Digitisation 2008 Logue Transmission Being Switched Off, Has Still Not Been Achieved in 2008

The digitisation of TV transmission infrastructures is well under way. however, regarding cable and satellite, the major break-through which would allow for ana- Digitisation 2008 logue transmission being switched off, has still not been achieved in 2008. Terrestrial transmission, on the other hand, provides a different picture with ARD and ZDF planning to complete DTT roll-out and to switch off the last analogue transmitters Digitisation 2008 The question of the digital added value by the end of this year. new contents and how to fund them For all three traditional transmission platforms, a number of questions still await solutions. Cable still lags behind regarding the rate of digitisation. Broadband internet enjoys a wider focus of attention than digital TV. Plans for a satellite platform stagnate while concerning terrestrial transmission, the issue of the digital dividend has as yet not brought any satisfactory answers. Progress regarding the addressability of users is also rather unsatisfactory. While addressability is considered absolutely normal for IP-TV, classical transmission infrastructures still fail to make use of this feature in any major way. This is unsatisfactory especially for providers of new, innovative contents, making them dependent on the audience reach of addressable platforms. The question of funding new contents thus continues to be key for achieving the real breakthrough to the digital age.

The digitisation report which has now been made available for the fourth successive ASSOCIATION OF year describes the progress achieved for the various transmission infrastructures and REGULATORY AUTHORITIES (ALM) in its facts and fi gures section illustrates the current status of digitisation. Alongside Commission on the traditional transmission infrastructures, consumption of TV via the internet is Digital Access also analysed.

Gemeinsame Stelle Digitaler Zugang (GSDZ) der Direktorenkonferenz der Landesmedienanstalten (DLM) Commission on Digital Access c/o mabb Kleine Präsidentenstraße 1 10178 Berlin VISTAS VISTAS

Digitisation 2008

Preface 3

Thomas Langheinrich Dr. Hans Hege Chairman of the Directors’ Conference Chairman of the Commission on Digital of the regulatory authorities (DLM) Access of the regulatory authorities (GSDZ)

With its present report, the Commission on Digital Access in 2008 is continuing its progress, more and more viewers of the German regulators once more presents key data on connect their TV sets to set-top boxes, but more than half of digital switchover in Germany and outlines the opportunities the German households remain firmly set in the analogue and challenges to be faced by the digital world now and in world. Cable in particular appears to progress along the road the future. to digitisation with the handbrake fully pulled. Notwithstanding the progress of digitisation in Germany, its The report also outlines another phenomenon: Despite the effects and consequences are quite diverse. Daily soap op- fact that switchover into the digital world has been realised, eras such as “Marienhof” (PSB) or “Gute Zeiten, schlechte this does by no means mean that consumers will make thor- Zeiten” (RTL) still manage to maintain their popularity and ough use of the new opportunities that are now available continue to secure high viewing figures among their mostly to them as a consequence. A preliminary analysis of a study younger audiences who nevertheless, however, frequent the on the use of navigators commissioned by the Commission internet for other contents more and more and download on Digital Access of the regulators appears to indicate that contents in the form of video on demand services. Linear viewers use the electronic programme guide (EPG) mostly television via the world-wide web has still not really made an for zapping and less for planning their TV schedule of the inroad into media consumption – quite unlike online games evening or the next day. The printed programme magazine which increasingly adopt broadcast elements and may pose a thus still appears to be safe to stay for some to come. challenge to the traded perception of “broadcasting” from the Findings would rather indicate that some consumers simply legal viewpoint at some time in the future. transfer their viewing habits from the analogue to the digital Data loss or information gain as an area of tension in the dig- world without making real use of the new features and their ital world are also discussed in this report. While during the specific options. 1980s, people went to the roads to protest against public cen- A factor which must not be underestimated regarding the re- sus initiatives, privacy has now gone public. In the future, it luctance of viewers to go digital is certainly played by ease of will therefore be essential to enhance awareness of audiences use (or lack thereof) which users do not appear to sufficiently concerning the value of one‘s own data – this constitutes a take in. As long as using a receiver continues to present a vital part of media literacy which the German regulators have major challenge for the elderly or less technically interested been promoting and supporting for quite some time. consumers, the analogue world will continue to maintain its Irrespective of the increased promotion efforts of content attraction for this target audience. producers, service providers, the wholesale and retail trades and infrastructure providers, the message has obviously not yet reached consumers – this is also evidenced in the present report. Digitisation of the media and transmission platforms

contents 5 Contents

The question of the digital added value new contents and how to fund them

The unsolved challenge: digital contents and how to fund them...... 11 Dr. Hans Hege Moderate growth of digital households...... 11 The hen-and-egg problem: still unsolved ...... 11 Digitisation per se is no means in itself...... 12 Public value: added value for consumers and the growth of the media and communications industries...... 12 Digitisation is more than digital TV only ...... 13 Television will remain the lead media if it can fund creativity...... 13 For terrestrial transmission, switchover has worked ...... 14 The German route to the digital dividend has yet to be found...... 14 Digitisation via satellite – chances for a new approach...... 15 Cable remains the key infrastructure for the development of new contents – but investment is lacking...... 16 Key points for digitisation benefiting consumers and the media...... 17

Digitisation of the German television market: Facts and figures

Current state of digitisation in German TV households, June 2008...... 20 Andreas Hamann Objective of the GSDZ survey ...... 20 Digitisation on the go...... 20 Spread of modes of transmission remains stable...... 22 Digitisation of cable: still an uphill struggle...... 23 6 Contents

Digitisation in Europe – an overview...... 30 Christoph Limmer Almost 100 million TV homes are already digital ...... 30

Methodology...... 35 Definition of cable and satellite reception...... 35 Establishing transmission platforms and transmission technologies ...... 35

Commission on Digital Access...... 37 Remit ...... 37 Legal basis...... 37 Members of the Commission...... 38

The authors ...... 39

Glossary...... 40

Imprint ...... 44

9 The question of the digital added value new contents and how to fund them

11 The unsolved challenge: digital contents and how to fund them

Dr. Hans Hege and the rate is increasing rapidly. Actual use, however, is still so low by comparison to the traditional broadcast transmission routes that research Moderate growth of digital households into audience reach of IP-TV so far only provides In 2008, digitisation of transmission platforms figures for monthly use while no data are avail- continued with the share of households capable able regarding market shares or audience figures of receiving TV via digital transmission platforms for specific broadcasts as is the case for transmis- increasing from 39.9 per cent to 46.7 per cent. sion via the other infrastructures. The share of total The last terrestrial transmitters are scheduled to be viewing time can be assumed to be rather small, switched off shortly. The rate of digital reception but considerable rates of growth may be assumed via satellite has risen to 65.7 per cent, while the to be certain. most important mode of transmission, broadband cable, continues to lag far behind at 21 per cent, Analogue cable transmission continues to be the having increased its penetration by 4.8 per cent last most important way for TV to get to viewers, cur- year. rently still holding 39 per cent of households. As a consequence, it will still take some considerable time before analogue-digital switchover can The hen-and-egg problem: still unsolved be finally completed. To date, no analogue route The comparative stalemate regarding switchover of transmission supplying more than 10 per cent can be attributed to very specific causes: The added of households has been totally switched off any- value which digital television has to offer still does where in the world, nor are there any plans to do not appear to sufficiently convince consumers. It so yet. While switchover of terrestrial transmission is therefore necessary to analyse the causes of this is nearing completion, and satellite targets the year situation, and one of them is the persisting hen- 2010 for it, provided current developments contin- and-egg scenario: The range of digital programmes ue unchanged, cable as the most important trans- and services is still insufficiently attractive and does mission infrastructure is still miles – or years – away not convince viewers that switching to digital is from realising switch-off. worthwhile, while conversely it is very difficult to analogue cable switch-off fund attractive contents on a very small audience not in sight IP-TV now reaches approx. 0.3 per cent of house- base. holds via specific DSL networks. Access to TV contents via open broadband internet is now possible in around one third of German households, 12 The question of the digital added value

little chance for new digital Development of digital contents is still insufficient. of switch-off of analogue cable and satellite which contents The TV market and interest of audiences are con- made switchover of terrestrial transmission such a centrated on the channels which are also distrib- success with consumers. uted via analogue transmission, thereby hamper- Digitisation is no political objective per se. Con- digital reach not sufficient ing progress for digital innovations. The additional sumers do not care whether their TV services are for generating advertising public-service channels mostly resort to exploiting revenue transmitted in analogue or digital form. existing resources. Outside the premium range of The fact that the interests of the public differ in contents which includes feature films and sports, relation to the various transmission platforms has digital thematic channels can actually offer some for digitisation, the added been recognised far more clearly in other coun- value is key for consumers attractive niche contents; however, apart from the tries. The digital dividend of a public resource re- foreign-language services the added value remains sulting from freeing up frequency spectrum applies limited for the majority of viewers. As long as the only to terrestrial transmission. Both in the USA number of digital households paying for their TV and in the European Commission, analogue-digital consumption remains small, with service provid- switchover therefore largely deals with terrestrial ers being consequently restricted to advertising or transmission whereas developments regarding ca- merchandising for generating revenue, it will be ble or satellite are left to the market. We therefore rather difficult to provide more attractive digital have every reason to discuss switchover scenarios services to a small audience base in comparison to in a more specific way rather than assuming identi- the analogue sector where the starting conditions cal political objectives. were infinitely better. And for the younger audiences, developments in the internet which offers video platforms and social networks appear to be Public value: added value for consumers and far more interesting than any additional range of the growth of the media and communications digital TV services. industries A central public objective which must be pursued During the process of digitisation it has so far regarding all transmission platforms as only the not been possible to repeat the success Germany joint approach will provide the necessary econom- achieved in the roll-out of analogue transmission ic basis for new digital contents and applications is via cable and satellite; this formed the basis for ex- the added benefit or value for consumers and the panding media contents presenting an added value potential for growth of the media and communi- which convinced consumers and allowed the me- cations industries. dia industry to expand. German television and the transmission platforms are in a worse condition than could be assumed Digitisation per se is no means in itself when merely looking at the data regarding digi- Political commitments in favour of digitisation tisation. Digital terrestrial TV exclusively banks are easy to make and are repeatedly voiced in the on existing contents and hardly opens up any Forum Digital Media which is organised by the opportunities for new contents to develop. The Federal Ministry of Economics. Where the true in- overwhelming majority of digital set-top boxes in terests call for a different behaviour, they will not the market can only decode contents which are yield any effect. It is easy to debate about switch-off funded via advertising or licence fee income; as a scenarios at length, but to this day it has not been result, there is no basis for fees or a funding mix possible to find the right way to argue the benefits consisting of advertising and subscription revenues. By international standards, pay-TV operator Pre- 13 miere holds a small share in the market only while Digital TV channels targeting specific audience no innovative contents are available in Germany groups which can fill their 24-hour air time only which could compare to HBO or Canal plus. The by repeating contents a number of times could cable operators are combining channels into pack- largely be replaced by the internet in which every ages at a low overall price, but this finds little inter- fly-fishing enthusiast can easily find the contents est among viewers other than those interested in he is interested in for consumption at any time he contents from abroad. chooses.

Digitisation is more than digital TV only Television will remain the lead media if it can Digital broadcasting is losing out in the process of fund creativity digitisation overall. The transmission platforms for The opportunities offered by the new digital trans- broadcast contents still manage to hold the major mission modes will only be put to full use if they share in TV transmission, but broadband internet can be based on a wide range of digital broadcast can offer TV contents and entire TV channels in an transmission platforms and can in particular draw increasingly better quality, extending the times dur- on the creativity and power of innovation of televi- ing which consumers can watch a specific content sion. Attractive contents will remain scarce, profes- (this process is strengthened by the media libraries sional TV productions will not be simply replaced set up by the broadcasters to allow for catch-up by clips found on Youtube. It is therefore necessary TV). The internet also permits new forms of com- to establish the necessary framework to allow in- munication in social networks to be used which novations and new contents for digital television take up the most valuable resource, namely time. to be funded. Viewers gain further independence and supremacy Recycling existing programme resources via addi- new contents require new with the progress of digital storage even if this is tional transmission outlets has so far proven just as forms of funding often still based on analogue reception (most hard- little success in Germany as the attempt to charge disc or DVD recorders are analogue sets). more money for the existing services transmitted For consumers there will be a clear functional across a digital platform. separation of receivers for some time to come: the Digital TV will not gain in attraction merely large flat screen in the sitting room, the PC and the through the fact that the number of available chan- notebook, and now also the mobile phone allow- nels is increasing; DTT has rather shown that many ing them to watch moving images including TV viewers are satisfied with receiving just the major broadcasts at any time and in any place. channels. The challenge therefore remains to open However, the routes of transmission along which up digital transmission routes in such a way that these images get to consumers are becoming in- new contents and applications find sufficient fund- creasingly interchangeable. Video contents providing. ed in the internet can also be viewed on the TV set, Following an overview of the current challenges handheld phones can be used to watch a football faced by the various transmission platforms, some match transmitted via 3G, DVB-H or DTT. Con- approaches for solutions will be debated. tents downloaded at home can be put to mobile use, as the new, user-friendly receivers presented by Apple prove. Radio today is already facing the question there will still be a specific transmission platform or specific receivers for radio contents in the future. 14 The question of the digital added value

specific target groups are For terrestrial transmission, switchover The overall switchover to more efficient encod- reached via the internet has worked ing technologies which has to be effected in the The switchover of terrestrial transmission to dig- foreseeable future will present a challenge which is ital has preserved this transmission platform for similar to that of the analogue-digital switchover. consumers and turned the long-lasting decline of Unlike in the UK, spectrum capacities in Germany audience figures around. Acceptance of DTT ex- do not allow for simulcast operation in the old and ceeded all expectations. Flat screens with integrated the new encoding systems. DTT receivers, USB sticks, navigation devices and, HDTV which is transmitted via DTT in some most recently, mobile handhelds have enriched the states in Europe should not present an option to choice of reception. The research into audience be pursued in Germany as there are not enough reach which is based on the traditional modes of transmission capacities (see below regarding the reception operated by the television providers can- digital dividend). not keep up with developments, resulting in the At present, there are only few attempts to face up actual audience reach yielding only limited rev- to the foreseeable challenges. As long as new and enue for commercial service providers. successful approaches are not adopted for satellite HDTV is no option for Outside the major centres of population, there is and cable transmission, any major changes regard- terrestrial transmission no transmission of commercial TV channels via ing DTT are unlikely to happen. DTT, and even Halle/Leipzig and Stuttgart are not yet covered. The German route to the digital The success of DTT is based on the dominance dividend has yet to be found of free-to-air TV in Germany. The fact that more Unlike in other European markets, the commer- contents will be available against pay only in the cial operators in Germany never distributed their medium term presents a new challenge also for services via terrestrial transmission across the entire terrestrial transmission. More efficient encoding country, and public-service broadcasting is also less technologies, necessitating new receivers, could be dependent on terrestrial transmission. Rural ar- linked to optional addressability. Network opera- eas are covered via satellite without any surcharge tors could turn into platform providers which also while in many other countries satellite TV takes market services. the form of pay-TV. Terrestrial transmission has The concept developed by some commercial pro- lost its former function of supplying a basic range viders to encrypt DTT transmission may well be of services. Preference is given to the centres of redundant as a result of market developments. On population; this can be noted particularly clearly the other hand, DTT limits the options of any regarding mobile TV. business model banking on raising an additional The objective of securing a minimum TV sup- fee for the reception of freely available contents. ply for rural areas via broadcast spectrum which DTT requires new encoding In order to secure the future of terrestrial transmis- characterised the last century today must be as- systems and addressability sion it could be appropriate to transmit all addi- sessed differently: overcoming the digital divide as tional contents in a more efficient encoding system, a consequence of which rural areas are cut off from preferably DTT-2, and to take out an agreement broadband internet access. Broadcast frequencies with the receiver industry to ensure that all new might contribute to establishing the necessary in- set-top boxes are equipped for more efficient en- frastructure in a low-cost approach. Viewers pay- coding technologies and allow for addressability. ing for media libraries have the right to be able to make use of them, too. 15

Broadcast providers in Germany do not need the Digitisation via satellite – chances entire digital dividend; likewise, mobile telephony for a new approach providers are not dependent either on capacities It could be up to the TV providers to agree on a to an extent necessitating their demands made date for switching off analogue satellite television publicly to be unconditionally met. For telephony once audience reach has passed two thirds of satel- purposes, the spectrum allocated to the MSPs is lite households. And even if the added value does sufficient in the future, too. For the provision of not convince every viewer, the threshold would be broadband internet the obvious solution might be sufficiently low for the transition and the broad- new operator models based on jointly-used in- casters could achieve considerable cost savings. It frastructures. In the densely populated areas, the would be possible to jointly communicate, the benefit of larger cells does not apply as the large switchover adopting the campaign strategy used number of users require small-cell planning any- for DTT switchover. way. The internet puts into question the structures However, the plans for a basic encryption of satel- Digital dividend could be underpinning both broadcasting and mobile te- lite transmission and the resulting confusion as to used for rural areas lephony transmission. whether digital TV means additional costs for the The digital dividend offers the opportunity to ad- reception of commercial television services appear equately take into consideration the rural areas for to make such an agreement unlikely at present. the first time while both the procedures based on The regulators had already suggested some time telecommunications law and the designation of ago that the commercial broadcasting groups ex- broadcast transmission capacities have to date given plicitly forego any additional funding requirements preference to the centres of population since any for their main channels; any surcharges for HDTV extension of the infrastructures in rural areas could transmission would remain unaffected. As long as not be realised for financial reasons. this declaration does not come, neither the regulators nor politics will support the switch-off of What will matter in the future will no longer be analogue satellite TV along the model of the DTT the competition among telephony providers but switchover as they cannot be interested in any strat- access to the internet; the current model of various egies that run counter to the interests of consum- telephony infrastructures competing against each ers. Another factor is that SES ASTRA profits from other does therefore no longer have a future. Due continuing transmission via analogue capacities. to the scarcity of spectrum and the cost incurred it will not be feasible to set up an unlimited number The perspectives for digital satellite TV are further only a small number of of infrastructures; in rural regions, there will usu- hampered by the fact that only a small percent- satellite receivers features addressability ally be only one platform. This must result in the age of set-top boxes in the market feature address- same consequences which already dominated the ability. It has now become evident that the set-top planning of the DVB-H infrastructure: The in- boxes provided in the market including common frastructure to be established must be open for all interface are not supported by providers of pre- marketing operations. Competition will take place mium contents or the encryption systems they use, among applications and contents; access of content effectively turning them into zapping boxes. providers to the networks must therefore be se- The decisive criterion for the future development cured. of contents will thus remain an agreement on addressability, which must, however, be linked to an affirmation that broadcasters will not use this feature to charge for the transmission of the contents which are presently available without extra cost. 16 The question of the digital added value

Cable remains the key infrastructure As far as marketing is concerned, priorities can be for the development of new contents – seen to have shifted: Kabel Deutschland, for in- but investment is lacking stance, also markets broadband internet and teleph- cable must solve the issue The cable operators are not even prepared to sup- ony services independently from digital TV, and in- of the second set port pilot projects testing analogue-digital switch- vest appears to be focussed largely on winning new over as long as they have to worry that this might customers in these two sectors. As necessary and irritate their customers. The housing industry acts important as this may be, though, the reluctance of as a corrective force safeguarding the interest of cable operators to support new digital programme consumers. The difficulties in the process of digi- formats can be identified as the main reason for the tisation are further aggravated by the commercial fact that digital TV is not making any progress in broadcasting groups who receive additional fees Germany. Cable is the key infrastructure without for agreeing to their services being simulcast in which new contents cannot be refinanced. the digital cable. In addition, every television set The push for analogue television provided by can receive analogue cable TV while it has so far both commercial and public-service broadcasters not been possible to develop comparably simple became possible by public subsidies for the cable solutions for the reception via digital cable. Most networks. The success of cable TV in the USA is flat screen TV sets can now receive DTT, but not based on the investments of the cable operators digital cable. Encryption of services presents an ad- into channels which have now been established as ditional hurdle especially since European legisla- brands worldwide, from CNN to MTV. tion for fitting integrated TV sets with a common Such a success would not have been feasible had interface is practically hollowed out by the fact that the cable operators shown the same reservations no appropriate modules are available. The advan- vis-à-vis new formats which the German cable tage of analogue TV regarding the second or third operators currently hold against new ventures. sets disappears completely in the digital world as each set requires its own set-top box and most ca- The success of analogue cable TV in Germany is ble operators charge additionally for this service. also based on the fact that distribution of the service providers was initially subsidised. The key obstacle, however, is not the receiver issue as set-top boxes allow access at comparatively It is understandable that financial investors aim for reasonable terms, but the lack of attractive contents quick success as it can be achieved, for example, by for most cable households. marketing broadband internet connections. Pro- gramme development takes longer, but provides cable operators must The advantages of digital storage can also be used by agree on a framework for more sustainable success. consumers still depending on analogue reception. digital TV There is a high penetration of DTT and hard disk The regulators will continue to remind cable oper- recorders allowing for analogue cable reception ators who are in charge of the most important TV in the market. Should the introduction of digital infrastructure of their resulting responsibility and transmission and encryption be linked to a rights will build up the necessary pressure together with management system which deprives consumers of other parties of the industry needed for improving uses and services which they have come to enjoy the conditions required for new digital contents. in the analogue world, they will hardly consider Alongside the foreseeable consolidation resulting digitisation to present progress. A “digital added from the integration of the network levels, the ca- value”, however, is an indispensible prerequisite for ble industry is also dependent on public support. the “market-driven” analogue-digital switchover This should be granted only if the chances opened which has been often quoted. up by the process of consolidation are used not 17 merely for increasing profit margins but also put to use in the interest of improving the public value, i.e. for creating additional digital value. The cable networks in Germany continue to draw for their strong position on the option of adding the cost of the basic connection to the rent which can effectively be equated to fee funding. Operators supported in generating cash flow in this manner could act in a short-sighted way if they allowed themselves to be driven only by profit expectations.

Key points for digitisation benefiting consumers and the media The most relevant issues as seen by the regulators are summed up below: • The commercial TV groups must give up their intention to raise additional fees for digital distribution. • Agreements are required concerning the addressability of digital receivers for all transmission infrastructures, securing open technologies, foregoing excessive restrictions regarding use for consumers in connection with digital rights management. • Agreements are required concerning user- friendly receivers including reception of encrypted contents. • The market conditions for new digital contents must be improved via long-term investment options on the part of the platforms via cable, satellite, terrestrial and IP TV transmission. • A deadline for the switch-off of analogue satellite transmission must be coordinated. • New business models for the distribution of commercial TV services in HD technology via cable and satellite must be developed. • Equal opportunities must be ensured for regional contents with costs being divided up via central network structures. • Opportunities of personalisation should be used ensuring data protection and opening opportunities for anonymous use.

19 Digitisation of the German television market facts and figures 20 Facts and figures Current state of digitisation in German TV households, June 2008

Andreas Hamann During the survey, all TV sets (up to nine) in the household and all transmission platforms in use were analysed. As a result, a household may be Objective of the GSDZ survey counted for several modes of reception, resulting In June 2008, the Commission on Digital Access in sum totals exceeding 100 per cent when the conducted the fourth survey on the state of digiti- state of digitisation by mode of transmission is sation in Germany on behalf of the German regu- analysed. latory authorities (ALM). For this purpose, market research company TNS Infratest carried out inter- In the view of the ALM, progress of digitisation views with 6,000 households regarding their TV can be best documented in this way. reception, and in particular looked at the degree of On the ALM home page www.alm.de the market digital reception already achieved. In addition, the shares resulting from each household prioritising use of media contents consumed over the world- its mode of transmission can be downloaded from wide web and the familiarity with electronic pro- the chart report. gramme guides (EPGs) were analysed. The data gained on EPGs are used for a more in-depth study of consumer behaviour concerning naviga- Digitisation on the go In 2008, the share of television households in tors and EPGs which the regulators will present to Germany in which at least one digital television the public in the autumn of 2008. receiver is available in 2008 reached 46.7 per cent, The basis for the survey was formed by all house- an increase of 6.8 per cent over the previous year. holds with German or non-German viewers; this Some 2.7 million “new customers” went digital in corresponds to the German Satellite Monitor 2008; this was slightly less than in 2007 but con- provided by SES ASTRA which has been pub- firms the steady increase of digitisation. lished alternatively with the DLM survey every six months since 2007. In 2008, some 39.8 million For the progress of digitisation it is relevant that households made up the basis; of these, 37.28 mil- the majority of 17.4 million households, namely lion own at least one TV set. These TV households 14.4 million, are already fully digital while the underpin all following considerations. remainder of digital households also resorts to analogue reception alongside digital supply. 21

Looking at the degree of digitisation in relation to receivers, approx. 21.8 million of the total 51.2 million TV sets in the market were established to be digital in the survey; this corresponds to 42.6 per cent. As a rule, digital reception is via a so-called set-top box; however, receivers with an integrated digital tuner are becoming more and more wide-spread. Some 2.7 million of the 37.3 million households can watch TV on a PC or notebook with an integrated TV card (in 2007, the rate was 1.6 million). Another 129.000 households exclusively watch TV via the PC or notebook. In this report, however, the data for TV reception via the PC or notebook are not included in the analysis; as in the previous years it relates to reception via the traditional TV set.

Fig. 1 Digitisation in German television households

46.7 per cent of 38.6 television households have access 53.3 to digital television

32.3 8.1 60.1 7.6

2007

Basis: 37.277 million TV Households in Germany analogue TV reception only = 19.860 Mio. TV homes Source: GSDZ 07/2008 digital TV reception only = 14.401 million TV homes digital and analogue reception = 3.016 million TV homes 22 Facts and figures

Spread of modes of transmission remains stable In absolute figures, some 19.6 million households resorted As in the previous years, the ratio of the four transmission to cable reception while 15.7 million use satellite for TV platforms has remained largely unchanged. Just over half consumption. Terrestrial reception is available in 4.1 million (52.5 per cent) of viewers continue to receive television via households while some 100.000 households are customers of cable which thus still is the most important infrastructure DSL TV providers. for the broadcasting industry. Satellite comes a close second Compared to 2007m these data also show little change. One with 42.0 per cent. In this context it is worth noting that the reason for this could be that viewers are satisfied with the so-called satellite master antenna system (SMATV-CH) range of contents available via the transmission platform households are counted for cable reception in the present they use. Put in other words: Obstacles for a change have not survey (see Methodology section). Their number continues become any smaller, nor have incentives increased. to go down, in 2008 by 2.0 per cent compared to 2.3 per cent the year before. Terrestrial reception was stable at 11.1 per cent while DSL-TV reached 0.3 per cent. The sum total exceeds 100 per cent as some households use several modes of transmission for their TV consumption.

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

60%

53.7% 51.7% 51.8% 52.5%

50% 5.0% 8.7% 7.2% 11.0% 43.1% 42.0% 42.5% 42.0%

40%

16.7% 19.5% 30% 24.4% 27.6%

46.7% 44.6% 45.0% 20% 41.5%

26.4% 11.5% 11.1% 22.5% 10% 9.7% 9.2% 18.2% 4.4% 10.5% 14.4% 5.3% 9.9%

5.3% 3.9% 1.6% 0.6% 2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008

cable satellite terrestrial reception

Basis: 33.904 / 33.904 / 36.981 / 32.277 million TV households in Germany digital Source: GSDZ 07/2008 analogue 23

Digitisation of cable: still an uphill struggle Looking at the other networks, the renewed increase in the The survey shows that the rate of digitisation has increased most important infrastructure for broadcasting supply, how- for all modes of transmission (DSL-TV which is digital per ever, turns out to be clearly lower than DVB-S (65.7 per cent) se was not taken into account in this respect). However, or DTT (95.1 per cent, see Fig . 3). Focusing on the distribu- increases were higher for DVB-S at 8.4 per cent and DTT tion of transmission infrastructures in digital households, there at 9.1 per cent while DVB-C only reached a plus of 4.8 per- are now more digital cable households (23.6 per cent) than centage points. DTT homes (22.5 per cent). Digital cable has thus overtaken Since June 2007, an additional 900.000 households opted for DTT as regards the rate of digitisation (Fig . 4). digital cable reception. The rate of digitisation in the cable To date, cable has not been able to develop the dynamics networks, i.e. the rate of digital cable households in the total regarding switchover which characterised satellite or terres- of cable households, rose to 21.0 per cent, equivalent to 4.1 trial transmission. This is due to a number of factors which are million households. explained below. In part they also apply to satellite and terrestrial TV reception, but they exert a greater influence as far as cable is concerned. In the opinion of the German regulators, this is caused by the fact that viewers have to take an active

Fig. 3 State of digitisation by transmission platforms

100%

90%

80%

70%

60%

50% 95.1% 86.0% 40%

65.7% 30% 57.3% 57.1%

47.2% 45.6% 20% 38.8%

10% 21% 15.2% 16.2% 9.7%

2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008

cable satellite terrestrial transmission

Basis: 33.904 / 33.904 / 36.981 / 37.277 million TV households in Germany Source: GSDZ 07/2008 24 Facts and figures

decision to switch to digital cable. In the case of DTT, viewers contents and marketing are concerned, the cable operators are relieved of the decision due to the switch-off of analogue appear to anticipate considerable potential due to the situ- transmission while concerning satellite, customers basically ation in the telecommunications market. Unlike with the decide en passant: Since they need a set-top box anyway, the available pay-TV packages for which the quarterly reports list question of analogue or digital reception is less relevant, and no increases, it is still possible to generate extra turnover per in most instances, viewers will opt for the more powerful dig- customer with broadband internet and telephony services. ital box. Besides, there are hardly any analogue set-top boxes An analysis of the data by regions and level 3 network opera- to be had in the shops now. tors underscores the success of the increased marketing efforts Disregarding the take-over of Orion by KDG, there has been put up by Unity Media. In Hesse and Northrhine-Westphalia, little development concerning the consolidation of cable the share of digital cable households increased by a good 6 operators since the middle of 2007. The network operators percentage points compared to 2007. Some increase was also concentrated on refining their products and their market- reached in Baden-Wuerttemberg (Kabel BW) and the op- ing, putting particular emphasis on broadband internet and erating areas of KDG, but this remained at a clearly lower voice telephony services rather than increasing the number of rate. The survey differentiates between regions, not, however, services on offer or on improving reception quality. As far as between the various cable operators.

Fig. 4 Modes of reception in digital households

70%

60%

50%

40%

65.0% 61.8% 30% 61.1% 59.1%

20%

24.7% 23.0% 21.8% 23.6% 22.5% 10% 19.4% 17.2% 16.7%

2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008

cable satellite terrestrial reception

Basis: digital TV households in Germany Source: GSDZ 07/2008 25

Considering the larger range of contents available over dig- The matter of second and third sets is still unresolved as re- ital networks, this could drive switchover along. According gards cable reception (see Fig . 5). What makes cable recep- to the data contained in the ALM 2007 Yearbook, some 149 tion particularly appealing is the fact that each TV set in each national commercial TV or teleshopping channels were on room is connected to the antenna socket and can work on air at the end of 2007. They included 37 thematic channels the spot. In the digital world, a set-top box is necessary for and 72 pay-TV services. The majority of these contents are each receiver, and only a small number, usually in the higher available via digital reception only. All the same, for many ca- price range, offer an integrated set-top box. Viewers wanting ble customers analogue supply which ranges around 30 – 40 to receive a range of services with (basic) encryption require a channels, appears to be sufficient. Considering the fact that separate smart card for each set-top box. All of this means ex- viewers usually only watch around 10 services only (the tra costs and effort which does not exactly help a decision to so-called “relevant set”), this presents only little surprise. go for digital cable; this therefore has to be thoroughly con- A change might be brought about by corresponding market- sidered before analogue cable is switched off. After all, some ing pressure, but particular dynamics are unlikely to be forth- 26 per cent of households have more than one set used for coming considering the fact that the 10 channels account for cable reception. around 90 per cent of the market share.

Fig. 5 Reception via the three sets used most frequently

10.9% 16.4% 15.1%

27.3% 30.2% 32.9%

39.0% 33.7% 34.8%

16.0% 11.7% 9.6% 10.8% 8.7% 5.7% 0.4% 0.7% 0.0% Kabel Satellit Terrestrik Kabel Satellit Terrestrik Kabel Satellit Terrestrik

main TV set second TV set third TV set

Basis: 37.277 million TV households in Germany digital Main TV set: 37.277 million homes Source: GSDZ 07/2008 analogue second TV set: 10.833 million homes third TV set: 2.386 million homes 26 Facts and figures

Another factor to be pointed out is ease of use. In the digital Regarding terrestrial transmission, switchover to DTT has world, viewers have to deal with a larger number of serv- been almost concluded: 95.1 per cent of households receiv- ices without any user-friendly system of navigation being ing television through the air have already switched to DTT. available so far. In addition, changing channels takes longer, In all, some 3.9 million TV households (10.5 per cent) already and there are delays resulting from the conversion of digital use a DTT receiver. For some 2.4 million households, DTT signals. The latter can be seen during live broadcasts where constitutes the only mode of reception. Well over a third of analogue neighbours already celebrate a goal which the dig- DTT households also use this platform for their second and/ ital viewer has not even yet seen. or third sets. Digital satellite has continued its upward trend, with digitisa- The DTT network currently covers some 85 per cent of the tion rising by more than 8 per centage points compared to population (Fig . 6). Roll-out of the network and the resulting 2007, to 65.7 per cent, although the increase was less strong switch-off of the last analogue transmitters is scheduled to be than during the previous year (Fig . 3). As the share of satellite completed by the end of 2008. households went down slightly at the same time, digitisation The shares of DTT in the various regions (Fig . 7) confirm the in 2008 appears to have been primarily the result of satellite findings of recent years: It is markedly lower in areas where customers exchanging their analogue set-top box for a digital only public-service channels are available than in regions of- box. As already stated above, satellite consumers appear to find fering a wider choice including commercial channels. It is this easy as they are already familiar with the use of a set-top also worth noting that the share went up in the regions in box and a second remote control. The change also means that which the network was built up or extended. – at least to date – overheads remain unchanged since plans Regarding DSL-TV which in 2007 was analysed for the first for the encryption of satellite transmission have still not been time, no relevant changes could be established. So far, view- put into effect. Following a cartel investigation which lasted ers appear not to have accepted this new option to receive more than two years, Entavio has since let it be known that it TV. Uncertainties concerning availability and the handling would stop all activities in this respect. may have something to do with it. Furthermore, the three The majority of satellite boxes are still sold in the lower price providers seem to be banking more on their telephony and range, and are mostly unsuited for the reception of pay-TV. internet services in their marketing in Germany. Arcor and The share of free-to-air boxes for satellite reception is estimat- Hansenet offer their respective range of TV services included at around 60 per cent, making it more and more difficult ing all major channels at a surcharge of just under 10 Euros; to introduce new business models and refinancing options. this corresponds to the typical cost of cable reception. Regrettably from the regulators’ viewpoint, new contents Alongside the transmission infrastructures discussed above, the are therefore particularly unlikely to develop any economic 2008 survey for the first time also looked at the use of the viability. It is, however, important to note in this context that internet for watching moving images, analysing whether and encryption and the corresponding fees must not be used for how often live TV transmissions, free-to-air media libraries, raising a subscription for services which have thus far been video-on-demand services and so-called “Web 2.o services” without charge. Added costs for consumers must be equated were used. by added value. Some two thirds (66.7 per cent) of all German TV house- The biggest contributor to digitisation in Germany is satellite. holds currently have access to the internet, half of them (32.6 The number of digital satellite households continues to ex- per cent) with a bandwidth of 2 MBit/s or more. This trans- ceed the figures for DVB-C and DTT homes taken together. mission capacity has to be seen as the minimum required for The decline in the share of satellite reception in digital homes watching video contents without having to contend with (Fig . 4) only shows that the market situation for digital recep- long load or storage durations. tion is beginning to resemble that of the analogue world. 27

Fig. 6 DTT regions in Germany

Flensburg

Kiel Rostock

Cuxhaven Lübeck Aurich Hamburg Schwerin

Lüneburg Bremen

Hannover Berlin Potsdam Osnabrück Braunschweig Frankfurt/O. Bielefeld Münster

Düsseldorf Göttingen Cottbus Halle Köln Kassel Leipzig Aachen Flensburg Bonn Siegen Weimar Erfurt Dresden Koblenz Kiel Rostock Frankfurt/M. Wiesbaden Cuxhaven Lübeck Mainz Trier Aurich Hamburg Schwerin Würzburg Kaiserslautern Lüneburg Saarbrücken Bremen Mannheim Nürnberg Hannover Berlin Braunschweig Potsdam Stuttgart Osnabrück Regensburg Frankfurt/O. UlmBielefeld Münster Augsburg München Freiburg Düsseldorf Göttingen Cottbus Konstanz Halle Köln Kassel Leipzig Aachen Bonn Siegen Weimar Erfurt Dresden Koblenz Frankfurt/M. The range of services available variesWiesbaden from region to region. commercial and public-sector channels Status per July 2008 Mainz only public-sector channels Source: www.ueberallfernsehen.deTrier Würzburg Kaiserslautern Saarbrücken Mannheim Nürnberg

Stuttgart Regensburg

Ulm Augsburg München Freiburg Konstanz 28 Facts and figures

Web 2.0 is top of the sources for watching video contents in Contents available for downloading are also found in so- the internet. Almost a quarter (23.1 per cent, Fig . 8) of TV called video-on-demand portals such as Maxdome. As a rule, households download videos available from providers such as a fee is charged for the downloads, resulting in a clearly lower YouTube, MySpace, MyVideo, Clipfish and similar services, use with only 1.5 per cent of viewers questioned stating that certainly prompted by the wide choice, fast download times they had used such a portal for ordering a film. and flexible use. Some 11.9 per cent of the households go into TV stations transmitted as live-streaming services via plat- the internet at least once a week to access these websites. As a forms such as Zattoo, also enjoy only limited use. Around comparison, the Bavarian media survey “Funkanalyse Bayern” 4.3 per cent of TV households stated that they had accessed states that in Bavaria, 23.2 per cent of the population listen to contents provided via this type of infrastructure, a third of web radio at least once a week. them at least once a week. Some 10.0 per cent of households access media libraries in Summing up the data it can be stated that the linear world of which contents are available following broadcast while just television has not yet fully migrated into the internet where under 3 per cent of viewers access them at least once a week. on-demand contents hold the clear lead.

Fig. 7 DTT reception in the DTT core areas

16.8% 15.6% 14.9% 14.8% 13.4%

8.2% 5.7% 4.5% 4.6% 4.3% 3.2% 2.4%

Baden- Bavaria Berlin, Hamburg, Hesse Mecklen Lower Northrhine- Rhineland- Saxony Saxony- Thuringia Wuerttem- Brandenburg Schleswig- burg-Western Saxony, Westphalia Palatinate, Anhalt berg Holstein Pomerania Bremen Saarland

million TV homes DTT Basis: 37.277 million TV households in Germany Source: GSDZ 07/2008 29

In order to gauge the significance of contents transmitted via the internet for the formation of opinion, a more detailed analysis would be required to establish which contents are used and, in particular, what the duration of the use is.

Fig. 8 Video services available via IP-TV

23.1%

11.9% 10.0%

4.3% 2.7% 1.2% 1.5% 0.3%

user-generated contents media libraries TV contents broadcast live via the video-on-demand internet

use in TV homes used once Basis: 37.277 million TV households in Germany used at least once a week Source: GSDZ 07/2008 30 Facts and figures Digitisation in Europe – an overview

Christoph Limmer source of TV supply for some 14.4 million households. IP- TV formed the reception infrastructure for some 3.8 million households. Almost 100 million TV homes are already digital Digital TV in Europe is gradually coming of age. At the Market developments were impacted in their dynamics by beginning of 2008, more than 40 per cent of TV households the wide variety of contents and applications available; the (98 million) already used a digital infrastructure (satellite, ca- effect differed, however, in the individual countries. Whereas ble, DTT or IP-TV)1. Compared to the previous year, the fig- especially in the UK and in the Nordic countries the major- ure went up by more than 17 million households. Use of the ity of TV households have already gone digital with rates of various digital transmission platforms in the various regions growth slowing down correspondingly, increases in almost all differs widely. While TV households in Western and Southern states of Eastern Europe reached almost 3-digit figures. Europe as well as in the Nordic countries can chose between In Germany, digitisation reached 42 per cent at the beginning all four modes of transmission, digital reception in Eastern of 2008, thereby averaging developments in Europe overall as Europe and Northern Africa is concentrated on satellite TV. well as regarding growth of digital TV at 23 per cent. Digitisa- The majority of TV households resorted to satellite reception tion of the various transmission platforms differs; cable still has at the beginning of 2008 with around 58 per cent or just un- the longest way to go. der 57 million European TV households primarily watching Concerning cable, the Netherlands to the west of Germa- digital TV transmitted via satellite. Compared to 2007, the ny are facing similar challenges. Here, too, not even half of rate rose by 8.3 million households or 17 per cent. How- the households can receive digital TV via the cable networks ever, DTT could also score considerable rates of growth in which were constructed during the 1980s and since tech- use over the period investigated. The number of households nically upgraded for digital transmission. In the greatest ca- watching TV via DTT went up from just under 18 million ble market in Europe with 85 per cent of homes (6 million) at the beginning of 2007 to more than 23 million a year later. receiving TV via cable, digitisation of the networks is less than Third position is held by cable reception which was the main 30 per cent whereas terrestrial and satellite transmission in the Netherlands are already fully digital. The UK is often quoted as the prime example of a successful approach to digitisation. Some 8 out of 10 British households now receive digital TV, with satellite transmission being exclusively digital already, and digital cable reception nearing 100 per cent. Among the digital platforms, BSkyB includ- 1 Source: SES ASTRA Satellite Monitor 31

Fig. 9 Digitisation in Europe

100% 19.8

90%

1.4 80%

70%

11.7 60% 17.4

98.0 2.8 50%

40%

30%

20%

2.7 10%

UK Finland France Germany Netherlands Ukraine Europe Romania

million TV homes DSL-TV Source: TV homes DTT Source: SES ASTRA satellite monitor digital satellite digital cable 32 Facts and figures

ing its pay TV services SkyDigital via satellite and Freeview For the approx. 5 million households still resorting to ana- (digital terrestrial television) are top. A closer look at pay- logue terrestrial reception, DTT will in the future also in- TV shows that the trend towards additional premium-range clude Freesat as another free-to-air digital platform. Freesat is contents continued and consolidated during the last year. a joint initiative of the BBC and ITV which saw a successful At the start of 2008 Sky announced that more than 3.1 million launch in May 2008 after some delay. The service is transmit- users of digital video recorders (PVR) and more than 400.000 ted via satellite and provides not only some 80 channels, but households had already opted for high-definition television also a choice of HD contents without any additional expendi- (HDTV)2. ture for consumers. A large number of free digital contents, an attractive range of pay-TV services and switch-off dates for the analogue signals during the period 2008-2012 clearly communicated to viewers will most likely put the UK in the pole position among the major European markets boosting fully digital television supplies. 2 BSkyB Quarterly report per 31 December 2007, see www.sky.com

Fig. 10 Digitisation of TV households

Source: SES ASTRA satellite monitors > 60% 40–60% 20–40% < 20% 33

In the Nordic countries, too, and especially in Sweden and the maximum technical reach of 99.9 per cent3 in combina- Finland, full digital coverage is also only a matter of time. In tion with attractive contents were the key factors contributing both countries, two out of three households already use dig- to the success of digitisation. ital reception. This progress will be enhanced by contents now Looking at mainland Europe, the French market showed being provided via IP-TV and widely available DTT services. some specifically interesting developments during the last year. In this context it is worth noting that Finland enjoys a special The two pay-TV platforms CanalSat and TPS consolidated in position regarding DTT. At the start of 2008, half of the 2.2 2007, and are now providing a joint range of services which is million households already used DTT as the primary source available via satellite, IP-TV and to some extent also via DTT. of reception, thus putting the country in the lead in Europe. The decision to make digital television available both free-to- Similarly to the UK, clearly communicated switch-off dates, air as well as pay-TV matched the strategy already adopted

3 www.digitv.fi

Fig. 11 Digital TV market within the ASTRA footprint

100%

80%

60%

40%

20%

year-end 2003 year-end 2004 year-end 2005 year-end 2006 year-end 2007

Source: SES ASTRA satellite monitors digital cable digital satellite IP-TV DTT 34 Facts and figures

elsewhere in Europe such as in the Netherlands or Sweden. And despite the fact that the introduction of DTT was started later than in the UK or in Germany, some 6 million TV sets were already supplied via DTT at the start of 2008. IP-TV was also quite successful over the last 12 months. The com- bination of attractive triple-play packages (internet, voice telephony and TV contents) provided across high bandwidths at reasonable prices resulted in 2 million households exclusively using the internet for TV reception. This is the highest rate anywhere in Europe. Additional new services such as M6 or TF1 supplied in HD technology via DTT and TNTSAT allow for the 18 digital terrestrial channels being also offered via satellite, providing more than 12 million analogue households with an attractive alternative for going digital over the coming years either free- to-air or as a pay service. The largest rates of growth, however, can be observed in the countries of Eastern Europe. They are attributable to the increased number of attractive services available for viewers on the one hand, and the greater need for catching up with digitisation elsewhere in Europe as the majority of homes in the past could watch only analogue TV since digital alterna- tives were in scant or expensive supply only. Typical exam- ples of this development can be observed in Romania or the Ukraine At the start of 2008, five pay-TV platforms offered contents via satellite in Romania, reaching a total of 1.5 million TV households. At the beginning of May, the first pay-TV platform in Ukraine took up operation, with two further platforms planning to get into the market by the end of this year. Digitisation will continue to dominate the public and political debate as the majority of the 240 million TV households in Europe still watch TV via analogue signals. The largest efforts, and consequently the greatest potentials continue to be available in the countries of central and Eastern Europe, but in the German-speaking countries (Germany, Austria, Switzerland), some 25 million households also still await digitisation over the coming years. 35 Methodology

The GSDZ survey was conducted with computer-assisted Definition of cable and satellite reception telephone interviews (CATI) on the basis of the telephone Television sets connected to a satellite master antenna system random sampling system used by the “Arbeitsgemeinschaft (SMATV) which require no separate receiver are counted der deutschen Marktforschungsinstitute” (association of Ger- as cable reception. In these households, the high-frequency man market research institutes, ADM). The interviews were satellite signals employed for transmission are converted for held during the period 29 May – 02 July 2008. The survey transmission in the low-frequency SMATV cable network. was carried out by TNS Infratest MediaResearch on the basis The range of services available is pre-defined as is the case of the questionnaire based on the 2007 GSDZ survey and for customers supplied by level 3 network operators. Satellite incorporating a number of elements and questions of the reception therefore only comprises television sets using a sat- German Satellite Monitor of SES ASTRA. By aligning the ellite receiver. The rationale behind this definition is that the survey instruments, a better comparison of the data obtained survey was devised to analyse reception from the viewpoint in the surveys could be achieved. of the television households. The overall population basis for the survey was represent- ed by all German-language private households in Germany. Establishing transmission platforms and transmission Since the 2007 survey, the projection has no longer been technologies based on the German households, but also includes house- For each of the television sets in the households investigated holds of non-Germans, resulting in a total of 39.77 million (with up to nine sets being counted), all available transmis- households. Of these, 93.7 per cent (37.28 million) own a sion platforms were analysed. Households receiving both ter- television set, forming the basis for the presentation of results. restrial and satellite services with the same set were included The survey was based on a net number of 6,000 interviews. in both transmission categories for the analysis of television In each case, the interview was conducted with the person reception in the homes. As can be seen in Fig. 2, in some cases in the household stating that they knew best about television this can result in a sum total exceeding 100 per cent. Not consumption and reception in the household. included in the analysis are the 2.9 million PCs which can receive television. The 6,000 interviews were conducted disproportionately in order to warrant a sufficiently sound basis for each German In the analysis of the transmission technologies (analogue or state. In Northrhine-Westphalia, Hesse, Baden-Wuerttem- digital), cable reception forms an exception: Television house- berg, Bavaria, Mecklenburg-Western Pome¬rania, Saxony, holds with cable reception using a television set which is con- Saxony-Anhalt and Thuringia, 500 interviews each were car- nected to a digital cable receiver tend to use the receiver for ried out. In Lower Saxony 350 interviews were conduct- reception of digital pay-TV only. The services available free- ed while in Schleswig-Holstein, Rhineland-Palatinate and to-view are usually watched in analogue transmission mode. Berlin 300 interviews each were held. 200 interviews each As this form of simultaneous analogue and digital reception were conducted in Hamburg, Saarland and Brandenburg. In does not exist for satellite distribution or terrestrial transmis- Bremen, 150 households were interviewed. This dispropor- sion, all cable television sets with a digital receiver are counted tionality was balanced later on during weighting. as digital receivers for the benefit of uniform presentation.

commission on digital access 37 Commission on Digital Access

Remit Legal basis When this report on digitisation was published, the 1oth amendment to the Inter- Until 31 August 2008, the activities state Broadcasting Treaty had entered into force, reforming the cooperation of the of the Commission on Digital Access German regulators. As a consequence, the Commission on Digital Access (GSDZ) (GSDZ) of the Directors’ Conference was dissolved in its old form with effect from 31 August 2008. Starting in Sep- of the German regulatory authorities tember 2008, platform regulation, capacity allocation as well as aspects concerning (DLM) were based on section 53 of the digital access are now dealt with by the Commission on licensing and supervision Interstate Broadcasting Treaty and the (ZAK) of the regulatory authorities. The commission decides issues concerning joint statute on the freedom of access non-discriminatory access of navigation or encryption systems by majority vote; to digital services of the regulatory au- the decisions are binding for the regulatory authorities putting them into effect. thorities of 13 December 2005 which The issues are to be coordinated by a representative (“Commissioner”) and analysed entered into force on 1 August 2006. for the Commission by working groups in the same successful way as to date. The GSDZ was set up on 5 December The regulators will thus continue to act as competent partners for the industry, poli- 2000 and met for the first time in Mu- tics and regulation concerning all aspects of digitisation and related developments. nich on 19 December 2000. Over and above their decision-taking competences, the regulators will also provide The 10th amendment to the Interstate advice on the structure of the process of digitisation overall. They will cooper- Broadcasting Treaty which entered into ate with the Federal Network Agency (BNetzA) concerning issues such as non- force on 1 September 2008 deals with discriminatory access of technical platforms for digital reception, fees and tariffs for platform regulation in Part IV. On the the transport of broadcast contents in a coordinated procedure. The regulators will basis of the amended section 53, the ensure freedom of access, thereby securing the plurality of opinion by providing German regulators will develop a re- expertise in cartel-related procedures and moderating agreements between the vari- vised statute on platform issues which ous partners in the market and the industry. Another focus of their activities will be is scheduled to enter into force by the centred in the legislative processes for the regulation of digital broadcasting. beginning of 2009. In the near future, user friendliness of navigators and EPGs, the enhanced analogue- digital switchover of the cable networks, safeguarding interoperability of set-top boxes and the further progress of digital terrestrial transmission of broadcasting will dominate the agenda. 38 commission on digital access

Members of the Commission per July 2008

Dr . Hans Hege, Chairman Medienanstalt Berlin-Brandenburg (mabb)

Martin Deitenbeck, Chairman of the Technical Conference of the German regulators (TKLM) Sächsische Landesanstalt für privaten Rundfunk und neue Medien (SLM)

Thomas Fuchs Medienanstalt Hamburg / Schleswig-Holstein (MA HSH)

Martin Heine Medienanstalt Sachsen-Anhalt (MSA)

Dr . Uwe Hornauer Landesrundfunkzentrale Mecklenburg-Vorpommern (LRZ)

Prof . Dr .Wolf-Dieter Ring Bayerische Landeszentrale für neue Medien (BLM)

Prof . Dr . Norbert Schneider Landesanstalt für Medien Nordrhein-Westfalen (LfM)

Prof .Wolfgang Thaenert, Europabeauftragter Hessische Landesanstalt für privaten Rundfunk und neue Medien (LPR Hessen)

Prof . Dr . Hubertus Gersdorf, externer Sachverständiger Professorship for communications law of the Gerd Bucerius Foundation at the University of Rostock, external expert

Office Andreas Hamann, managing director Landesanstalt für Kommunikation Baden-Württemberg (LfK) the Authors 39 The authors

Andreas Hamann managing director of the GSDZ, member of staff of the Landesanstalt für Kommunikation Baden-Württemberg (LfK).

Dr . Hans Hege Chairman of the Commission on Digital Access (GSDZ) and Director of the Berlin-Brandenburg regulator (mabb)

Christoph Limmer member of staff of SES Astra satellite operator in Luxemburg since 2003, head of market development including market research since 2007. 40 Glossary Glossary

API (application programming interface) digital dividend software interface in a set-top box allowing applications to be transmission spectrum freed up as a result of digitisation, as programmed digital transmission of contents takes up less frequency capacity than analogue transmission. basic encryption encryption of all contents transmitted via one transmission DMB (digital multimedia broadcasting) platform to allow access for entitled users only. standard for the transmission of multimedia contents to mobile handheld devices featuring small displays (maximum 8 bouquet inch screen diagonal), see also t DVB-H bundle of programmes and/or services (e.g. t EPG) DMB is a standard for mobile TV reception on handheld de- broadband vices (t mobile phones). It employs the same frequency block The BITKOM association sets the transmission rate at 384 grid (1.5 MHz) and transmission technology (COFDM) as kbit/s. DAB. For video and audio encoding, however, t MPEG-4 is used while the audio encoding mode for DAB is effected via CA (conditional access) MPEG-1- layer II. encryption system: In the case of DTT, the transmission signal is scrambled according to the Common Scrambling algorithm DSL (digital subscriber line) and fitted with electronic key terms while on the receiver side, telephone line used for high bit rate transmission. ADSL: it is unscrambled using a conditional access module (CAM) asymmetrical digital subscriber line. Data rates in the down- and a smart card. The CAM can be embedded in the receiver link are up to 6 MBit/s; ADSL2+ up to 20 MBit/s. VDSL: or can be integrated on a plug-in card for the t CI. very high bit rate digital subscriber line: up to 50 MBit/s in the downlink. CI (common interface) standardised interface via which a conditional access module DSL-TV (CAM) in the form of a plug-in card can be inserted into the DSL-TV transmission of contents and telemedia services via set-top box. wired DSL networks. Transmission is based on the internet protocol (IP); the term “IP-TV via DSL” is therefore equiva- CI+/CI-2 lent to DSL-TV. successor system to CI implementing a better form of copy protection. Not yet standardised. 41

DSL networks are comparable to traditional cable networks MPEG-2, MPEG-4 in that they are accessible only for closed user groups against data compression standards for television signals. In the subscription and the content provider offers only a pre-de- MPEG-4 mode, only half the bit rate necessary for MPEG-2 fined, limited range of TV contents or telemedia services. encoding is required. As a system-inherent feature, each customer point is connect- navigator ed to the point of delivery for the TV and telemedia services system indicating and starting digital programmes based on of the network, and provides a return channel. This allows for service information (SI) transmitted in the DTT transport the definite addressability of the user. In addition, interactive stream. applications can also be realised at acceptable cost. set-top box (STB) DTT-2 receiver device for digital television. For the various transmis- successor standard to DTT, aiming in particular at more sion platforms (satellite, cable, terrestrial, DSL), different types efficient encoding and allowing for encryption. of set-top box are required.

DVB-H (digital video broadcasting for handhelds) simulcast standard for the transmission of multimedia contents to hand- simultaneous transmission of contents (programmes, services) held receivers with small displays (maximum 8 inch screen of the same type on different platforms (e.g., analogue and diagonal); see also t DMB. digital cable). DVB-H is a transmission standard for TV reception on handhelds, using the same channel grid (7 MHz or 8 MHz) and SMATV satellite master antenna system using multiple satellite and transmission technology (COFDM) as DTT. Data reduction, broadcast cable signals to create a single integrated cable sig- however, is effected via t MPEG-4 while DTT employs nal for distribution to a cabling network for several flats or MPEG- 2 for data reduction. houses. EPG (electronic programme guide) electronic programme guide, an application allowing search triple play Simultaneous supply of broadcast contents, internet access and selection of digital TV services in the form of an “elec- and telephony services. tronic” TV magazine. WiMAX (world-wide interoper- HDTV (high-definition television) high-resolution technology using a 16 : 9 aspect ratio and a ability for microwave access) technology for microwave regional data networks of up to 50 minimum rate of 1280 x 720 = 600 pixels (full HD: 1920 x km range and bit rates of up to 1150Mbit/s; direct competitor 1080 pixels). to t WLAN and t DSL. IP-TV (internet protocol television) television delivery using the internet protocol. The term WLAN (wireless local area network) radio-based local data network featuring bit rates of up to 100 does not, however, specify the network used for transmission, MBit/s or more. necessitating additional data, e.g. IP-TV via DSL. mobile TV transmission of multi-media applications to handheld devices with a maximum 8 inch screen diagonal. The sets are also called handhelds. 42 Glossary

44 Imprint

Published by:...... Gemeinsame Stelle Digitaler Zugang (GSDZ) of the Directors‘ Conference of the German Regulatory Authorities c/o medienanstalt_berlin_brandenburg (mabb) Kleine Präsidentenstraße 1 D-10178 Berlin phone: + 49 (0) 30/264 967 0 fax: + 49 (0) 30/264 967 90 e-mail: mail@ digitaler-zugang.de internet: www.digitaler-zugang.de Association of German regulatory authorities (ALM) internet: www.alm.de

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

Facts and figures ...... TNS Infratest GmbH, Munich SES ASTRA, Luxemburg

Design...... Rosendahl Grafikdesign, Berlin

Gemeinsame Stelle Digitaler Zugang (GSDZ) der Direktorenkonferenz der Landesmedienanstalten (DLM) Commission on Digital Access c/o mabb Kleine Präsidentenstraße 1 10178 Berlin VISTAS VISTAS