivers would have to be ex- craftsmen, the housing industry and cable network operators changed. In the light of the comprehensive campaign which is will also be advised on the pending measures. In this con- supported by all market players ensuring wide distribution this text it transpired that the major cable network operators will appears a realistic option. Further information can be found continue to provide analogue TV services for their customers under www.klardigital.de.

Fig. 3 Digitisation by transmission platforms

100%

90%

80%

70%

60%

50%

40% 79.1 74.1 65.7 30% 57.3 47.2 20% 37.8 38.8 30.6 10% 21.0 15.2 16.2 9.7

2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010

cable satellite

Basis: 17.529 / 17.571 / 19.859 / 19.588 / 19.765 million cable TV homes 14.616 / 14.242 / 15.734 / 15.657 / 15.773 million satellite TV homes Source: ZAK 2010 digitisation report 32 Facts and figures

Cable continually on the road to digital competition. And digitisation will also be promoted through Progress regarding digitisation is not limited to satellite, but the acquisition of new television sets which nowadays almost also features cable. The increases relating to the digitisation of exclusively feature integrated digital receivers. cable exceed those of satellite; this could be due to the fact As the figures published by market researcher gfu/GfK show, that saturation has not yet been reached. Looking at the situ- approx. 2.1 million LCD TV receivers were sold during the ation in a positive manner, it can be stated that cable house- first quarter of 2010 alone. Assuming that the sales figures will holds obviously find digital pictures attractive. reach similar percentages during the second, third and fourth But it is not only the better picture quality and the increas- quarters, this would translate into just under every fourth ing number of high-definition (HDTV) programmes avail- household in Germany purchasing a large flat screen set. The able which contributes to the continuing upward trend of overall majority of these sets already features digital receivers, digital cable. The switch-off of analogue satellite is expected usually for DTT and DVB-C. By purchasing such a set, the to put digitisation in general and in the cable networks into analogue cable household practically goes digital automati- the focus of attention. Furthermore, DSL-TV will also boost cally.

Fig. 4 Modes of reception in digital households

70% 65.0

61.8 61.1 59.1 60% 56.7 54.9

50%

40%

31.5 30% 29.4

24.7 23.0 23.6 21.8 22.5 20.5 19.4 20% 18.0 17.2 16.7

10%

3.8 1.8 0.6

2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 cable satellite terrestrial reception DSL-TV

sum total > 100 due to homes with several reception platforms Basis: 23.133 digital TV households in Germany Source: ZAK 2010 digitisation report 33

Since the beginning of 2010, most sets on offer also feature a (56.4 per cent) the homes owning one set only, the rate of so-called CI+ slot. This interface allows for integrating differ- digitisation in households owning three or more sets already ent encryption systems which will become relevant once the stands at 77.7 per cent. cable operator encrypts the signals. Cable households require An analysis of the results of the survey shows that the main TV an according decryption system which is now on offer as a set is switched to digital reception first. This continues to ap- module for inserting in the CI+ slot of the receiver. ply for DTT households 82 per cent of which use the digital terrestrial signal of the only or most frequently used television Rate of digitisation on the up with the number of sets receiver in the home. Compared to 2009 (87.6 per cent) the Approx. one third of German television households (33.7 per share went slightly down. cent) own more than one television set. It can be noted that the number of sets in the home increases in line with the rate of digitisation (Fig. 5). While this reaches just over half

Fig. 5 Digitisation of TV sets according to mode of reception

37.464 m 24.872 m 9.613 m 2.979 m 100%

90%

80%

56.4 70% 61.7 70.7 60% 77.7

50%

40%

30%

43.6 20% 38.3 29.3 10% 22.3

total TV homes 1-set 2-set 3 +-set TV homes TV homes TV homes

Basis: 37.412 / 37.464 million TV households in Germany digital Source: ZAK 2010 digitisation report exclusively analogue 34 Facts and figures

Terrestrial reception stable TV reception on the PC and the laptop on the up The share of television households opting for terrestrial re- The present investigation concentrates on the traditional reception has remained almost unchanged (11.1 per cent), as has ception of television via the TV set. However, PCs and laptops the rate of DTT reception in the various German states (Fig. are now also used more and more for watching television. 6). Regions in which public-service and commercial broad- This does not mean media use in the internet (featured in the casters can be received via DTT feature an above-average rate following article by Johannes Kors) but TV reception using of DTT reception while the reception rate is below average a set-top box or a DTT stick which is connected to the PC in areas where commercial broadcasters are not available via or laptop. DTT. Notwithstanding the fact that DTT reception is free This mode of reception increased compared to last year. In of charge, the majority of viewers do not appear prepared to 2010, some 4.914 million TV households watch TV on the forego the entire range of services which includes commercial PC or laptop while in 2009, the number reached some 3.766 broadcasting as well. million. With a share of 30.6 per cent, DTT leads cable (21.4 During the last year, RTL Group started DTT transmission per cent), DSL-TV (20.2 per cent) as well as satellite (11.5 in the Stuttgart and Halle/Leipzig areas, transmitting the sig- per cent) respectively. The lead can be easily explained; it is nal in a different compression standard necessitating new re- due to the fact that upgrading a computer for DTT reception ceivers which also allow for the reception of ARD and ZDF. is comparatively easy at low cost while the other modes of There are no data to indicate as yet whether this has greatly transmission still mostly require a set-top box. increased the rate of digital reception in these areas. 35

Fig. 6 DTT transmission by German states

Flensburg

Schleswig- Holstein The range of services available varies from region to region. Kiel Rostock Status per July 2010 source: www.ueberallfernsehen.de Mecklenburg- Cuxhaven Lübeck commercial and public-sector channels Western Aurich Schwerin public-sector channels only Hamburg Pomerania Lüneburg Bremen Lower Saxony Brandenburg Hannover Berlin Osnabrück Braunschweig Potsdam Frankfurt/O. Bielefeld Münster Saxony-Anhalt Düsseldorf Göttingen Cottbus Northrhine- Halle Köln Westphalia Kassel Leipzig Thuringia Aachen Saxony Bonn Siegen Weimar Hesse Erfurt Dresden Koblenz Rhineland- Frankfurt/M. Palatinate Wiesbaden Mainz Trier Würzburg Saarland Kaiserslautern Saarbrücken Mannheim Nürnberg

Bavaria Stuttgart Regensburg Ulm Baden- Augsburg Wuerttemberg München Freiburg Konstanz

30% 25.7 23.8

20% 15.6 15.6 14.6 12.3 11.1 10.5 10.9 10% 9.0 7.1 7.3 5.4 3.4 4.1 3.6 2.1

Berlin Hesse Bavaria Bremen Saxony Hamburg Saarland Thuringia Brandenburg Mecklenburg-Lower Saxony Saxony-Anhalt Germany in total Schleswig-Holstein Baden-Wuerttemberg Rhineland-Palatinate Western PomeraniaNorthrhine-Westphalia

million TV homes Basis: 37.464 million TV households in Germany Source: ZAK 2010 digitisation report 36 Facts and figures Watching TV online: reach and acceptance of web TV

Johannes Kors

In 2009, viewers spent an average 212 minutes per day watch- IP-TV ing television. Apart from the year 2006 for which the same Internet Protocol Television (IP-TV) generally relates to the rate was measured, this is the longest time viewers ever spent broadband transmission of digital television content via a consuming traditional television. For those who speak up for closed network.1 Reception on the classical TV screen is ef- the internet and already rate television as a thing of the past, fected via a set-top box. In Germany, IP-TV is offered by the this information which was provided by consumer research telecommunications providers Deutsche Telekom (”t-home“) institute GfK (Gesellschaft für Konsumforschung) at the start and by Hansenet with its ”Alice“ product range. of 2010 will have come as a surprise. Alongside traditional tel- IP-TV is usually one component of so-called triple play offers evision consumption, internet television gained in relevance alongside broadband connection and telephony. Users must over the last few years. According to the ARD/ZDF 2009 on- pay an according monthly fee. IP-TV is thus considered the line study, around two thirds of Germans going online at least fourth transmission platform alongside DTT (terrestrial re- occasionally watch TV and video content in the internet. ception), DVB-S (satellite) and DVB-C (cable). In addition to Internet television comprises new forms of content such as traditional TV content, other services such as video-on-de- IP-TV, web TV, catch-up TV (television broadcasts on demand and interactive service can also be received via IP-TV. mand), video-on-demand as well as video portals and in- Web-TV tegrated moving images in the online offers of publishing Unlike IP-TV, web TV downloads television-type content houses as well as other online content. All this will probably from the internet via streaming onto a computer, laptop, not replace traditional TV but may well increasingly gain in smartphone or mobile handheld serving as receiver. Web TV acceptance. requires broadband internet access with a minimum down- load speed of 2 Mbit/s. At the beginning of 2010, more than Types of offer and developments 60 per cent of Germans could already access the internet via No generally accepted definition of the term internet television has been established so far. The terms IP-TV and web TV are used as synonyms. Internet Protocol Television is the smallest common denominator underpinning the varied forms of distribution of television in the internet. 1 see PricewaterhouseCoopers: IPTV Das neue Fernsehen? Dusseldorf 3/2008 37 broadband which usually offers sufficient bandwidth for web depending on the definition. On the basis of a first analysis, the TV consumption. Content available in HD quality which will Berlin-based consultancy Goldmedia puts the figure for the become more and more relevant for tomorrow's television, year 2009 at around 1.900 web TV providers in Germany. however, requires bandwidths of at least 8 Mbit/s, depending Web TV allows the traditional television broadcasters to ex- on the network. pand the reach of their services, thereby generating additional Web TV includes the content available in the media libraries advertising revenue and charging extra fees for video-on-de- of public-service and commercial broadcasters free of charge, mand offers of broadcasts already transmitted in traditional TV. the video-on-demand portals of the commercial broadcasters For the advertising industry, video-streaming offers are particu- offering content for which consumers have to pay in most larly attractive as the return channel allows for the transmission cases, TV aggregators such as Zattoo as well as original web of targeted advertising and for directly addressing consumers. TV offers (see Fig. 7). In addition, Web 2.0 portals such as In addition, web TV is gaining in relevance rapidly in the form YouTube, MyVideo or Clipfish are also classified as web TV, of so-called corporate TV or business TV (Fig. 7).

Fig. 7 classification of web TV offers

Type of offer Examples Characteristics

web TV channel (online only) Ehrensenf, PietShow, Sail.tv original web tv production for the intenet

web TV spin-offs and media libraries rtl.de, sat1.de, n24.de, daserste.de, wdr.de, take-over from traditional of traditional TV channels ZDFmediathek, france24.com TV or additional offer

web videos of existing media bild.de, SpiegelOnline, Focus.de, online offer usually comprising text, (print, radio & portals) sueddeutsche.de, radioenergy.tv, t-online, msn photos andvideo contributions

pay-on-demand offers maxdome, LIGA total, save.tv, sportdigital.tv, fee-based web TV FC Bayern TV

non-commercial Bundestags TV, green.tv, CampusTV original web TV provided by public bodies web TV offers or institutions

corporate TV Mercedes Benz TV, RedBull TV, adidas.TV, business TV, image and trade mark content Douglas online TV

multi-channel aggregators Zattoo, hulu, 3min provision of different bundled web TV offers

Video-Plattformen YouTube, MyVideo, Clipfish, megavideo users simultaneously act as web TV providers 38 Facts and figures

Audience reach and acceptance of IP-TV and web TV consultancy, puts the number of users of IP-TV and web TV Internet-based television will get a definitive boost over the for the year 2020 at 37.8 million, compared to 15 million at next few year, experts believe, accrediting it not lastly to the present 3 (Fig. 8). improved internet supply and the resulting higher bandwidths. The ARD/ZDF online study lists user-generated video por- For the year 2014 Goldmedia forecasts approx. 3.1 million IP- tals and media libraries as the most popular offers frequented 2 TV households. This corresponds to approx. 8 per cent of as web TV. The results of the TNS Infratest study conducted households overall. At the beginning of 2009, the rate was 1.1 for this report confirm these forecasts. User-generated con- million or 2.9 per cent of households. Goetz Partners, another tent is already watched by 19.7 per cent of TV households at least once a week. This corresponds to an increase of 37 per cent over 2009 and is almost double the rate given in 2008

2 Goldmedia: IPTV 2014 Geschäftsmodelle und Prognosen für 3 Goetz Partners: IPTV-Studie 2009 , Munich, May 2010 IPTV-Plattformen in Deutschland, Österreich und der Schweiz, Berlin, May 2009

Fig. 8 IP-TV households and share in TV reception in Germany 2008 – 2014

3.5

3.1

3.0 2.8

7.8% 2.5 2.4 7.2%

2.0 1.9 6.3%

1.5 1.4 5.0%

1.1 1.0 3.7%

2.9% 0.5 0.5

1.4%

2008 2009 2010 2011 2012 2013 2014

Source: Goldmedia 2010 million IP-TV homes percentage of TV reception 39 in which the report on digitisation listed it for the first time. offers. Online content offered by public-service broadcasting The media libraries of the public-service broadcasters are also is not detailed; major market players such as YouTube are not frequented by more and more viewers: some 6 per cent of taken into consideration. By contrast, Nielsen NetRating col- the population (3.7 per cent last year) now use the TV librar- lects all offers as regards internet consumption and publishes ies. By contrast, only 2 per cent of TV households (2009: 1.9 the data measured as far as they are available. The Nielsen panel per cent) watch live broadcasts via the internet at least once is based on the technical measurement of internet consumption a week, while the rate for video-on-demand consumption is including some 24.000 persons, giving monthly data not only only 0.5 per cent (2009: 0.3 per cent). Considering the cost on the number of users (unique audience), but also on the dura- incurred for users, the low rate does not really come as a sur- tion of consumption (total minutes), thus providing the largest prise (Fig. 9). collection of data on online consumption available at present. The consumption of web TV in the internet has not yet been The data provided by Nielsen NetRating confirm that user- investigated in detail as regards audience reach. The AGOF generated content scores the highest audience reach for mov- study which is coordinated by ag.ma largely provides data on ing images offered in the internet. YouTube ranks first among the use of advertising-funded online media and e-commerce video portals. During the first quarter of 2010, the unique

Fig. 9 Video content in the internet – frequency of use in TV households – ”use it at least once a week“

20% 19.7

15% 14.4

11.9

10%

5.9

5% 3.7 2.7 2.0 1.9 1.2 0.5 0.3 0.3

2010 2009 2008 2010 2009 2008 2010 2009 2008 2010 2009 2008

user-generated content media libraries live TV in the internet video-on-demand

Basis: 37.464 million TV households in Germany Source: ZAK 2010 digitisation report 40 Facts and figures

audience of YouTube came to an average 17 million persons the intensity measured in relation to time spent (time per per- per month who watched videos for an average 49 minutes son), consumption of most TV domains in the internet is still (approx. 1.6 minutes per day). This makes YouTube not only relatively low compared to classical television consumption. the video portal accessed by Germans most frequently by far, RTL is watched by more people on a single day than rtl.de but also the internet video service with the highest acceptance during a full month. Even the biggest live event in the internet overall. The German video portals MyVideo and Clipfish were to date, the 2010 Football World Cup, produced only marginal watched by a unique monthly audience of 3.7 million and 2.0 audience reaches for web TV compared to traditional televi- million people per month respectively. sion. For the Holland – Brasil top match during the afternoon, The video offers provided by broadcasters in the internet are ARD measured 180.000 streams while the rate measured by also gaining in popularity. During the first quarter of 2010, rtl. GfK for traditional television was 12.3 million viewers. So far, de measured 4 million viewers while Prosieben.de reached 3.7 web TV content provided by television broadcasters therefore million users. ZDF.de was watched by 2.7 million persons, wdr. still only complements traditional television (Figs. 10, 11). de by 2 million, ard.de by 1.8 milion and sat.1.de by 1.7 persons during the period in question. Taking into consideration

Fig. 10 Top websites: TV content and video portals in the internet*

unique audience time per person Rank Website level per month per month 1st quarter 2010. in millions 1st quarter 2010. in minutes

1 youtube.com Domain 17.0 50

2 rtl.de Domain 4.1 21

3 myvideo.de Domain 3.7 7

4 prosieben.de Domain 3.0 6

5 zdf.de Domain 2.5 15

6 clipfish.de Domain 2.0 9

7 wdr.de Domain 2.0 8

8 ard.de Domain 1.8 7

9 sat1.de Domain 1.8 9

10 daserste.de Domain 1.7 12

11 tagesschau.de Domain 1.7 10

12 maxdome.de Domain 1.6 10

13 sport1.de Domain 1.5 14

14 br-online.de Domain 1.3 7

15 ndr.de Domain 1.2 7

16 swr.de Domain 1.1 13

17 mdr.de Domain 1.1 11

18 n-tv.de Domain 1.1 24

19 sevenload.com Domain 0.9 4

20 france24.com Domain 0.8 1

*) excluding teleshopping offers Source: Nielsen Netview. 1st quarter 2010 41

Development of original Web TV content is still in the start- consumption relates to people watching content that had al- ing phase with the media sector testing what to produce. Only ready been transmitted in traditional television or which they one original web TV offer, sevenload.com, has generated a had missed.4 noticeable reach with its community for videos, pictures and The online offers and portals of newspapers and magazine web TV. According to Nielsen NetRating, its unique audi- publishers also include video material together with texts ence came to an average 0.9 million persons per month dur- and photos. The share of moving images, however, is usually ing the first quarter of 2010. With an average monthly reach quite limited. The internet offers of the large portals (t-online, of 1.6 million users, maxdome is the video-on-demand offer gmx, web.de and msn) and publishers (bild.de, Spiegel.de, with the highest audience reach. Apart from portals offering content against pay, the media libraries of the public-service broadcasters are also regularly used. The unique monthly audience of ard-mediathek.de during the first quarter of 2010 was 0.6 million people. The data signal a trend which can also 4 see Stipp, Horst: Verdrängt Online-Sehen die Fernsehnutzung?, be noted in the USA, namely that the lion share of online in: Media Perspektiven 5/2009, page 226ff

Fig. 11 Top websites: publishing houses and portals with video components

unique audience time per person Rank Website level per month per month 1st quarter 2010, in millions 1st quarter 2010, in minutes

1 t-online.de Domain 14.5 50

2 web.de Domain 12.0 94

3 yahoo.de Domain 9.6 53

4 gmx.net Domain 8.4 86

5 msn.de Domain 6.6 19

6 bild.de Domain 5.8 42

7 yahoo.com Domain 4.9 11

8 spiegel.de Domain 4.3 29

9 computerbild.de Domain 4.2 7

10 aol.de Domain 3.9 28

11 gmxattachments.net Domain 3.7 16

12 focus.de Domain 3.5 8

13 msn.com Domain 3.4 5

14 welt.de Domain 3.1 11

15 arcor.de Domain 3.1 54

16 freenet.de Domain 2.9 83

17 sueddeutsche.de Domain 2.9 9

18 pcwelt.de Domain 2.6 8

19 aol.com Domain 2.5 90

20 gofeminin.de Domain 2.5 8

Source: Nielsen Netview, 1st quarter 2010 42 Facts and figures

focus.de, welt.de, sueddeutsche.de) reach several million users to 3 per cent of TV households. Goldmedia, the Berlin-based per month with their online content; this can be considered strategy consultancy, forecasts that around 60 per cent of all quite a respectable rate (see Fig. 10). TV homes in Germany will use internet-ready TV receivers Hybrid-TV by 2015. The possible dimensions of hybrid TV development Findings so far indicate that traditional TV is not displaced by become clear when one considers the fact that manufacturer internet television, especially since new technologies such as Sony will fit its sets with Google TV in a cooperation as of HD+, 3D and hybrid TV will make the classic TV set even the autumn of this year. more attractive in the future. It will be complemented by in- Google TV is based on the Android operating system and can ternet TV which will expand its relevance step by step. be watched via PCs, TV sets, smart phones and tablet PCs. The traditional television formats will be increasingly merged It allows users to access or search for TV channels and indi- with online-specific search services such as portals, search vidual broadcasts as well as for web content via any multime- engines, link lists as well as rankings and recommendations dia receiver. It links classical television with the strengths of based on consumer behaviour in the internet. Hybrid TV will the internet. After Google, other majors of the internet such provide another boost for converging television and the in- as Microsoft and Yahoo now also go for the convergence of ternet. HbbTV (Hybrid broadcast broadband TV) which was television and the internet. While classical television will not recently introduced as a new standard allows consumers to be displaced by this development for the foreseeable future, watch internet offers such as archive material stored in me- the consumption of linear television can be expected to go dia libraries on the TV screen. According to the consumer down in line with the growing spread of hybrid TV and the research institute GfK, 1.17 million hybrid TV receivers were increase of web TV offers. How this will impact and alter sold in Germany by the end of May 2010; this corresponds the consumer and advertising markets, however, cannot yet be forecast at this point. 43 44 Facts and figures Digitisation in Europe on the move

Mario Hubert

At the end of 2008, half of all European television households But the other digital infrastructures caught up considerably covered by the ASTRA footprint received digital television. last year, achieving even higher growth rates. In 2009, more Last year, even more homes went digital, resulting in 60 per than 10 million new households opted for digital terrestrial cent of television homes being connected to a digital infra- television; this corresponds to an increase of 32 per cent. DTT structure (satellite, cable, terrestrial or IP-TV) at the start of now supplies television services to just under 42 million or 29 2010. By now, 146 of the 244 million television households in per cent of the digital television households. IP-TV achieved Europe have gone digital; this is an increase of 19 per cent or similar growth rates and pushed up its total by 2 million new just under 24 million compared to last year. homes to just under 9 million households; this is 6 per cent of The rate of digitisation, however, differs considerably across the digital market. Cable remains in third place as far as digital Europe: In Western Europe, 68 per cent of the television homes infrastructures are concerned, reaching 24 million households have already gone digital while the rate in central and Eastern (plus 4.3 million or plus 22 per cent over last year). Europe is only 32 per cent. In Western Europe, the interest of A comparison of the status of digitisation of television recep- consumers concerning digital television is fuelled especially tion shows that in the European league, Germany ranks in a by the positive effects of HDTV and new applications such as middle position with a share of 56 per cent.1 time-shift consumption (”catch-up TV"). In Eastern Europe, Of the total 37.4 million television households in Germany, on the other hand, the focus is set more on the higher number more than 21 million have opted for digital reception by now; of channels and improved picture and sound quality offered by last year, more than one million homes switched over. Satellite digital transmission. reception has the greatest market share among digital trans- A comparison of the infrastructures reveals great differences: mission routes (58 per cent), with digital cable coming second While digital reception is possible for as many as 92 per cent of (30 per cent). DTT (10 per cent) and IP-TV (3 per cent) satellite households already, DTT (48 per cent) and digital ca- make up the rest of the market. ble (34 per cent) lag far behind. For pushing digitisation along in the future, increased investment is still necessary as regards technology, programme content and consumer information. A look at digital homes in Europe shows that satellite is in the lead in the audience reach league: 49 per cent (71 million households) receive television via this mode of transmission. 1 Due to the connection to the figures for the other European Compared to last year, the rate increased by more than 7 mil- countries, this figure is based on the SES ASTRA satellite monitor (March 2010); this accounts for the deviation from the data given lion homes (11 per cent). in the preceding facts and figures section. 45

However, with its 5 per cent increase in digital television The Netherlands are another country in which cable de- households Germany trails all other European countries. This termines digitisation. It is a typical cable market (77 per cent can certainly be attributed to the fact that the German chan- of all television households). Digitisation of the cable has nels with a high audience reach are still available in analogue reached 43 per cent; by contrast, nearly all satellite households technology via cable and satellite. For analogue cable, not have already gone digital. switch-off scenario has as yet been discussed. Finland takes pride of place as regards digitisation: It is the While the digitisation of terrestrial television has already been only country which had switched all infrastructures to digital completed, the rate of digitisation of satellite and cable house- transmission for its 2.1 million households by the beginning holds in Germany still varies widely: Three quarters of the of this year. Most homes resort to cable reception (44 per satellite households have already gone digital while for cable, cent) or terrestrial television (51 per cent). Terrestrial trans- the rate is only one third. The 12 million analogue cable TV mission which includes both free TV and pay-TV (PlusTV) households thus present the biggest challenge as regards digi- were fully digitised by the end of 2007. Last year, all cable net- tisation. works delivering TV to the 950.000 Finnish households were

Fig. 12 Digitisation in Europe

1.2 100%

90% 1.3

5.2 80%

50.6 70% 34.7 3.3

13.4 60% 1.7 3.7 4.3 5.3 50% 56.3 35.5 9.8 10.7 17.1

40% 31.9 16.9

9.8 30% 44.4 32.7 4.1 20% 42.7 6.4 32.9 32.4 29.1 10% 20.7 15.5 8.5 3.7 Finland UK Spain Italy France Netherlands Germany Europe digital TV homes 2.13 m 22.56 m 13.37 m 17.12 m 17.25 m 4.00 m 21.12 m 145.75 m TVhomes 2.13 m 25.49 m 16.02 m 23.90 m 24.58 m 7.12 m 37.43 m 244.19 m

Basis: TV homes IP-TV Source: SES Astra Satellite Monitor, March 2010 DTT digital cable digital satellite 46 Facts and figures

digitised. The strong competition between the various net- of the terrestrial homes in the UK have already switched to work operators undoubtedly sped up switchover. In addition, digital reception. The remaining households which have not two competing services for satellite TV (Canal Digital and yet converted their mode of reception are the only analogue Viasat) as well as IP-TV providers are available in the Finnish households left in the UK since both satellite and cable are market, the latter serving only a small section of the market. fully digital already.

Runner up to the Finnish rate of digitisation is the United Satellite which is represented by the pay-TV provider Sky Kingdom where nine out of ten television households watch and the free service freesat takes the lead as far as HDTV is television via a digital infrastructure. However, there are concerned. Sky provides 38 HD channels to its customers marked differences between Finland and the UK as regards who can thus choose from the largest range of HD services in the shares held by the different infrastructures. DTT is the Europe. In addition, Sky now also offers HD-ready receivers transmission system most widely used, delivering television to at a heavily subsidised price of 49 pounds or gives them away 46 per cent of the 25.5 million British television households. free of charge. This has attracted more than 2 million Sky Satellite follows in second place (43 per cent). Three quarters subscribers to HD reception. As regards households opting for

Fig. 13 Digitisation of TV households

Source: SES Astra Satellite Monitor, March 2010 > 60% 40–60% < 40% 47 freesat, the overall majority (800.000) also has an HD receiver These figures show that the digitisation of the television for watching BBC and ITV in high resolution technology. In markets is progressing faster in some countries than in oth- all, almost 3 million British households watch HDTV; this is ers while full digitisation in Europe is still some way away. the largest HD market in Europe by far. In Eastern Europe in particular, considerable financial invest- Furthermore, the digital personal video recorder (PVR) has ment is needed for the terrestrial infrastructure but this will established itself both for pay TV services (Sky+) and for free- probably be hampered by the overall economic situation. One TV (freesat+); satellite TV is highly popular. Some 6.5 mil- possibility which a country could adopt to avoid the cost in- lion Sky subscribers already use a receiver offering a recording curred in extending the networks could be co-operations be- function; in around one third of the freesat households, the tween the infrastructures for pushing digitisation; examples option of time-shift television is used. for this approach can be found in the UK (freesat) and in France (TNTSAT). The large number and the quality of digital content together with additional functions make the UK the forerunner of Eu- But even in Germany, the completion of switchover of sat- rope as regards digital television; it will be one of the next TV ellite transmission which is scheduled for 2012 will require markets to complete digitisation before long. some effort. In particular, informing consumers should not be taken lightly to ensure that they become fully aware of the Finland and the UK are followed by Spain, Italy and France benefits of digital reception. in the digitisation league. In Spain, 83 per cent of households have gone digital already; two thirds of the market are controlled by DTT. The digital television market in Italy (72 per cent of all TV households) is divided more or less equally between satellite and terrestrial television; IP-TV still only plays a minor role with a market share of 5 per cent. As in 2008, two developments lent momentum to the re- newed growth of digitisation in France. One the one hand, TNTSAT, the digital satellite service, continues to be highly popular among consumers with its bundling service for the free terrestrial channels (comparable to freesat in the UK): Almost 2 million TNTSAT receivers have already been placed in the market. On the other hand, the French internet service providers have adopted a highly successful strategy for marketing low-cost triple-play packages with high bandwidths. These offers are highly attractive for consumers and pushed up the IP-TV market by 21 per cent last year. A total 3.3 million television households in France (13 per cent) now consume television via this infrastructure. This is the largest IP-TV market in Europe by far, representing a total of 37 per cent of all households in Europe supplied via IP-TV. The greatest section of the digital television market in France (46 per cent) is commanded by DTT. IP-TV, DTT and the various digital satellite platforms and cable operators supply 17.2 million digital households. Digitisation of the French television market has thus reached 70 per cent, growing by almost 10 percentage points last year. 48 Facts and figures Methodology

This survey employed computer-assisted telephone interviews Defining cable and satellite reception (CATI) on the basis of the telephone random sampling sys- Television sets connected to a satellite master antenna system tem used by the ”Arbeitsgemeinschaft der deutschen Mark- (SMATV) which require no separate receiver for TV recep- tforschungsinstitute“ (association of German market research tion are counted as cable reception. In these households (ap- institutes, ADM). The interviews were held during the period prox. 333.000 homes), the high-frequency satellite signals em- 20 May – 28 June 2010. The survey was carried out by TNS ployed for transmission are converted for transmission in the Infratest MediaResearch on the basis of a questionnaire which low-frequency SMATV cable networks. The range of services largely corresponds to the German Satellite Monitor (SES As- available is pre-defined as is the case for customers supplied by tra). By aligning the survey instruments, the results of the two level 3 network operators. Satellite reception therefore only surveys can be better harmonised. comprises television sets using a satellite receiver. The rationale The overall population basis for the survey was represented by for this definition is that the survey was devised to analyse re- all German-language private households in Germany. Since ception from the viewpoint of the television households. the 2007 survey, the projection has no longer been based on households of Germans only, but also includes households of Establishing transmission platforms and transmission non-Germans. The definition of the term ”overall population technologies basis“ this year for the first time corresponds to the definition For each of the television sets in the households investigated used by ma (media analysis consortium) for German-language (with up to nine sets being counted), all available transmission households (= German households plus households with a EU platforms were analysed. Households receiving both terrestrial 26 head of household plus household with a non-EU head of and satellite services with the same set were included in both household with completed school education). transmission categories for the analysis of television reception In 2010, the overall population basis was approx. 39.12 mil- in the homes. As can be seen in Fig. 2, this can in some cases lion households. Of these, 95.8 per cent (37.46 million) own a result in a sum total exceeding 100 per cent. The 4.9 million television set, forming the basis for the presentation of results. PCs or laptops which can receive television are not included The survey was based on a net number of 8,000 interviews. in the analysis. In each case, the interview was conducted with the person In the analysis of the transmission technologies (analogue or in the household stating that they knew best about television digital), cable reception forms an exception: Television house- consumption and reception in the household. holds with cable reception using a television set which is con- The 8,000 interviews were conducted disproportionately (500 nected to a digital cable receiver are able to continue watch- interviews per state) in order to warrant a sufficiently solid ing analogue services. As this form of simultaneous analogue basis for each German state. The disproportionality was bal- and digital reception does not exist for satellite distribution or anced later during weighting to give representative results on terrestrial transmission, all cable television sets with a digital a ”total“ basis. receiver are counted as digital units for the benefit of uniform presentation. 49

51 Regulating platforms and securing digital access: the remit of the regulatory authorities

Digitisation means radical change: It widens the range of Regulating platforms content available and thus generates a need for a new basis of The former clear separation between the content and the funding; it overcomes the barrier that traditionally separated distribution of media is giving way to vertical integration: media and thus puts their traded financing models into ques- Network operators are no longer mere transporters of con- tion. Digital transmission infrastructures and digital receivers tent, but put together and market content to their customers. bring new challenges for users facing navigation and orienta- They gain influence on receivers and the way in which they tion. Even if television still retains its leading position for the are used. The principle of receiving all broadcast content on formation of public opinion and broadband cable holds on to one set which was a truism in the old days can today be real- first place among infrastructures in Germany, the traditional ised under complex technical and economic conditions only. positions of power are waning. In their place, new key players On the other hand, the convergence of transmission infra- battle it out for top place, especially as regards platforms. structures generates new choice for the consumer: he can Digitisation means new major tasks for media legislation and now watch TV via the fixed telephony line, make telephone media politics: The issue at stake is no longer the allocation calls or surf the internet using the cable network. Television of scarce and correspondingly valuable transmission capaci- becomes portable and mobile, as does the internet. Regula- ties to foster the variety of services on offer. The classical tion has to face the challenging task of securing variety of objective of securing and supporting a varied range of media choice for consumers and warranting identical conditions for content now has to be achieved by resorting to new means the competition of platforms while at the same time taking which are determined by the digital era, independently of into consideration the specificities of each use with regard to transmission infrastructures, receivers and technologies. The its relevance regarding the formation of public opinion. convergence of the media is matched by the broadcasting The Interstate Broadcasting Treaty has adopted a technology- order evolving into a media order. neutral approach concerning platform regulation for which the German state media authorities developed concrete provisions. The statute on access and platform regulation merges platform regulation and the rules for securing digital access. 52 the remit of the regulatory authorities

Digital access Tools of regulation and convergence of the media Access to media is a core element of any media order. Secur- Moderating and balancing the differing interests constitutes ing access has to take various forms: For one thing, access to a major element of platform regulation, taking its position networks and technical platforms must be ensured for con- between content providers and platform operators, consum- tent and service providers. For another, concentration of the ers and media providers. power of opinion must be prevented as has been the case When it comes to the digital world, managing scarce resourc- for a long time. Access is much more important for the for- es is no longer the key concern. The issues at stake are specifi- mation of public opinion especially for new and innovative cations for digital receivers, provisions for channel listings and enterprises than in the economy in general. The negotiating electronic navigation, rules for the packaging of content, and clout which the major television groups hold in the digital fine-tuning the framework applying to individual providers. world must also be taken into account. And lastly, access to a varied range of media content must be safeguarded for con- Digitisation has led to increased overlaps between media and sumers and citizens. They have to be protected in their sov- telecommunications law; as a consequence, cooperation with ereign choice and navigation through content, irrespective of the Federal Network Agency is an important element. The the extension of technical options impacting their behaviour changes of the economic framework which characterise the as users of media. process of digitisation also raise competition issues. However, media politics still has to take on the challenge of deciding on the structures of the industry and ensuring openness, not Analogue-digital switchover only with a view to economic considerations. The transition from analogue to digital transmission holds great opportunities both for the media industry and for con- The media authorities can work towards realising the objec- sumers. Organising it to the benefit of all involved presents a tives defined by the legislator and safeguard the interests of great challenge for media regulation. In the case of terrestrial consumers and citizens in their neutral position. They want TV transmission, the media authorities successfully moder- to master the challenge of ensuring transparency for digital ated an extension of the range of content which paid at- developments and offering advice to politics. tention to the interests of consumers. Switchover of satellite The Commission on Licensing and Supervision (ZAK) co- to digital transmission will also be completed shortly under ordinates these tasks through its representative for platform the guidance of the media authorities. For cable as the most regulation and digital access who prepares the decisions of important transmission platform, this challenge has yet to be the ZAK with the support of the expert staff of all media mastered. authorities. The authors 53 The authors

Andreas Hamann manages the joint office of the Association of German media authorities (ALM).

Dr. Hans Hege is the representative for platform regulation and digital access of the ZAK and director of the Berlin-Brandenburg media authority (mabb).

Mario Hubert has been working for SES Astra (Luxemburg) since 2007 in the market development section which also deals with market research.

Johannes Kors is deputy managing director of the Bavarian media authority (BLM) and managing director of Medientage München GmbH. 54 Glossary Glossary

Addressability DSL-TV A receiver or connexion will be clearly and individually transmission of content and telemedia services via wired DSL identified by a service. This enables service providers (e.g. networks. Transmission is based on the internet protocol (IP); cable operators) to activate a service or channel for specific the term ”IP-TV via DSL“ is therefore equivalent to DSL- receivers, for instance for subscribers of programme packages, T V. t IP-TV while keeping it disconnected for others. Activation is usually DSL networks are comparable to traditional cable networks effected employing encrypted signals and a so-called smart in that they are accessible only for closed user groups against card. In the case of IP networks, every connexion is identified subscription and the content provider offers only a pre-de- by its IP address. In contrast to broadcasting networks, the fined, limited range of TV content or telemedia services. signal or content is not automatically available for every consumer, but is targeted at users who have requested a specific As a system-inherent feature, each customer point is indi- content. Addressability differs from the identification of users; vidually connected to the point of delivery for the TV and e.g., smart cards can be obtained anonymously. telemedia services of the network and provides a return channel. This permits the definite addressability of the user. basic encryption In addition, interactive applications can also be realised at ac- encryption of all content transmitted via one transmission ceptable cost. platform to allow access for entitled users only. DTT-2 Common Interface (CI/CI+) successor standard to DTT, aiming in particular at more ef- standardised interface via which a conditional access module ficient encoding and allowing for encryption. (CAM) in the form of a plug-in card can be inserted into the set-top box. CI+ as the CI successor system is to provide EPG better copy protection. electronic programme guide, an application allowing search and selection of digital TV services in the form of an ”elec- digital dividend tronic TV magazine“ and in many cases also offering other transmission spectrum freed up as a result of digitisation, as functions such as programming for recordings or access to digital transmission of content takes up less frequency capac- recorded broadcasts, media libraries or similar. ity than analogue transmission. HbbTV (Hybrid broadcast broadband TV) DSL (digital subscriber line) standard published by ETSI (European Telecommunications telephone line used for high bit rate transmission. ADSL: Standards Institute) for the simultaneous presentation of tel- asymmetrical digital subscriber line. Data rates in the down- evision and internet content on the TV screen. HbbTV was link are up to 6 MBit/s; ADSL2+ up to 20 MBit/s. VDSL: developed by an industrial consortium and the Broadcast very high bit rate digital subscriber line: up to 50 MBit/s in Technology Institute (IRT) and is based on a programming the downlink. language version which was developed for the entertainment industry. 55

HTML (CE-HTML). navigator The standard has not yet been adopted by all receiver manu- system indicating and starting digital programmes based on facturers some of which use their own systems for the presen- service information (SI) transmitted in the DVB transport tation of internet sites on the TV screen. stream. The navigator or base navigator provides only basic technical functions; by contrast, the t EPG also offers con- HDTV (high-definition television) tent and extended services. high-resolution technology using a 16 : 9 aspect ratio and a minimum rate of 1280 x 720 = 921.600 pixels (full HD: 1920 set-top box (STB) x 1080 pixels). receiver device for digital television. For the various transmission platforms (satellite, cable, terrestrial, DSL), different IP-TV (internet protocol television) types of set-top box are required. television delivery using the internet protocol. The term does not, however, specify the network used for transmission. This simulcast requires additional details, e.g. IP-TV via DSL. In general simultaneous transmission of content (programmes, services) terms, IP-TV is often equated with DSL-TV to distinguish of the same type on different platforms (e.g., analogue and it from t Web TV. digital cable).

MHP (Multimedia Home Platform) SMATV standard permitting the transmission of digital content in the satellite master antenna system using multiple satellite and sense of an extended, more modern videotext as well as in- broadcast cable signals to create a single integrated cable sig- teractive applications. MHP could not establish itself in the nal for distribution to a cabling network for several flats or market; in Germany, there are hardly any MHP-ready sets houses (see Methodology section on page 48). available in the market. triple play mobile TV simultaneous supply of broadcast content, internet access and transmission of multi-media content to handheld devices. telephony services. Transmission can be along different routes, e.g., mobile internet or broadcast infrastructures featuring standards such as Web TV DMB (digital multimedia broadcasting) or DVB-H (digital ”internet television“ accessible in the open internet. In con- video broadcasting for handhelds). trast to DSL-TV, the range of services is not linked to a specific (internet) provider whose content is packaged by the MPEG (Moving Pictures Expert Group) provider of the infrastructure. Web TV is available across the related group of standards compressing audio and video sig- entire world-wide web as far as the bandwidth permits suffi- nals. For TV transmission, MPEG 2 and MPEG 4 are usually cient transmission quality. Independently from the unrestrict- employed with MPEG 4 offering higher compression rates. ed distribution across the www, content can be encrypted MPEG 4 is used for HDTV transmission. and can necessitate registration and/or activation. 56

58 Imprint

Bibliographical information Deutsche Nationalbibliothek Deutsche Bibliothek lists this publication in the German national bibliography; for detailed bibliographical data, see http://dnb.d-nb.de

Published by...... Kommission für Zulassung und Aufsicht (ZAK) Commission on Licensing and Supervision of the German Media Authorities ALM-Geschäftsstelle ALM Joint Office Friedrichstr. 10 D-10117 Berlin Germany phone: + 49 (0) 30 – 206 46 900 fax: + 49 (0) 30 – 206 46 90 99 e-mail: [email protected] internet: www.alm.de

Responsible for contents...... Dr. Hans Hege Andreas Hamann

editors...... Andreas Hamann Birsen Turna

lecturer...... Birsen Turna

facts and figures...... TNS Infratest GmbH, Munich SES ASTRA, Luxemburg www.ueberallfernsehen.de, Hamburg Goldmedia GmbH, Berlin Nielsen Netview, Hamburg

design...... Rosendahl Berlin

With their report on digitisation, the German media authorities have been describ- ing the progress of digitisation in Germany since 2005 and could thus substantiate that digitisation has been continually growing year by year. In 2010, this trend is again clearly evident: More than 61 per cent of the German television households can access television via digital technology. With DTT and DSL-TV, consumers can select from two fully digital transmission infrastructures. Switchover for satellite is scheduled to be completed in two years‘ time under the ”klardigital 2012“ project, but even cable shows an upwards trend in going digital. The increased attraction exerted by digital television is certainly helped by the improved picture quality offered by HDTV and by more user-friendly flat screens with integrated receivers which offer considerable added value to consumers. In the current year, regulatory and technical arrangements were also initiated for a re-start of digital radio. The transition from analogue to digital transmission runs parallel to another development concerning digitisation: the convergence of broadcasting and the internet. The potential offered by this development presents a major challenge not only for regulators, but also for network operators, platforms, the receiver industry, content providers and – not least – consumers. The closed broadcasting world and the open world of the internet: What is happening with these systems which started from different positions but are now converging? Internet television is now also developing: Will it affect media consumption of viewers? The 2010 digitisation report describes and analyses these topical developments in its first section while part two presents the results of the surveys on digitisation.

Kommission für Zulassung und Aufsicht (ZAK) Commission on Licensing and Supervision ALM-Geschäftsstelle Friedrichstraße 60 D-10117 Berlin Germany