July / August / September 1996. Vol. III, No. 8 Sequentia A quarterlymagazineoninformationsourcespublishedbytheEuropeanAudiovisualObservatory h introduction The of digital nEurope in TV productions and multimedia audiovisual in international Problems ofsocial law Editorial

Digits and divinity In the beginning there was the sprocket hole, technology muttered in my ear as I stepped off the and as simple believers we saw the light projected platform “You’ve stolen my line, I agree completely”. at twenty-four frames per second. The messages Of course, digital processing is a wonderful enabling could be carried to all corners of the earth and, until process. But like so many current developments, it the almighty McLuhan pointed out that the medium is important that we do not lose our heads and be- was the message, we were content. But no longer. come besotted with the idea as if nothing else Our divinities are scattered across a wide mattered any longer. We must try to preserve a divide, from digital disks to Disney dreamlands, sense of proportion. from virtual reality to virtually anything. Thus interactive television, liberation for the passive The technology roller-coaster is getting faster and viewer. For all its promise, it has yet to become a perhaps more exciting, but also increasingly money-spinner. And after their initial love affair, it dangerous. Ignore these developments at your peril, is by no means sure that viewers do wish to change yet be wary of the burnt-finger syndrome. their roles as couch potatoes, inactive rather than Rational business thinking says that many of the interactive. new gizmos make inescapable common sense The problem in part, let me confess, is those dam- conditional access, Video , digital ned media journalists. And the conference organi- compression, the vast landscape ahead on the sers. Guilty. And guilty superhighway. But should we pause and reflect a again. We have our little on where this mad media rush is taking us? Are roles, hopefully in we becoming slaves to technological developments, keeping the audiovisual afraid of accusations of being Luddites? business informed, up to date with the latest Digital television is a prime example of the problem. developments, alive to The media world is currently in a swirl of excite- the things that may ment over digital technologies, the advantages of affect the fortunes of which are indisputable. However, the suffocating everyone in the indus- effects of overkill are worry enough with 30, 300 or try. But in our earnest- 3 000 extra satellite channels, even if there is a ness never to leave a belief that this will benefit the viewer by providing a stone unturned in greater choice (or a dilution of resources to the searching for news, point where quality programming becomes a distant information, data, even memory). © D.R. the views of opinion leaders (for example at conferences), perhaps There is, however, another aspect of digital techno- unwittingly we raise the temperature of expecta- logy that is rarely considered, if recognised at all. tion, opportunity, even fear. The popular press has been hailing digital television as “better quality”, which is unqualified nonsense. In the offices of Screen Digest, we do have our own What non-technical journalists have failed to squabbles over such issues, with the chairman often understand is that digital processing merely allows trying to be devil’s advocate in challenging some of things to be done that could not be done with ana- these developments – even in the technologies we logue signals at levels of acceptable quality. But the daily use as writers on the media. Much as the com- end result is unlikely to match the standards of puter buffs will say that printed matter is ink quality that analogue can achieve in its straight, smeared on dead trees, my own cynical view is that broadcast mode. e-mail is unseen messages in dead letter-boxes out of sight, out of mind (personally, as long as I do not Digital is trying to get something for nothing; some- need a message as a computer file, I much prefer to thing must go when removing bits of information have it on a piece of paper that announces its arrival that make up the complete picture. With some with the whirr of the fax machine). nervousness, not being an engineer, I offered this Tongue in cheek perhaps. But the moral, I hope, is view when speaking at a recent conference of the clear. Technology does not solve problems, only British Cinematograph, Sound and Television facilitates their solution. And often it defines pro- Society an organisation well-populated with tele- blems for solution when previously we were per- vision technicians. It was a great relief when the fectly happy as we were. speaker who followed me a leading Hollywood by John Chittock, special effects supervisor immersed in digital Chairman, Screen Digest.

Coverphoto: © D.R.

Sequentia • Published by the European Audiovisual Observatory / 76, allée de la Robertsau / F-67000 Strasbourg / Tel. (33) 88 14 44 00 / Fax (33) 88 14 44 19 / e-mail: [email protected] • Editorial Chairman and Publishing Director: Ismo Silvo • Editor: Lone Le Floch-Andersen • Editorial Board: André Lange (statistics and market information), Ad van Loon (legal information), Lone Le Floch-Andersen (production, financing and distribution) and John Hunter (multimedia and IT) • Secretariat and co-ordination of translations: Valérie Haessig • Layout: Thierry Courreau • Typesetting: Point à la ligne • Printing: Finkmatt Impression • ISSN 1025-546X • Published quar- terly • Copyright of the European Audiovisual Observatory. Not to be reproduced without the formal authorisation of the EAO. Subscription rates per calendar year: 200FF (western Europe and non-member countries) / 100 FF (eastern Europe). All prices are tax exempt • URL http://obs.c-strasbourg.fr/sequentiamain.htm • Subscription manager: Anne Boyer, A.Boyer@obs;c-strasbourg.fr.

External contributions for this issue: John Chittock (Chairman, Screen Digest), Mr Jean-Luc Renaud (Editor of CD-Info and ATM), Mr Giles Fontaine, Mr Jean Dacié and Ms Laurence Ouzon (IDATE), Mr Arnaud Gerber (European Institute for the Media), Mr Augusto Preta (Italmedia), Ms Marie-Madeleine Krust (consultant, ADAMI, France), Mr Gerrit te Spenke (KPMG Meijburg &Co, Netherlands), Mr Stephan Verhulst ( IMPS School of Law, University of Glasgow), Mr Jean-Pierre Lartigue (Vision 1250) and Dr André Lange (Market Information Expert, European Audiovisual Observatory).

We kindly wish to thank: Ms Helga Schmid (European Institute for the Media), Mr Richard Patterson, Mr Peter Todd and Ms Tessa Forbes (British Film Institute), Dr Ismo Kossonen (Special Government Adviser, Ministry of Transport and Communications), Ms Virve Indrén (Minsitry of Education, Finland), Ms Eva Harrie and Ms Ulla Carlson (NORDICOM), Ms Christian Matzen (Scientific Editor, Hans Bredow Institute), Ms Judith Steilnach (ORF), Ms Patricia Hadjisotiriou (Press and Information Office, Ministry of Interior, Cyprus), Mr Farrel Cocaran ( RTE and Dublin City University), Mr Jens Cavallin (Swedish Council for Pluralism in the Media), Mr Paul Katzenberger (Max Planck Institute), Mr Ben Keen (Editor, Screen Digest), Ms Carla Armez Dizoz (Federal Bureau of Statistics, Switzerland), Cine and Téléinforme (Spain), Ms Andrea Schneider (Europäisches Medienrecht Institut, Germany) and Mr Frédérique Pinard (trainee, European Audiovisual Observatory). © D.R.

2 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 Dossier

The introduction of digitalTV in Europe

Digital technology currently operates major changes in the structures, economy and working procedures in the audio- visual sector in Europe and, in particular, in the field of broad- casting. This issue of Sequentia aims to give an overview of the possible effects on various market seg- ments (satellite and terrestrial) of the introduction of digital tele- vision. These analyses offer varying views on the subject and represent the opinions of the authors and not necessarily those of the European Audio-

Dossier 3–15 visual Observatory. In addition, we have compiled Digital TV an extensive overview of the different digital TV projects and Digital terrestrial • packages which are or will television be available in the near future. • Digital television: This overveiw is completed by actors and strategies articles on the national situation • Digital television in member countries such as in Italy Italy and the United Kingdom. • Legal steps towards The contribution of digital tele- digital TV in the UK vision and its effect on the cable TV industry in Europe, which was • A profusion of packages for planned to appear in this issue European television will appear in Sequentia No. 9 (September / October / Novem-

Rules of the game 16 –19 ber to be published 25 Septem- ber). • Problems of social law Lone Le Floch-Andersen, in international Expert and Editor of Sequentia. audiovisual and multimedia productions • International tax issues facing the European audiovisual industry

Publications 19 Digital TV

Digital terrestrial television

Until recently, the advent Trials are under way elsewhere A way of resolving the dilemma of digital television has usually as well. The United States took whether to go digital terres- been associated with satellite the lead in developing a terres- trially or via satellite is to pre- and cable delivery. With all the trial digital broadcast trans- tend that one is not actually talks dominated by the Inter- mission system initially dealing with an “either-or” net, video-on-demand (VoD) designed for HDTV. This work proposition, but that both trials and the launch of some was conducted under the transmission means are com- forty satellite digital broad- auspices of the Grand Alliance, plementary to each other. It casting ventures world-wide, which has now decided one may be true in the short term, the days of terrestrial broad- standard. The Washington DC, but it may not be the case in CD-info casting appear numbered. local TV station of the NBC the long term. Satellite digital network has just been selected broadcasters may be the first to Satellite broadcasters may be Launched in January 1993, to showcase digital HDTV operate beginning 1996-1997, first to go digital, but terrestrial CD-info has established itself broadcasts using the new US but terrestrial digital TV will broadcasters are no longer far as one of the leading indepen- terrestrial standard. eventually be deployed around behind. As a matter of fact, dent newsletter covering the the years 1998-2002, because projects abound. Australia was waiting on the creative side of the compact of inherent advantages. The disc-interactive and associated conclusion of the standardisa- question is therefore what fields such as video CD and tion process underway in the National projects will become of satellite Digital Video Disks. US and Europe to go ahead broadcasting for advertising- Most other multimedia publi- In August 1995, the UK became with digital terrestrial tele- supported and subscription- cations concentrate on the the first European state to vision. That is a key theme of based services when the hardware/technology side of bring forward proposals to the first major report on the 5-year window of opportunity the business. Virtually alone, introduce digital terrestrial subject from the Australian will start to close. CD-info is the rallying point television in the UK from Broadcasting Authority, which for the software/programming 1997. Initial proposals were set community. has spent the past year out in the document Digital canvassing the opinions of Geographical coverage CD-info answers these ques- Terrestrial Broadcasting - relevant industry sectors. of TV services tions: Who is producing CD-i The Government’s Proposals. titles, and in which genre? How Following a short consultation For its part, the commercial Geographical coverage by cable are competing interactive period during which the terrestrial TV network Nippon TV networks, with some excep- CD-based hardware and soft- Television Network (NTV) has tions, is in practice limited to ware performing? What kinds of government considered res- CD-i deals are rights-holders ponses from a wide range of recently carried out experi- about 70% of a typical Euro- negotiating? Where CD-i titles interested players, final propo- mental digital terrestrial trans- pean country due to terrain and platforms are selling, and in sals were published in a draft missions, testing both 525-line limitations, urban/rural market what numbers? Who is seeking broadcasting bill in December progressive scanning and split and economic efficiency production and distribution 1995. 1125-line interlaced scanning criteria. Satellite transmission partnerships? Who is buying, systems. According to a report is in practice limited to about selling, or spinning-off titles? The Swedish government is by the Ministry of Posts 75% coverage because of Through a combination of expected to bring forward and Telecommunications, the “urban clutter” topography, breaking news, impartial analy- proposals for the licensing of deployment of digital terres- ability to obtain look angles and sis and exclusive market intel- digital television services, via trial television broadcasting the increasing tendency of ligence, CD-info treats CD-i satellite and terrestrial mecha- will be possible between 2000 local authorities and residents with the same seriousness as nisms, in the near future. It has and 2005. in the past. associations to introduce dish been announced that the bans in many areas. In marked For a sample copy of CD-info fourth national UHF network Digital terrestrial contrast, the European terres- and subscription information, allocated to Sweden in the transmission trial transmitter networks cur- contact the publisher Jean- 1961 Stockholm Plan will not rently provide 99% coverage of Luc Renaud at (44) 1707 876 be used for analogue broad- At first, it seems that satellite 880. a country, with a “meshed” net- casting. An official report on delivery of digital television has work configuration of main and the feasibility of digital terres- an overwhelming edge. Satel- relay stations. The expensive trial deployment has also been lite is seen as the vector for infrastructures of buildings, issued in Finland the new digital technology masts and consumer antennae supporting new interactive In France, operational trials of are already in place. Unlike services. A deeper examination digital terrestrial television will cable and satellite reception, reveals, however, that terres- begin in autumn 1996 and the terrestrial reception disenfran- trial transmission has powerful CSA is considering the regu- chises nobody. assets of its own. It all starts latory framework for digital from the fact that analogue So, terrestrial remains the terrestrial television. terrestrial television licences default reception platform in all Retevision, the national trans- are highly prized and profi- industrialised countries and, mission agency in Spain, is table. Public service and com- therefore, achieves potential leading a consortium made up mercial broadcasting giants are access to all TV households and of sister organisations in all delivered terrestrially in TV sets via existing aerials. France, the Netherlands and every European country. In Terrestrial reception capability Sweden to study the deploy- economic terms, cable and is integrated within all TV sets: ment of digital terrestrial tele- satellite may be viewed as other delivery systems require vision. “overlay” delivery systems. the installation of reception

4 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 D.R. dishes, cable networks or Until the vast majority of design, a recognition that expanded domestic distribu- consumers (namely, whatever advertisers are not interested tion equipment to allow recep- % of total TV households is in distribution methods such as tion on second or third TV sets. deemed to constitute “uni- satellite (or in most countries versal” coverage) is able to cable TV) whose technical London-based Convergent receive digital signals, either reach does not encompass the Decisions Group consultants via integrated digital TV sets or whole universe of TV house- have estimated the cost of digi- set-top boxes, all universal holds. tal transition (transmission and service programming must be reception) in the UK for simulcast in both analogue and It is highly likely that subscrip- reaching the universe of TV digital formats. The consid- tion-based satellite broad- households, given current erable already being casters will want to have access infrastructural growth, at $50 used for analogue terrestrial to nation-wide terrestrial fre- thousand million for cable TV, transmission cannot therefore quencies as well. One could $19 thousand million for satel- be swiftly reallocated for digi- speculate that, over time, they lite DTH and only $4 thousand tal transmission until a lengthy will turn into terrestrial pay-TV million for terrestrial broad- transition process has been broadcasters on the Canal + casting. completed. In the medium- model, and with an “in-clear” window which could draw a The existing transmission term, therefore, the capacity substantial portion of total infrastructure for analogue for digital terrestrial will be revenue from advertising. broadcasting can be reused limited by the availability of (namely transmission towers) additional spectra. Only when ATM – Advanced Television with the addition of digital consumers have completed a Opening the door Markets is an industry news- transmission equipment. Costs transition path of updating to to local TV letter for those who want to of digital transmission are also digital reception equipment keep pace with developments But, in our view, the key asset in digital and interactive TV, non-linear so that large sec- can existing terrestrial broad- of terrestrial digital television, HDTV and widescreen TV, tions of the population in most casting spectra be reused. with its lower transmission V.O.D transactional services, European Union states can be etc., and the commercial impli- power requirement, efficient served by relatively few trans- Regulation and cations for their industry sector mitter stations. This cost non- national governments spectrum utilisation and con- and their own organisation. linearity is unique to wireless siderable cost saving, is that it opens the door to local tele- The rapid technological ad- delivery systems and allows Digital terrestrial is also limited vance in the television market broadcasters and network op- in the eyes of commercial vision. has profound implications: geo- erators to reach, in the short- broadcasters by the heavy graphical confrontations over regulation that is required by Local television – so far as it term, mass audiences at very global standards; the balance of national governments. Com- constitutes a fully-fledged power in the world electronics low cost. Also, household roof- plex arrangements need to be industry – does not really exist industry; the prodigious expan- tops can be reused for house- made for the allocation and in Europe. Digital terrestrial TV sion of broadcast capacity; hold reception. regulation of spectra – as will create the condition for the wholesale replacement of broadcast and reception equip- If viewers restrict themselves included in the recent UK local TV to exist and prosper by tapping into a virgin territory: ment and the impact on the to free-to-air services, there are Government proposals for viewer. no ongoing costs associated digital terrestrial television in the local advertising market. the UK. The exploitation of On reaching maturity. This Edited by Dr Jean-Luc Renaud with receiving digital services who manages an international terrestrially (beyond the cost satellite spectra via European market could account for up to a quarter of total advertising. network of specialist corres- of any licence fee). All other satellite transponders is less pondents, ATM is written by regulated and more freely delivery platforms typically The creation of a local TV experts in the field of television accessible to commercial ope- require minimum monthly industry, which only digital ter- technology and, as important, rators. experts in the analysis and costs to the consumer to restrial broadcasting can bring receive a package of services, reporting of developments in It is true that, whether it is about, will represent another the context of their impact on even in the case of “utility satellite or terrestrial digital crucial leap forward for Euro- businesses. financed” cable networks. television, viewers will have to pean television production: the Fax request for a free copy to purchase a digital decoder. The Terrestrial is the only delivery establishment of a long awaited Joe Lambe at (44) 171 896 difference between the two, platform that can service syndication market. Syndica- 2749. however, is that satellite TV portable and, ultimately, tion is largely responsible for viewers, having already inves- mobile TV sets. This is of par- the strength of the US pro- ted in an analogue set-top gramme production industry. ticular importance in allowing decoder, are asked to purchase reception on second and third Conversely, the inability to a second – digital – decoder. recoup production costs TV sets in the home at no ad- Digital terrestrial TV viewers through multiple sales has his- ditional cost to consumers: will be buying only one set-top torically been the curse of cable and satellite platforms box. The wider technical reach European producers. The digi- deliver services to the main of terrestrial broadcasters will household TV set only. also enable manufacturers to tal transition can potentially lower the unit price through change this state of affairs for The main disadvantages as- the better. sociated with terrestrial broad- greater ecomonies of scale casting are related to its role as more rapidly. by Jean-Luc Renaud, default delivery platform in Television economics has a founder and editor of ATM and CD-Info. most European countries. direct bearing on the appro- Whilst terrestrial broadcasting priateness of the means of TV is used to deliver universal tele- transmission. The survival of Jean-Luc Renaud is the founder and Editor-in- Chief of ATM-Advanced Television Markets vision services (public service satellite TV – and more particu- newsletter and President of the communi- broadcasting and commercial larly satellite digital TV – is cation consultancy firm Globalcom Limited. services with universal service seen almost exclusively in Contact: Jean-Luc Renaud, 113 Newgate Street Village, Hertford, Herts. GB-SG13 8QR obligations), universal cover- terms of pay-television. That Tel. (44) 1707 876 889, Fax (44) 1707 876 880, age must be maintained. is by default, rather than email: 100776,[email protected].

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 5 Digital TV

Digital television: actors and strategies

The development of digi- during the period 1985-90, the For broadcasters, choosing a tal technology leads to the advertising market is now rel- single broadcasting vector is elimination of the main bottle- atively structured; although now outdated. The develop- neck which has been a charac- there is continuous growth, the ment of cabled networks and of teristic feature of the historical rate is only about 10%. Pay- direct broadcast satellite have development of television in television, however, still has offered the channels solutions Europe. The shortage of Hert- considerable potential in many to their signal transport zian frequencies is in fact the European countries. problems which are cheaper reason why a small number than traditional terrestrial of generalised channels has Improved definition broadcasting. Total broad- developed in each country; or more channels? casting capacity has increased, although cable networks multi- and broadcasters have grad- Digital television makes it pos- ply potential supply by ten, ually made use of a range of sible to release broadcasting distribution methods. their technical capacity has capacity which could be used IDATE been rapidly overtaken by the for a range of services; in terms We should not, however, very rapid increase in the of television services, in par- neglect areas of competition IDATE – one of the number of channels up for sale. between broadcasting media. European Audiovisual ticular, this capacity could be Even satellite has developed in allocated to the broadcasting of In densely populated areas, in Observatory’s partners particular, different broad- in the market information Europe in a context of relative “low definition” channels (cor- casting networks could theo- area – is a study bureau poverty, not of capacity, but of responding to the present level retically penetrate the market. specialising in the transcoders located in an of definition of televisions) telecommunications attractive orbital position. and/or the broadcasting of Satellite appears to be the and audiovisual sectors. Here, rarity has been commer- “high definition” programmes. prime vector of digital broad- cial rather than physical. casting for an operator of a Its audiovisual industries Since the failure in both Europe selection of digital pay-chan- department has devoted The obvious consequence of and Japan of the analogue type a number of studies to nels, although its range is pro- this evolution is the absence of of high definition television, it is the development of bably not universal, particularly a limit on the number of chan- no longer included in the imme- digital television, as regards access to shared nels or services theoretically diate plans of broadcasters, including the project aerials on blocks of flats. on “Broadband Infra- available to the public at large; technical operators or mass structures for Digital as a result the “rare resource” electronics industrialists, and This means that in urban areas TV”, supported by the of the audiovisual industry is public authorities are no longer both cabled networks and ter- ACTS European moving towards content and making it an issue. restrial broadcasting have a programme, a com- good case to put forward; the assembly, on the one hand, and It should be noted that if the parative analysis of present level of equipment in the costs of digital towards distribution and the pay channels decided to grad- terms of households which television according final market, on the other; ually introduce high definition to the different broad- getting onto the viewer's could be cabled pleads, in urban television (as one of the serv- areas, in favour of cable; on casting media, and an screen no longer guarantees ices in their packages, but analysis of experiments the other hand, the supposed economic success. without expecting a specific in interactive television. compatibility of terrestrial level of profitability), the non- aerials and digital broadcasting IDATE has recently Encrypted or non- encrypted channels would have limits the cost of reorganising published a multi-client a problem – consumers would study entitled Digital TV: encrypted television? the network. The technical feel that the low definition they capacities of the two broad- the Stakes in Europe. Will one of the two market seg- used was technically outdated. http:www.idate.fr. ments – television financed by casting modes should of course advertising or licence fees (non- also be taken into account. encrypted television) –, on the Which broadcasting Contact: network(s)? Leaving technical parameters Gilles Fontaine one hand, and television by aside, operators must answer Tel. (33) 67 14 44 44 subscription (pay-television), The main television broad- two questions: Fax (33) 67 14 44 00 on the other be the privileged casting networks have devel- – Could the 80% of households E-mail: vector for digital broadcasting? oped successively, according to [email protected] which could be cabled but are Initially, digital television will complex criteria. not subscribers be interested in be almost exclusively introdu- From a technical point of view, the offer of pay-TV different to ced in the pay sector of tele- these networks are partly in what is offered by the cable vision (except for emissions of competition with each other, networks? general interest, such as the but they also complement each – Are new actors attempting to promotion of HDTV, as des- other. Thus the direct broad- commercialise an offer of pay- cribed below). The main reason cast satellite makes it possible TV without having to pass for this is the present economic at one and the same time to through the commercial inter- structure of audiovisual mar- serve both the subscriber, and mediary of the cable operator? kets: the growth prospects for supply the cable network heads pay-television are currently and terrestrial transmitters. much higher than those Thus broadcasting using micro- Strategic choices for non-encrypted television; waves is either a competitor to The announced development where this is public, its cabled networks or provides of digital television appears as a resources are stagnating. In their extension in outer urban potential confrontation be- addition, after its explosion areas. tween groups already present

6 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 in the pay-TV segment, and channels (as planned in the Consequences groups of operators of “free” Netherlands, and already partly for the European television who perceive the the case in France for pay-per- programme industry strategic aspect of the market. view) and the European pay- The capacity for the European What are the fundamental TV channels being tempted to Observatory industry to compete with the features of pay-TV: both pro- create a new competition continues its services North American companies, gramming and distribution, gathering together the major whether for broadcasting or Three years ago the Observatory control of programme rights European clubs. was created for a pilot period of production, is a traditional and control of a portfolio of three years. As foreseen by the sta- As in the cinema industry, foot- feature in the development of tutes, the operations and services subscribers. Setting up a distri- ball rights are in the hands of the audiovisual market. of the Observatory during the pilot bution network (retailers) and the current operators, even if period were evaluated in the winter technological skill in control of of 1995/1996 by an independent the federations limit the dura- As already indicated, the sup- consultant. access are of course also tion of rights conceded in anti- pliers of American programmes Demonstration included in the functions of cipation of increases, and even will attempt to penetrate the of its unique value pay-TV operators; but access to if the European Commission, in different selections of pro- At its 34th meeting on 13 June in the programme and control of grammes developed in Europe Cracow, the Co-ordinators Com- the interests of prohibiting the mittee of Audiovisual Eureka, the subscriber are the two key abuse of a dominant position, although they would not be consisting of the representatives factors. were to impose a limit of the able to act as commercial from the 33 member states of the operators; European broad- Observatory and the European same kind. Commission, decided to continue Rights: casting groups are sufficiently the mission of the Observatory, as cinema and sport solid to negotiate equitable recommended by the external eva- Which decoder? partnerships in this context. luation. In making its decision the The success of the major pay- co-ordinators’ committee pointed The development of pay-TV TV channels has been founded The prospects for the produc- out that the future developments of and the imminence of the ar- the Observatory should be built on on exclusive access (on the tion of programmes are less rival of digital channels have the strengths and expertise acquir- scale of a region and for a limi- favourable for the industry in ed during the pilot period. hastened the debate on ways ted period) to the rights of Europe. Indeed, the proportion Emphasis on public of controlling access. “event” programmes. To the of the number of channels with service mission an American studio as share- “In future the members of the fore of these programmes is Quite apart from the status of Observatory will want it to develop cinema (15 to 20 major titles the decoder, it is indeed the holder will tend to increase as a public service organisation that each year) and sports coverage ownership of the resources of and, for the studios, this pre- gives a equal access to information sence in the capital of the chan- to all actors of the audiovisual (mainly football in the case of pay-TV channels which is at nels will obviously tend to industry, both big and small, public Europe). the heart of the strategic and private, eastern and western. encourage the showing of their confrontations. While candi- As an information provider, the In the countries of Europe as a own programmes. Observatory clearly complements whole, it is mainly access to dates for entry into the pay-TV other European initiatives and sup- market complain that the sec- Faced with this danger, Euro- port programmes in the audiovisual North American films which sector” stated Mr Karpinski forms the basis for the tor leaders are trying to block pean regulation is only a rela- the current Chairman of the construction of an attractive their entry into the sector, the tive protection, and the Euro- Co-ordinators Committee of Audio- visual Eureka. He emphasised that schedule; the input cost for a sector leaders find the idea of a pean industrial fabric for programme production seems public funding should continue to new arrival on the pay-TV completely open decoder un- form the major share of the financial very weak compared with the market, whether digital or not, acceptable. It would be tanta- resources of the Observatory, mount to making their main American leaders. although there will be additional is of course proportional to its market revenue as well. asset their portfolio of sub- ability, on the strength of the by Gilles Fontaine, “In particular we are very proud of number of its subscribers, to scribers freely available to their Jean Dacié and the well functioning collaboration acquire cinema films at a high competitors. Laurence Ouzon, IDATE. with our partners and other infor- mation providers” remarks Dr. Ismo price. In France and the UK, Silvo, Executive Director of the and perhaps already in Ger- Situation of retransmission rights (pay-TV) for football Observatory.”In the last instance, it many also, the competitive is the audiovisual professionals who in a number of countries will benefit”. advantage of operators already The Observatory will increasingly present is decisive. Rightsholder Duration provide information services on-line via the Internet. It will also continue Sport is, in a sense, an even United Sky Rights held until 1996-97; to produce reference reports on more exclusive sector. Unlike Kingdom renegotiation probably market statistics, legal develop- the cinema industry (with limited to 2 years. ments and financing support for audiovisual production and distri- about a dozen major produ- bution. The future strategy will cers), for sport there is in fact Netherlands Consortium: 7-year contract signed in 1996. concentrate on two principle tasks: just one holder of rights per football federation, on pan-European information col- lection and distribution, and on country, for example, the Philips, Endemol, ING, etc. transparency work facilitating gene- national football federation. ral access to information sources. Thus football rights, particu- Greece Greece 5-year contract obtained in 1996. The decision of the committee still larly in recent years (in Ger- needs to be approved by the Com- France mittee of Ministers of the Council of many or Italy), command Canal + Contract until 2000. Europe. The new detailed action increasing fees. Indeed in plan of the Observatory will be Europe, football is experi- Germany Premiere Contract until 1998; option until 2002. discussed by its Executive Council after the summer break. encing an unstable balance be- Italy Telepiu 3-year contract obtained in 1996. Contact: tween the federations being Ismo Silvo, executive Director. tempted to create their own Source: IDATE, after New Media Markets.

D.R. Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 7 Digital TV

Digital television in Italy

Italy was one of the first countries in Europe to experiment with digital television by satellite. Since November 1995, Eutelsat F2 has been broadcasting the three Telepiù channels which already existed in analogue mode on terrestrial frequencies.

This front-line position is basic offer because of the small nal arena: Cecchi Gori in generalist spent 200 000 million lire on pay surprising in view of the fact that number of channels available). television (by buying the national television and pay-per-view rights Italy lags far behind its European channels TeleMontecarlo and for national football championship partners in developing the new The reasons for Video Music) and Telecom Italia, matches for the next three years. media. The entire audiovisual choosing: seeking the through Stream, in the commercia- This fundamental function of scene from the 1970’s to the mid- lisation of new cabled services bringing in subscribers should of 1990’s has been polarised on the competitive advantage (pay television, pay-per-view and course be tempered by the neces- duo of RAI and Fininvest (now Despite the difficulties facing the video-on-demand). sary protection of the interests of ), based on the develop- audiovisual scene in Italy and the subscribers to pay services who ment of terrestrial broadcasting While for the first of these, despite cannot be deprived of watching a technical and economic problems repeated announcements, there is and a traditional model of genera- connected with the commerciali- recording of the evening’s match, list television. no real reason at present to foresee which raises problems all along the sation and high cost of the deco- the imminent entry of the group in der, major progress in Telepiù’s line in terms of compatibility and Proof of this is the fact that even the pay television sector, Stream is development of digital technology balance which must be resolved if today Italy still has one of the already present with an operatio- increasing the number of subscri- is fully justified for at least two lowest levels of penetration of nal video-on-demand service in bers to pay-per-view services is not reasons based on the competitive video recorders (approximately 1 000 homes between Rome and to mean reducing the number of advantage of the sole national ope- 50% of households with tele- Milan thanks to the heavy invest- subscribers to pay television, rator of pay television: one is of a visions), pay television (800 000 ment by the parent company with which nearly all use the analogue European order, and the other subscribers to Telepiù) and satel- the Socrates project for cabling the mode. more resolutely national. lite (700 000 households equipped country using optic fibres. Next Moreover, if nothing is done at a with dishes), while cable television It should be borne in mind that September will see the launching higher level to find a less expensive is still almost non-existent. of the broadcasting of pay tele- shareholders in the Telepiù group way of replacing the current ana- vision and pay-per-view services Despite this situation, which can include some of the most import- logue decoders by digital decoders, aimed at potential cable users hardly be described as encoura- ant European names in the Telepiù’s strategy is more than (approximately 300 000 by the end ging, one operator – Telepiù – development of digital technology. likely to be a loser. of the year and 2 million by 1998). decided to invest massively in the Not only are Kirch (33.6%) and Nethold (32.5%) two of the main At present, because of both development of new services via operators in the pay television With this prospect of increased extremely high costs and the satellite, backing digital broad- sector in Europe (Premiere, Film- competition for the new services, absence of a policy to encourage casting directly, thereby placing it net); they have also developed a Telepiù’s strategy, which is in a the replacement of equipment, it is in the forefront of Europe. system of conditional access, the way inevitable, has therefore been hard to see how a current sub- Using the satellite Hot Bird 1, Tele- D-Box, which is the main competi- to favour the development of digi- scriber to pay television would più moved into the operational tor in Europe of the other major tal technology and digital services switch over to digital television by phase in March last year, in- system, Seca, from Canal + and by satellite rather than maintain its satellite. If the switch is not made, creasing the number of channels Bertelsmann. While we await the guaranteed income and strengthen there is a serious risk of lengt- offered to eight (adding to the settling of scores which will begin its dominant position in the distri- hening the amount of time neces- three Telepiù channels CNN Inter- in the next few months in Germa- bution of analogue pay services sary for developing new services, national, Discovery Channel, MTV ny, where the duel looks set to be using terrestrial frequencies. postponing reaching break-even Europe and BBC World, and soon particularly close and the outcome point, and ending up in a weak TNT Cartoon Network). In practi- uncertain (despite the require- Prospects and services position compared with present ce, however, an unjustified delay in ment imposed by the European competitors (Stream) and poten- The intention – not yet official but the commercialisation of decoders Union of open access to all opera- tial future competitors (Cecchi expressed by a number of leaders has ended up extending the time- tors, provided for in the system), it Gori, RAI, Olivetti, foreign groups). in the group – is obviously to period for the sale of this service to has to be said that each pay tele- switch subscribers from the Pending verification of the effecti- the public, which at the end of May vision operator is trying to build up analogue services to the digital veness of its strategy over the next was estimated at 2 000 sub- a dominant position in its own area service by satellite over the next few months, Telepiù appears to be scribers. The main difficulties are of influence by launching digital 18 months. the sole national operator in a posi- connected with the high cost of services by satellite. tion to foster the development of receiver equipment, particularly While the Seca Group is trying to In terms of offer, the loss leader is digital television in Italy. Because the decoder, which costs approxi- strengthen its presence in France unquestionably Telecalcio. For it lacks the necessary infrastruc- mately 1.7 million lire, while the (and subsequently in Spain), by 500 000 lire, this pay-per-view tures (optic fibre cable) and full kit (including dish) costs 2 mil- launching programme selections service enables the subscriber to because of the relative unattracti- lion lire. This is still too high for the veness and diversification of its managed by Canal +, the D-Box watch live coverage from Septem- service to be widely taken up; it services, Stream is not at present Group is concentrating more on ber of twenty-four matches played needs to be kept down to 15 000 in a position to stand before the Belgium, the Netherlands and by his favourite team in the natio- Italian consumer as a potential lire per month for the basic offer Scandinavia with Filmnet/Multi- nal football championship. The replacement for Telepiù. By (without Telepiù’s two sport and choice, and in Italy with Telepiù. service includes other differentia- cinema channels) and 55 000 lire ted offers (seventeen matches, a making use of coding technology per month for the full service. It The second reason lies in the local single match, etc.) likely to meet (D-Box) and more attractive pro- should be borne in mind that ter- repercussions of the strategy. the differing demands of the user, ducts (Telecalcio), its offer is com- restrial pay television costs 37 000 Since 1995, the national audio- who has demonstrated that he is plementary to Telepiù’s, rather lire per month for a single channel visual scene has undergone a more prepared to pay for football than a substitute for it. (Telepiù 1 or 2) and 44 500 for the number of changes. Two major than for the cinema. It should be by Augusto Preta, two (here there is of course no operators have entered the natio- remembered that Telepiù has Italmedia.

8 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 D.R. Legal steps towards digital TV in theUK “Digital Television is one service must contract first with new framework for digital pay- of the most exciting new deve- the frequency provider as well TV. It draws back from man- lopments taking place in as obtain a separate licence dating a common interface that Britain as we move towards from ITC. To give effect to would accommodate different the information society. It will these proposals the govern- encryption and sub-manage- bring benefits to consumers ment drafted the broadcasting ment systems in the same through improvements in qual- bill. piece of hardware. Instead, it ity, variety and choice, and The broadcasting bill was proposes two separate classes open up significant new oppor- announced in the Queen’s of licences, for encryption and tunities, not only for Britain’s Speech last autumn and was scrambling services, and for broadcasting and equipment published in December 1995. subscriber management ser- manufacturing industries, but National Heritage Secretary vices. These will combine ease also for other British comp- Virginia Bottomley claims the of registration with clear rules anies looking to take advantage proposals will “liberate British to ensure conditional access of digital services. The govern- broadcasters to be world services are available to all ment is also committed to leaders in the twenty-first digital broadcasters on a fair, The School encouraging the development century.” reasonable and non-discrimina- of digital so that analogue of Law, The bill is divided into six prin- tory basis. Enforcement will be University television spectra, a very 5 carried out by the Office of cipal parts of which the first of Glasgow valuable source, can be rel- Telecommunications (Oftel), 1 sets up a framework for the eased.” Ian Taylor, Minister for introduction of digital terres- not ITC. The School of Law Science and Technology, gives teaches a full-time LLB trial television based upon the Oftel meanwhile published a us above a summary of all the White Paper, discussed above. degree to approximately ingredients in the current pers- submission to the Office of Fair 200 students in each Initially, it provides for six Trading review of the pay-TV pective of the British Govern- “multiplexes”; collections of year with specialisation in market.3 This review will re- ment towards digital TV. between three and eight digital a number of honours sub- television channels, according assess the position of BSkyB in jects. It also offers a First it explains that all the the market for the supply of number of research legal initiatives dealing with to how much digital bit is used degrees and supervises for each service. Together the programming to pay-TV at the digital TV are embedded in a wholesale level; access to doctoral research. much larger setting, namely, frequencies will expand capa- The school’s research city to around 20 channels, encryption; subscriber mana- the information society. gement; and transponders. strategy has chosen Second, it expresses the com- which looks extremely small Oftel’s conclusion is that “the three areas for particular mitment of the government to against the 500 plus offered by transition to digital and other support. These areas are put in place a regulatory frame- digital satellite and fibre-optics. developments offer the poten- medical law and ethics; work to give digital broad- The most positive news for international law and tial for greater competition in casting an opportunity for an terrestrial broadcasters (BBC, legal theory; and markets the future but without action early and successful launch. ITV, Channel 4 and 5) was the and economic regulation, Third, it puts an emphasis guarantee of spaces on the now that potential may not be which includes media on digital terrestrial broad- most important multiplexes realised..., and Sky will con- and communications law. casting and conditional-access giving them room to offer extra tinue to retain a substantial Members of the school services. services as well as simulcast degree of market power”. Oftel are undertaking work what they broadcast now. suggests possible remedies at funded by the Economic These three principles have led The bill is intended as enabling four levels: network access, the and Social Research to a number of proposals by rate card, security of supply Council on regulating the various agencies and govern- legislation, so it leaves much of the detail of how it will work in and other contractual terms changing media and are ment departments relating to and channel packaging. expert consultants to digital TV in the UK. practice to the body which will regulate it: the ITC. Some of the Council of Europe on Now the outcome of the legal media concentration and the proposed criteria that the White Paper on Digital framework is almost certain, pluralism; other projects ITC will take into account for the three large power blocks of include a feasibility study Terrestrial Broadcasting an award of a multiplex licence UK television, the BBC, BSkyB for putting Scots law on On 10 August 1995, the govern- are: the area of coverage pro- and ITV, announced during the the Internet. ment published its White posed, the availability of equip- month of May the launch of http://www.gla.ac. Paper on Digital Terrestrial ment required to receive the their digital television initia- uk/Acad/Law/. Broadcasting.2 With this legal service, the financial viability of tives. However, no one knows framework the British Govern- the applicant and the effect on when the final transition to all- ment moved from its stand-off, fair trading. A major topic digital service will take place non-interventionist policy on of debate was the lack of and if and how quickly the UK broadcasting technology to content quality requirements TV viewers will buy the expen- the potential multiplex op- take the initiative on digital sive set-top boxes or upgrade erators or new programme broadcasting. To introduce to new digital TV. A positive 1. The Regulation of Conditio- provides will be expected to digital terrestrial television legal framework is an impor- nal Access Services for Digital services the government is meet. The Labour amendments Television. Department of concerning this issue were, tant but not the only guarantee Trade and Industry, 11 January proposing a two-tier licensing for digital success. Or as Virgi- 1996, Foreword.(http://dtin- structure, separating twelve- however, defeated. The former fol.dti.gov.uk/cii/). competitive bidding principle nia Bottomley notes: “The suc- year licences for digital fre- cess of terrestrial digital tele- 2. Digital Terrestrial Broad- quencies from open ended used for Channel 3 is also not to casting. The Government’s be used. vision will depend on the Proposals. Department of licences for digital services. quality, range and cost of new National Heritage. London: Those wishing to own a fre- Since many of the new services services. Viewers and listeners HMSO, Cm 2946. quency must obtain a licence are likely to be conditional- will decide for themselves.” 3. Oftel submission to the OFT from the Independent Tele- access channels, the Depart- review of the pay-TV market. Office for Telecommunications, vision Commission (ITC), and ment of Trade and Industry by Stephan Verhulst, February 1996. (http://www. those wishing to broadcast a (DTI) published in January a University of Glasgow. open.gov.uk/oftel/payt).

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 9 Digital TV

A profusion of packages for European television

Digital television is no AT - AUSTRIA ration, Belgacom, the national cable. The VT-4 channel longer just a project, telecommunications company, (currently broadcasting from Digital television is still in its manufacturers (Philips, Alcatel, London and run by the SBS it is well and truly study phase in Austria. A trial Gillam, SEE, IBM), the press group) reiterated its desire to under way in the digital broadcast on the cable (Audiopresse), the Mediathèque take part in Nethold Benelux’s United States network was undertaken in late of the French speaking commu- Flemish package. Negotiations 1994 by Telekabel, the country’s nity of Belgium, as well as uni- are being held between VTM and (especially with the main cable distributor, on the versity and private research BRTN. Apart from the general- burgeoning success of Klangenfurt network. ORF, the centres. interest channels, Nethold would DirecTV) as well as in Austrian public broadcasting also offer its three basic channels corporation, has joined up with Titan’s plan is to introduce, on an (FilmNet, Supersport and Hall- Europe. Some tele- Post und Telefon Austria AG to experimental basis, between mark) as well as the American vision channels were look into the possibilities of 4 000 and 10 000 multimedia channels (see the chapter broadcast in digital digital technology. digital terminals into homes in below on the Netherlands). The the two communities. compression, indi- There has so far been no announ- package would also feature near-video-on-demand services. vidually and on a trial cement as to the marketing of However, it is quite clear that, German digital packages in behind this consensual project, Viewers would have to buy a basis, as early as Austria. other strategies are being prepa- decoder for 27 000 BEF. Monthly 1994. Some broad- red. Canal +, along with cable subscriptions would cost around 1 000 BEF. casters, such as BE - BELGIUM companies, is examining the pos- Multichoice, BSkyB sibilities of bringing the Canal- Besides this, the Scandinavian The introduction of digital tele- Satellite digital package onto the Broadcasting System group’s and CanalSatellite, vision in Belgium has to allow for French speaking community’s channel VT-4 has been broad- foresaw, in analogue the high rate of penetration cable, in which the Belgian ver- casting to the Flemish cable net- broadcasting, the achieved by cable television in sion of Canal + would replace the works from London, over the the country. French version. The RTBF would Kopernicus DFS-1 satellite. logical advent of also be invited to join the Canal + digital technology The French and German package, which could equally packages. Drawing up speaking communities well include a “civil channel” CH - SWITZERLAND in Belgium (made up of programming from and launching digital local and community television SSR - SRG The question of bringing digital packages is the stations and news from parlia- SSR-SRG, the Swiss public television to Belgium’s French- current vogue and the ment), which the Executive of broadcasting corporation, con- speaking community is going the French speaking Community firmed in April 1996 that it would new European stage ahead amid a somewhat un- has been looking to start up. The be broadcasting its 4 terrestrial settled climate, where existing for digital television alliance between Canal + and the channels (DSR, TSR, TSI and agreements are coming under became clearer in cable distributors brings up the Schweiz 4 / Suisse 4 / Svissera 4), fire (restructuring of the CLT, question of possible access in the MPEG-2 standard, through spring 1996. A whole internal crisis over the relation- string of alliances problems for other French- the Eutelsat Hot Bird 3 satellite, ship between the press and the speaking packages (such as those as from 1 June 1996. between both public CLT within RTL-TVi, the break- of AB Production or the possible up of the TVB agreements regu- and private competi- packages of CLT and TF1). AB Diffusion lating the advertising market tors sprung up, some between the RTBF, RTL-TVi and The deregulation of telecommu- In March 1996, the French comp- unexpected and some Canal +, as well as the announce- nications and cable-television any AB Diffusion (see below, best described as ment of a review of the status services in Europe has brought under France) announced that it and scope of action of the Audio- Belgacom, the national telecom- intended to buy a repeater on stormy. While the visual Supervisory Board, etc.). munications company, to look at the Eutelsat II satellite to launch scene remains patchy the possibility of competing with a digital package of TV channels The various parties involved in cable distribution networks by in Switzerland. It should be on in parts, with a the audiovisual sector in the number of new introducing microwave-broad- offer to some 240 000 cabled French and German speaking cast digital television (MMDS). households in French-speaking partnerships in communities have come to- Switzerland. An agreement has gether under an umbrella asso- perspective, we Flemish community been signed with Pay-TV, a joint ciation, called “Titan”. Apart venture of the main French- thought it would from the two communities, the Negotiations are under way in speaking Swiss cable distribu- be usefull to give as association also includes the the Flemish community between tors. The digital signal will be detailed an overview broadcasters (RTBF, Canal + Nethold Benelux and the cable received by the headends, as possible of digital Belgium, RTL-TVi and the local companies, to try to set up a converted into the PAL analogue and community television sta- joint-venture that would allow signal and coded by the Nagra- television, as it stood tions), the main cable companies Nethold’s Dutch package to be vision access control system, in July 1996. and RTD, their professional fede- broadcast over the Flemish itself developed by Canal +.

10 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 D.R. D - GERMANY – four series channels (Krimi & project involved forming a new ES - SPAIN Co, Herz & Co, Comedy & Co and company. The agreement also Public broadcasting Western & CO); allowed for the setting-up of a RTVE initiatives programme-publishing subsidia- RTVE, the public service broad- – two sports channel (DSF plus ry, the role of which would be to Since 31 December 1995, ARD-1 casting company, already has the and DSF Golf); produce German versions of and ZDF have been the first technical equipment needed for CanalSatellite’s theme-based German channels to broadcast in – a news channel (DF1 Info- digital signal compression, used channels (Planète, Ciné-Cinéfil, MPEG-2. The uplink to the kanal); to distribute the two Mision Canal Jimmy) and a “Hunting, -1E satellite’s repeater 71 America channels to Latin Ame- – American channels (MTV, Fishing, Nature” channel. The comes from the SES station in rica, broadcast by the Hispasat VH-1, NBC and CNBC); subsidiary was to be split up bet- Betzdorf (Luxembourg), after satellite. ween Bertelsmann (25%), being converted to analogue – the thirty radio services from BSkyB (25%) and Multithéma- signal. ARD and ZDF are cur- Digital Music Express’ American Antena 3 tiques (itself held 33% by Géné- rently renting repeaters on the package (DMX); rale d’Images, 33% by Canal + Cable Antena, a subsidiary of Astra 1F satellite, while awaiting By year end, there will also be: and 33% by TCI). Antena 3, broadcasts a package access to digital repeaters on the of 5 channels in MPEG-2 through satellite, the launch of – thirty or so theme-based The terminal (Mediabox) sales the Hispasat 1A satellite. The which is scheduled for May 1997. services; should be handled by the service has been marketed over – the Cinedom video-on-demand , the internatio- Multimedia Betriebsgeselschaft the cable networks since January service. nal public broadcasting channel, (MMBG) consortium, which is 1996. Marketing of a 20-channel 51% held by Deutsche Telekom, is negotiating the broadcasting of The basic price will be 20 DEM package to Spanish households 11% by the CLT, 11% by Bertels- a digital package targeting Asia per month, which will cover a with individual antennae should mann, 5.5% by Canal +, 5.5% by and the Pacific, through the package of fourteen channels, begin in late 1996. The package RTL, 5.5% by ARD, 5.5% by ZDF Asiasat 2 satellite, launched in the thirty DMX radio services, should include pay-per-view and and 5% by Debis (a subsidiary of late 1995. The package could the news channel and a pro- near-video-on-demand services. the Daimler-Benz group). also include other European gramme magazine, as well It is also intended to set up a pay- (RAI, TVE Internacional, MCM, as “Toni” (Tele-Online-Naviga- In May 1996, a European Com- per-view service showing the etc.) and Asian (Star TV) chan- tions Instrument), a service to mission spokesman announced matches of the Spanish football nels. help choose programmes. Subs- that the Commission, which had championship. Antena 3 has cription to the sports programme prevented the set-up in 1995 of already signed agreements in Other channels already will come to 10 DEM per month, the MSG Media consortium, be- this respect with a number of independent channels. broadcasting digitally while access to a film from the tween Deutsche Telekom, Ber- RTL Television and VH-1 Germa- video-on-demand service will telsmann and the Kirchgruppe, Canal + España ny are already broadcasting in cost 6 DEM. The basic cost of the would not stand in the way of the MPEG-2 via the Eutelsat II F1 decoder will amount to between new venture, inasmuch as it Sogecable, a subsidiary of Canal + and Orion 1 satellites, respec- 1 100 and 1 300 DEM. taken heed over the criticisms España, has been using the Astra voiced over the MSG Media tively. DF1 forecasts some 200 000 1B satellite to market Canal- question. However, stories began subscribers by late 1996, increas- Satellite, the analogue package, Kirchgruppe’s DF 1 project appearing in the press at the since 1995. The package ing to 700 000 by the end of beginning of June on Rupert includes 5 channels : Cinemania The launch of the DF1 package is 1997 and three million by the Murdoch’s intention to withdraw (colour films), Cine Classics due for 28 July 1996. It will be year 2000. In comparison, the from the platform. The planned (black and white films), Docu- operated by a new company, Premiere pay channel currently merger between Bertelsmann’s mania (Documentaries), Mini- under the control of the Kirch- has a million subscribers. max (children’s programmes) gruppe DF1 GmbH & Co KG. The audiovisual activities (UFA) and and Sportmania. These should digital package will be broadcast On 7 April 1996, the Kirchgruppe the CLT, announced on 2 April shortly be joined by a news and a through the Astra satellite and signed an agreement with the 1996, along with the difficulties music channel, a channel aimed can be viewed using a decoder American group, Viacom, involv- the CLT and Canal + were at young viewers and an extra developed by BetaTechnik, a ing the broadcasting of MTV- having over the French market sports option. The company Kirchgruppe company and in Europe and VH-1 in the DF 1 were thought to be behind Mr forecasts 100,000 subscribers by association with Nokia and package, along with segments of Murdoch’s dissatisfaction. late 1996. C-Qube, the “d-box”. Nickelodeon. In return, the Kirchgruppe agreed to offer Pro Sieben In April 1996, Canal + España The DF1 package will include: access to broadcasting rights for announced it was considering Germany for encrypted and In April 1996, Pro Sieben (a – two documentary channels: launching a digital package for unencrypted broadcasting of all company controlled by the Rewe Leonardo and Discovery Channel individual antennae for 1997. Paramount-produced films and group and by Leo Kirch’s son) Deutschland (resulting from a the package would include 100 TV programmes, as well as a set up a subsidiary, Pro Sieben 50 - 50 joint venture between the channels, including 20 exclu- large number of broadcasting Digital, to prepare for the launch Kirchgruppe and Discovery sively for the platform, while the rights to other Western Euro- into digital television. The comp- Channel); others could be the same as pean countries. This agreement any announced it would be using the “d-box”, developed by Beta- those already offered on the – two advertisement-free child- could also be extended to in- cable networks of Cable Vision, Technik. They have rented three ren’s programmes: Junior, for clude the Spanish company, the joint subsidiary of Canal + repeaters on the Astra satellites the under-8’s and Clubhouse Gestevision . and Telefonica, the national tele- in preparation for the launch of (8-14 years old); communications company. 16 channels in late 1996. No The MMBG project – a cartoon channel (K-toon); details have as yet been given, Telecinco – nine mainstream film channels On 7 March 1996, Bertelsmann, but the package is thought to act (Filmpalast, Star Kino, Cine Canal +, Havas and News Corp. as an extension of the Home In May 1996, Telecinco announ- Royal, Cine Thriller, Cine Action, announced the setting-up of a Order channel (HOT), a near- ced it was setting up a subsidiary Cine Comedy, Romantic Movies, joint platform to launch digital video-on-demand channel and for the launch of digital services, Western Movies, Heimatkanal); television in Germany. The several news channels. but gave no details as to how it

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 11 Digital TV

would be broadcast or the type Eutelsat satellite and then over a – music option (30 FRF per It should also be noted that TF1 of programme planned. Telenor satellite. month) (Muzzik - a music chan- has already carried out MPEG-2 nel - and twenty radio stations); broadcasts through the Eutelsat TV-3 Terrestrial digital television – downloading option (50 FRF II F1 satellite. projects TV-3, the television of the Cata- per month): the C: Direct AB Sat lan-speaking community, is pre- Consultant Jouni Mykkänen’s channel allows computer paring a package of 5 digital report, made in January 1996 programmes to be downloaded; Ripples of surprise ran through Catalan channels, with broad- for the Ministry of Transport, – pay-per-view service: Kiosque: the industry in late 1995 with the casting to begin in late 1996. recommended prompt action to film and sports programmes announcement that production lay down the basic principles and (from 29 to 387 FRF per and distribution group AB Pro- Multicanal / TPS outline a strategy for the esta- session); duction were launching a digital blishment of radio and television package. Its subsidiary, AB Sat, Multicanal/TPS is a company – service Canal +. digital services. The report sug- has been using the Eutelsat II F1 jointly held by ABC Broadcasting gested drawing up a shortlist of satellite to broadcast the AB and Cable International, UIH, TPS companies which might be inter- Channel 1 channel since 7 Grupo Urbina and Multitel. Since ested in digital broadcasting. The Télévision par Satellite pro- December 1995 and five other 1994, it has been broadcasting in It also considers that existing ject (TPS) was first announced theme-based channels since 2 MPEG- 1 a package of 4 theme- on 11 April 1996 and brings to- April 1996. Marketing should based channels for cable : broadcasters ( and MTV) 3 would need to work together, gether TF1 (25%), France Télé- begin in autumn 1996. a children’s channel (Canal vision Entreprises (25%), M6 Panda) a Latin-American music but that it would also be neces- sary to speed up the whole pro- (20%), the CLT (20%) and the channel (H-TV), a film channel Lyonnaise des Eaux (10%). The GB - UNITED KINGDOM (Canal Hollywood) and a travel cess by attributing franchises to new private broadcasters within five partners signed the statutes channel (Odisea). The package on 19 June and drew up a share- Satellite digital broadcasting is distributed through a hundred a fairly short time. The Minister of Transport has already receiv- holders’ agreement. France Télé- or so cable networks in Spain vision’s holding, approved on 27 BSkyB and Portugal. MPEG-1 was repla- ed a number of applications for June by the Boards of BSkyB currently offers a package ced by MPEG-2 in Spring 1996. franchises. and , was eventually of twenty analogue broadcast In the discussions following the lowered to 8%. France Telecom, channels, for a monthly fee of Televisa publication of the Mykkänen the public telecommunications £10.99: , , Sky The Mexican communication report, it became clear that the corporation, will be taking up a Soap, , TLC, QVC, The group, which already broadcasts timetable had erred on the opti- 66.66% holding in France Tele- Discovery Channel, Bravo, MTV, the Galavision channel to Spain, mistic side. A working party was vision Entreprises. This means VH-1, CMT, The Family Channel, has announced that it would be set up and its conclusions were that its Viaccess decoder will be UK Gold, UK Living, TCC, using the PanAmSat satellite to published in late May 1996. used by TPS. France-Telecom’s Nickelodeon, EBN, The History distribute an 80-channel digital decision has also guaranteed Channel, The Sci-Fi Channel, package, as from the second half F - FRANCE TPS’ place on a Eutelsat satellite. Paramount TV. Also available are of 1996. The project should come on the “premium” channels (Sky CanalSatellite stream in the final quarter of Movies, The Movie Channel and 1996. Working party on terrestrial ) and the “premium Since 1992, CanalSatellite, a bonus channels” (Sky Movies digital television subsidiary of Canal + (70%), the Forty channels will be offered. To begin with, the package will Gold, The Disney Channel, Sky In June 1996, the Direccion Chargeurs group (20%) and the Sports 2, Sky Sports Gold). General de Telecomunicaciones CGE (10%), has been broad- feature existing channels (TF1, France 2 and France 3, M6, Fran- BSkyB already has some four and Retevision, the public broad- casting a package of ten channels million subscribers. The first casting corporation, announced in analogue mode through the ce Supervision, TV5 and possibly other French-language channels pay-per-view sports event (the the setting-up of a working party Telecom2A and Telecom2B Tyson-Bruno boxing match), to study the penetration of ter- satellites. CanalSatellite had over such as RTBF and TSR), news channels (, LCI) and was broadcast on Sky Sports 2 on restrial digital television in Spain. 320 000 subscribers by spring the night of 16-17 March 1996. Channels 66 - 69 in the UHF 1996. CanalSatellite has also theme-based channels (the his- waveband have already been started to market a digital tory channel, set up jointly by In December 1995, BSkyB given over to the future network, package and by mid-June 1996, the INA and France-Télévision, a and Granada Communications which should be broadcasting there had been 60 000 orders for drama channel also prepared by announced they were setting up between 8 and 16 channels. digital terminals. The company France-Télévision, a women’s a new channel in 1996, to be RTVE announced that it was forecasts sales of between channel prepared by M6, Canal called Granada Sky Broadcasting interested in taking part in the 150 000 and 200 000 by the end Assemblée Nationale (Parlia- Ltd., with the aim of producing working party and the other Spa- of 1996. ment), TF1’s Hyper Kid and eight new channels using the nish channels have followed suit. Hyper TV channels and the Série Granada and LWT catalogues: The CanalSatellite basic service Club and RTL channels, controll- Granada Gold Plus (broadcasting costs 98 FRF per month and ed by the CLT and the Lyonnaise FI - FINLAND notably episodes of Coronation offers eleven television channels des Eaux). The other French Street), theme-based channels (Canal J, Canal Jimmy, Eurosport public broadcasting channels (La (Health and Beauty, Home and FTV France, LCI, la Chaîne Météo Sept/, and La Cinquième), Gardening, Food and Wine, YLE, the public service corpora- (the weather channel), MCM, along with the Festival project, Granada Good Life, Granada Men tion, announced on 27 June 1996 Monte Carlo TMC, Paris Premiè- could also join the package, but and Motoring, Granada Talk TV, that it had signed an agreement re, Voyage, C: Direct and Télé- they have also received an offer Granada TV Shopping Guide). with Norwegian satellite opera- zoom) and ten radio stations. from CanalSatellite. The GSkyB package will come as tor Telenor Satellite Services AS Five extra options are available: part of the Sky Multi-Channels The CLT puts the basic subscrip- (TSS) to broadcast the FTV – cinema option (55 FRF per offer. The main aim of the under- tion price at just under 100 FRF channel (which will also include month) (two film channels, Ciné- taking is to attract women per month. programmes from YLE1, YLE2 Cinéfil and Ciné-Cinémas, each viewers over to satellite channels and commercial channel MTV 3). film shown separately three The CLT forecasts 100,000 sub- by using the Manchester-based The channel will be broadcast to times as well as Ciné-Cinémas’ scribers during the first year of group’s chain of retail stores Europe for two years over a 16/9 version); operations. (sale and rental of electrical

12 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 D.R. goods). BSkyB itself should East. The channels’ content – development of the potential of the idea of bringing together the also be adding four analogue has been adapted so as not to digital television for regional current broadcasting companies channels to its package by year- offend Arab sensibilities. Other news. (BBC, ITV, Channel 4 and the end, using the satellite. channels are planned by the end future Channel 5), so as to put • Satellite and cable of the year. The package can be forward a co-ordinated offer. In May 1996, BSkyB announced received using the same IRD – The BBC’s terrestrial channels Bruce Gyngell, Managing Direc- it had reserved fourteen repeat- access control system as the could also be broadcast over tor of Yorkshire Tyne-Tees Tele- ers on the new satel- Multichoice package marketed in cable and satellite, with free vision, in his talk to the Royal lite, in position 28.2° East. the Middle East by FilmNet. access; Television Society (19 June Launch is scheduled for spring – various subscriber theme- 1996) claimed that terrestrial 1997. Altogether, the packages digital television had no future, could offer some 500 channels. Terrestrial digital television based channels (arts, music, projects education, everyday life, but not adding that he thought the BSkyB is planning on launching straight-jacket effect of the law, its digital packages around the sport). These channels would The latest broadcasting bill, also be broadcast abroad to coupled with the limited number end of 1997. Near-video-on- which should become law this of niche channels that could demand services should be in- compliment BBC World and BBC Summer (see Stefaan Verhulst’s Prime; viably exist, provided the main cluded for broadcasting films as article), prepares the ground obstacles to the development not – a near-video-on-demand well as the likelihood of a pay- for the launch of digital tele- only of terrestrial but also satel- service giving access to the BBC per-view in association with the vision and anticipates up to 21 lite and cable digital television. English (foot- channels. Current terrestrial archives. ball). broadcasters (BBC, ITV, Chan- • Radio Channel 4 nel 4 and ), as well as The Parliamentary Channel Channel 5, which will start up on The BBC is a pioneer in digital In May 1996, Channel 4 set up an 1 January 1997, will automati- audio broadcasting (DAB) and editorial working party to look at The Parliamentary Channel currently runs five digital radio which extra channels the comp- broadcasts parliamentary news cally be granted places on the new networks. Teletext (which stations. New international, any might be able to launch. in MPEG using the Intelsat 601 national and regional services Channel 4 is probably moving satellite. currently attracts 16.7 million viewers), has been allocated 3% would also be launched. towards simulcast broadcasting of the multiplex space given to of its current output, as well as a Discovery Europe The BBC’s international pay-television channel. ITV, Channel 4 and SC4, but has channels (BBC World and BBC In April 1996, Discovery Europe, lodged a protest with the Depart- Prime) should also be broadcast IE - IRELAND the European subsidiary of the ment of National Heritage, claim- digitally. Free digital versions of American Discovery Commu- ing that the small allocation it BBC 1 and 2 will be broadcast RTE, the Irish public broad- nications, announced it was has been given will not allow it from 1998 onwards. casting corporation, has drawn preparing five digital channels, to compete properly with the up a report on digital television along the same lines as those set other broadcasters, in particular ITV for the Ministry of transport. up by the parent company. The BBC’s Ceefax (thirteen million channels would include a Euro- viewers). Although the broadcasting bill BSkyB’s digital package will be pean version of Animal Planet, has, right from the start, given marketed in Ireland. launched in the States this In May 1996, BSkyB confirmed them broadcasting space on the year, a children’s channel and a that it was still considering the future terrestrial broadcasting IT - ITALY possibility of taking part in the channel on technology. The network, the ITV companies are launch of terrestrial digital tele- channels are due to be launched still dubious about the commer- Telepiù vision, on top of its investments together on the BSkyB package. cial future of the new system. In March 1996, Telepiù, the pay- in satellite broadcasting. It has The KPMG consultancy group, television company (currently been looking into joining up with Viacom which is acting for several ITV controlled by the Kirchgruppe the BBC, Virgin and Granada. channels, has made a cash-flow and Nethold) began broad- On 10 April 1996, the SES projection for the digital ser- casting a satellite package using announced that it had rented out BBC vices. The most pessimistic fore- the Hot Bird 1 satellite. The two digital channels on the cast shows negative cash-flow package includes the three Tele- Astra 1F satellite (launched the In early May 1996, the BBC pre- until the year 2004, with no più channels, plus CNN Interna- previous day by the Russian Pro- sented Extending Choice in the chance of breaking even until tional, Discovery Channel, MTV ton rocket) to the American Digital Age and announced it twelve years after receiving the Europe and soon TNT Cartoon. group Viacom. While waiting for would be launching digital tele- broadcasting licence. A more From September onwards, a pay- them to come on stream, Viacom vision services around 1998. optimist forecast (assuming the per-view service featuring Italian launched two digital channels on The BBC plan is based on the consumer does not have to pay league football matches should 15 April: MTV Europe and two following projects: for the installation of the termi- also be available (see Augusto Nickelodeon Germany. The nal), shows no positive cash-flow Preta’s article below). group’s other channels should • Terrestrial digital television before the year 2002 and a soon be following, in different – BBC 1 and BBC 2 on wide- modest 16% internal rate of Stream languages: VH 1, Nick at Nite, screen; return (IRR). Without ruling out The Paramount Channel, The Stream is held 75% by the STET, – flexible use of the digital band- his company’s involvement, Gra- Sci-Fi Channel, Comedy Central, the state telecommunications width to provide complimentary nada Media Group’s Chairman, etc. corporation, and 25% by Tele- BBC 1 and 2 programmes at Charles Allen, made known his com Italia. It has been supplying Viacom is also developing the certain times of the day. For doubts over whether it was pos- an optical-fibre video-on- Gulf DTH project in partnership example, when Pride and Preju- sible to come up with a viable demand service to a few thou- with Kuwaiti investment comp- dice is shown on BBC 1, a theme offer in terrestrial digital tele- sand Italian households since any KIPCO, which has been evening on Jane Austen could be vision that could compete with 1995. Films are available for be- broadcasting the Networks shown on the complimentary cable and satellite. He also de- tween 1 500 and 5 000 ITL. Showtime package (MTV-Euro- channel; clared his unease over the real Stream signed an agreement pe, VH-1, Nickelodeon, Para- – a news channel combining possibility that a government with producer-distributor Vitto- mount, TV Land, The Movie international, national and regio- could put an end to analogue rio Cecchi Gori, giving it access Channel, Bloomberg Information nal news, along with live cover- broadcasting and finished by to the main Italian film cata- TV) from London to the Middle age of parliament, etc.; expressing his puzzlement over logues. The aim is to achieve a

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 13 Digital TV

rate of penetration of 40% of pay-television group Nethold city with four to six extra repeat- wideband network users, in (controlled by Richemont, the ers in 1996 and the launch of the other words, some 25 to 30% of South African group) announced Thor II A satellite in Spring 1997. Italian households. an agreement leading to the Telenor hopes to become the launch of a single digital package third European satellite system, Orbit in summer 1996 for the Dutch behind Astra and Eutelsat, by Sources of information and Flemish markets. using the position 1° West. Magazines Although little known in Europe, ATM, Broadcast, Cable and Satellite Europe, Cable the Orbit and Until the agreement, Nethold, on NRK and Satellite Express, Cine & Tele Informe, Ecran Total, Radio Network is the main archi- the one side, and Philips and Le mensuel des nouvelles télévisions, Marketing & Media, Media Nordic News, Medien Bulletin, Millecanali, tect of MPEG-2 digital broad- KPN, on the other, had been In its strategic paper for the Screen Digest, TBI, TV World. casting. It is based in a suburb of fighting it out for control of the years 1996- 2000, the NRK Rome, from where it broadcasts Dutch pay-TV market: Nethold public broadcasting corporation Internet servers & sites its package of twenty four tele- had its pay channels FilmNet sets out the decisive role it consi- Satellite vision and twenty four radio (350 000 subscribers) and ders it should be playing in the Internet sites dedicated to current news on satellite TV SuperSport (250 000 sub- introduction of digital technolo- • European Satellite Information channels. Orbit is wholly owned http://www.hf-fak.uib.no/smi/ksv/SatFaq.html by the Mawarid group. The scribers) as well as the Multi- gy in Norway. NRK has joined up • Robert’s Satellite TV Page package should be moving in the choice package (featuring a with Norwegian Telecom to look http://www.nmia.com/~roberts/robert.html second half of 1996 from the number of British and German into the possibilities of launching • SAT-NET channels), while Philips and http://www.sat-net.com/ Intelsat 704 (66° East) satellite digital television services. • SATCO DX - Satellite Chart over to the Intelsat 703 (57° KPN were working together on http://www.satcodx.com/ the TeleSelect pay-per-view East) satellite for the Middle PL - POLAND • Satellite Europe East and (18° West) project (12 000 subscribers). ftp://ftp.ntb.ch/Information/Satellite_Europe/ satellite for Northern Africa and The regional channel, Wisla TV The agreement gives Philips and • Satellite Journal Europe. (which could become the first http://www.nmia.com/~roberts/sji/sj300.html KPN 40% of Nethold Benelux link of a network of Polish regio- • Satellitenfrequenzen Orbit is considering marketing shares, while Nethold will be http://www-dw.gmd.de/cgi nal channels) broadcasts in taking a holding in Philips and bin/listfolder/english/tv/frequencies/satellites.html part of its package in Europe, MPEG-2 standard over the • Télé-Satellite KPN. The agreement means with its five million Arab house- Eutelsat II F3 satellite. http://area51.upsu.plym.ac.uk/~sat/telesatellite/ holds and in America (1.25 mil- Nethold will be able to access the • Télé-Satellite on-line http://www.TELE-satellit.com/ lion Arab households), via Intel- cable networks of Casema (sub- RU - RUSSIAN FEDERATION • The DBS Home Page sat 603. The Orbit package offers sidiary of KPN, whose 1.2 million http://www.dbsdish.com/ five TV channels in (two subscribers make up 20% of the • The Litle BBS original channels, two channels Dutch cable market. RTR Network http://www.login.dknet.dk/~husted/ from Egypt’s ERTT and the The agreement is awaiting In late 1995, RTR, the Russian Jordan Satellite Channel), nine Major satellite operators on internet approval by the Dutch autho- public broadcasting corporation, English-language TV channels • Deutsche Bundespost Telekom rities. announced it was setting up a http://www.dtag.de/dtag/telekom_fr.html (six original channels, plus joint venture, called RTR net- • Eutelsat ESPN-Sports, Discovery Chan- work, with a British partner http://www.eutelsat.org/home.html nel and CNN International) Other channels • Hispasat (probably BSkyB), in order to http://www.etsit.upv.es/asig/5º/tel_espa/pract_1/ and four French-language TV The music channel, The Music launch a digital package to be • Intelsat channels (TMC, Planète, Ciné- Factory and the V10 Gold broadcast using the Intelsat 604 http://www.intelsat.int:8080/ Cinéfil and Ciné-Cinémas). channel, both launched in 1995, satellite. A sports and a film • Intersputnik Other channels, designed for the are broadcast in MPEG-2 using http://nsn.net/express.html channel were due for Spring different broadcasting areas, will • SES the Eutelsat II F3 satellite. 1996, to be followed by other http://www.aia.lu/home.html make up the rest of the package, theme-based channels (medici- • Telenor once the change of satellites has NO - NORWAY ne, business, children), to reach http://www.telenor.no/ been completed. • Tele-X a potential audience of 40 million http://www.ssc.se/ssc/telex.html Telenor “collective customers” (cable, • Turksat Mediaset SMATV) over the ex-Soviet The Norwegian satellite comp- http://inter.mfa.gov.tr/grupd/turksat.htm Union. Mediaset came about following any, Telenor, which runs the International or European organisations the restructuring of Fininvest’s Thor satellite, launched a digital involved in the introduction of digital TV business interests and is prepa- channel in November 1995, SE - SWEDEN AND SCANDINAVIA • UIT (index) ring its stock-market flotation. http://www.itu.ch/special/search.html containing the two Danish public On 11 June 1996, it published a • DVB broadcasting channels, DR-TV Terrestrial digital television http://www.ebu.ch/dvb_home.html document for potential investors and TV2, the Norwegian public project • European Radiocommunication Office in which it claimed the company channel NRK, and the two Swe- http://www.ero.dk/ero/eronew.htm#INTRODUCTION Following consultant Lars had a head-start in the fledgling dish public channels, SVT-1 and • European Commission - Jeding’s report From Mass Italian satellite television market SVT-2. They can be received Directive on advanced television Media to Multimedia – The http://www.cec.lu/en/comm/dg10/avpolicy/d93424.html and that it had reserved a repeat- though the Oslo cable networks. Digitalisation of Swedish Tele- er on the Hot Bird II satellite, due Telenor already distributed Sites dedicated to technical norms vision, the Swedish government to be launched in late 1996 or seventeen analogue channels to and aspects of TV announced its intention of early 1997. Mediaset is also just the cable networks and to indivi- • Worldwide TV Standard backing terrestrial digital tele- http://www.ee.surrey.ac.uk/Contrib/WorldTV completing the digitalisation of dual antennae, using the Thor, vision and presented a bill before the backbone of its terrestrial Intelsat 702 and TV Sat satellites. Sites dedicated to MPEG Parliament on 13 March 1996. network. Within the next two or three • http://random.chem.psu.edu/mpeg.html The Government’s proposal, years, Telenor hopes to be able • http://www.crs4.it/~luigi/MPEG/mpegfaq3.html/ backed by the three main politi- NL - NETHERLANDS to offer its digital packages as a • European Commission: Green Paper on the Legal cal parties, allows for the intro- Protection of Encrypted Services in the Internal Market free service, to allow households duction of eight digital channels • http://www.ispo.cec.be/infosoc/legreg/docs/9676en.html Nethold / Philips / to receive the programmes by late 1998. It plans to termi- KPN alliance without a terminal. nate analogue services by the In early June 1996, the Philips Telenor also announced, in year 2008, by which time it is group, the Dutch telecommuni- December 1995, that it would be thought about fifty terrestrial cations company KPN and the increasing its broadcasting capa- digital channels will be available.

14 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 These channels could include Three channels of the Scandina- (OJEC 2.3.1996), declared that Egmont (DK) and Schibsted new national or foreign channels vian Broadcasting System (SBS) the operation failed to comply (NO) communication groups. (especially those from other will also be included in the with the internal market and Telia Media is also involved in Scandinavian countries), as packages marketed on the natio- European Economic Area regu- Svensk Kabel’s Bio Hemma well as the existing Swedish nal markets : Kanal 2 (Den- lations governing competition. project, the first European pay- channels. The project would mark), TV Norge (Norway) and per-view service, launched in In May 1996, MTG drew up an need an investment of about Kanal 5 (Sweden). Swedish June 1994 and which, since May agreement with he Société Euro- 10-20 thousand million SEK channel TV4 is currently nego- 1996, has been broadcasting four péene de Satellites which would (1-2 thousand million ecu) for tiating with Nethold. PTV, the channels to a potential audience allow it to stop broadcasting its broadcasting equipment, termi- Finnish pay channel, will also be of one million subscribers. Bio channels through the Astra satel- nals and new receivers. available on the Finnish digital Hemma had 100 000 subscribers lites. MTG has not as yet platform. by spring 1996 and should now announced any plans for the be moving towards a genuine Nethold launch of a digital channel video-on-demand service. A trial On 19 April 1996, Nethold Kinnevik package. Two of the group’s video-on-demand service has announced it would be launching channels, TV6 and Z-TV are The Kinnevik group, which runs been on stream since February later in the year a digital package already broadcast in MPEG-2, its communications business 1995 in 400 households. The aimed at Scandinavian countries. using the Tele-X satellite. though a subsidiary called Svenska server can stock *00 The initial package, broadcast Modern Times Group (MTG), In September 1995, the Kinnevik feature-length films, which over repeaters 77 and 80 of the had considered extending its group also announced it would should go up to 1 000 by the end satellite, will feature digital channel strategy by be launching pay-per-view of 1996. sixteen channels: apart from joining Nordic Satellite Distri- services and had as such decided FilmNet Television’s three film bution (NSD), in partnership to quit the Astra platform, to Telia Media has reserved 6 channels and sports channel, the with Norsk Telecom and Tele put its channels on the repeaters on Eutelsat’s Hot Bird following channels will be inclu- Danmark. NSD had taken up satellite. 2 satellite, which is due to ded: BET on Jazz International, practically the whole of the satel- be launched in August 1996. Bloomberg Information TV, Dis- lite capacity for broadcasting to Twenty digital channels should Telia Media covery Channel, EBN, Hallmark Scandinavia and had planned to be available by autumn, for and the Alfa project Entertainment Television, Per- distribute the various Kinnevik subscribers willing to rent a formance – The Arts Channel, channels (TV3, TV1000 & Cine- Telia Media was set up in mid- Svensk Kabel terminal. TCC Nordic, Travel, the Weather ma, TV6, Z-TV and TVG, the 1995, following the restructuring Compiled by André Lange Channel, NBC’s international tele-shopping channel). How- of Swedish Telecom. It is the Expert, channels (CNBC, NBC Super ever, the European Commission, focal element of the Alfa project, European Audiovisual Channel, MSNBC and Giga TV). in its decision of 19 July 1995 set up in partnership with the Observatory.

Digital television : composition of packages (channels in project stage are indicaded in italics)

CanalSatellite AB Sat TPS DF 1 Nethold (Scandinavie) BSkyB (analogique) GENERALIST TMC, Paris Première TF1, France 2 Sat.1, NBC Super Channel Chaînes nationales, Sky One France 3, M6, TSR NBC SuperChannel CHILDREN’S Canal J Junior TCC TCC, Nickelodeon Disney Channel SERIES, TV FICTION Canal Jimmy AB Channel 1 Krimi, Herz, Comedy, Western Hatmark Entertainment , The Family Channel, UK Gold The Sci-Fi Channel SPORTS Eurosport France Deutsches Sportfernsehen Super/Sport Sky Sports Chaîne hippique Sky Sports 2, Sky Sports Gold INFORMATION LCI Euronews DF1 Infokanal Sky News FINANCIAL INFORMATION CNBC CNBC, Bloomberg Information, EBN EBN WHEATHER La Chaîne Météo The Weather Channel ROCK MUSIC MCM Musique 1 MTV MTV CLASSICAL MUSIC JAZZ Muzzik Musique classique BET en Jazz COUNTRY MUSIC CMT TRAVEL Voyage Evasion Travel Sky Travel COMPUTER, VIDEO GAMES C : MSNBC, Giga TV OLD FILMS Ciné Cinéfil Star Kino, Ciné Royal, Heitmatkanal Bravo CONTEMPORARY FILMS Ciné-Cinémas Rires, Comedy, Thriller, Action, Western The Movie Channel Romance, Action/Aventure Romantic RECENT FILMS Canal + FilmNet Sky Movies AMERICAN FILMS Hollywood Boulevard Paramount EROTIC FILMS XXL PAY-PER-VIEW Kiosque Cinédom ANIMALS Animaux CARTOONS Cartoons K - toon DOCUMENTARIES Planète Histoire Encyclopedia Chaîne de l’histoire Discovery Channel Discovery Channel Discovery Channel, Leonardo The History Channel CULTURE ARTE (?) ARTE (?) Performance - the Arts Channel AUTOMOBILE Automobile NATURE In project Chasse, pêche, terroir NOSTALGIA Nostalgie VH-1 VH-1 TELESHOPPING In project QVC PARLEMENTARY CHANNEL In project EDUCATIONAL CHANNEL La Cinquième (?) La Cinquième (?) TLC WIMENS CHANNEL UK Living

RADIO CHANNELS 30 30 (DMX) DMX

Source : European Audiovisual Observatory.

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 15 Rules of the game

Problems of social law in international audiovisual and multimedia productions

Legal rules and the way they – the cameraman; fessionals. It should be pointed out are implemented give rise to spe- – the software designer, the deve- that the development of data net- cific problems in international loper, the scanner; works will increase recourse to social law. These problems occur remote working, the technician because the standards defined by – the computer graphics artist, the being connected to a terminal international bodies are drawn up media mixer. either as an employee or self- with reference to national legisla- employed, thus leading to a change tions. However, the latter are The national legal context in the organisation of work and to a characterised by the disparities in risk of lowering the standards of their legal and regulatory terms Basic principles governing social protection. whether in the field of labour rela- labour relations Economic consequences are also tions or the social protection of The work contract likely to emerge with the increase individuals. Disparities are also in delocalisation of production, due to regional characteristics, to This contract establishes a link of subordination with the employer. sub-contracted out by companies different national economic poten- in industrialised countries to tial leading to a gap in currency The clauses lay down the level of remuneration, social contribu- regions with low salaries (South values and, hence, their effect on East Asia, for example). the level of remuneration and tions, the conditions of work, dif- social benefits. ferent advantages in nature or in kind, paid holidays. Social protection systems The socio-economic It may be a non-fixed term work In all European countries specific context contract which, in principle, legislation lays down the standards confers permanence on the post of social protection insuring The expression audiovisual pro- occupied or a fixed term work workers against the social risks duction includes the sectors of contract governed by specific they, as well as their family, are cinematographic production (full- standards. likely to face: sickness, maternity, length feature films or shorts) and invalidity, occupational accidents, television production by television The contract for providing old age, unemployment. services channels to cater for their pro- A comparative analysis of the legal grammes either directly or through The main criteria which character- and regulatory terms highlights independent production com- ise these kinds of labour relations disparities to a greater or lesser panies. are : degree according to the criteria The expression multimedia pro- – the worker carries out his work taken into consideration. Thus Association agreements duction means the computer-assis- independently of any link of sub- the financial contribution by concluded between ted creation of a product resulting ordination with the commissioning employers and employees is countries of central from the combination of digitised agent; established according to variable and eastern Europe rates which affect the amount of and the European Union sound, visual or text media such as – he himself is responsible for the music recordings, photographs, practical organisation and financial remuneration with or without OJEC 31 December 1993, management of his work; upper limits. The same is true for No. L 347 and No. L 348. films, cartoons, written or spoken texts, etc. the conditions for the granting of OJEC 31 December 1994, – his salary is paid gross; benefits paid according to justifica- No. L 357, No. L 358, The concept international produc- – in principle he alone pays for the tion of periods of work and/or No. L 359 and No. L 360. tions in the widest sense of the social guarantees to which he may amounts of remuneration received. term includes: be entitled. Additional protocols to In different countries self- European agreements – co-productions by companies Specificity of labour employed workers are governed by OJEC 30 December 1995, whose registered office is located specific standards. They are No. L 317. in different countries; relations of artists responsible for their affiliation to – productions for which extra- and technicians the general scheme they come European Commission neous factors occur, namely, The audiovisual sector is characte- under. Basically they finance their Directorate General V artists and technicians of different rised by production processes protection and the risks covered Employment, Industrial nationalities; whose duration in time is very are less extensive than for Relations and Social Affairs employees. – de-localisation of production variable and, because of this, it Rue de la Loi 200 generates special working condi- B-1049 Brussels with employment of staff in the country of location; tions which are translated into The international Contact 1: Mr Sergio Piccolo “part-time” employment as part of (in charge of MISEP network) – recourse to a foreign services fixed-term work contracts. This legal context Tel. (32) 2 295 71 09 company to carry out the produc- generally applies to performing The international standards are Fax (32) 2 296 98 48 tion part; artists who do not have employee defined by the International Contact 2: Mr Klaus Käding – the special case of multimedia status, in legal or regulatory terms, Labour Organisation, the Council (in charge of SYSTEM network) productions: remote creation by except in France and the Nether- of Europe, Unesco, the Treaty of Tel. (32) 2 295 55 74 foreign technicians of a product lands. This is also the case Rome and by bilateral or multilat- Fax (32) 2 296 68 48 medium or part of a product for audiovisual technicians, the eral agreements concerning social Contact 3: Mr Yves Chassard medium, etc. exceptions being some of those protection. (in charge of MISSOC system) employed by the national radio and In terms of socio-professional The ILO has conventions which Tel. (32) 2 299 04 75 television channels. establish terms for migrant Fax (32) 2 299 05 09 categories, the following may be mentioned : In the multimedia sector an analy- workers (Convention No. 97), the Contact 4: Mr Paris sis of data on labour relations and minimum standards for social (in charge of the file on the – the script writer, the adapter of a working conditions has not yet security (Convention No. 102) or draft directive on the employ- work, the musical composer, the been conducted. social policy (Convention No. 117). ment abroad of workers artistic director, the director; supplying a service) In terms of categories, the script- In 1992, a tripartite meeting was Tel. (32) 2 296 57 65 – the performing artist; writer, the software designer and held at the ILO on the employment - Directed by Damjan Kozole, produced in 1987. Fax (32) 2 299 98 99 – the director of photography, the the artistic director may be consi- and working conditions of sound engineer; dered as being self-employed pro- performing artists.

16 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 The fatal telephone © Council of Europe.

During the general conference in – for the worker who works in tions of entry and of access to work Information systems exist at inter- Belgrade in 1980, Unesco adopted several countries the law of the of nationals of a third country national level, operated by the a recommendation on the artist’s state where the employer is come within the sole competence International Labour Organisation condition. established. of the member states. and the International Association of Social Security (IASS). The Council of Europe has drawn However, Article 7 stipulates that In all the European countries up different texts in the social even if a different law has been national legislation on immigration Community information field, such as the European Social chosen the employee may not be establishes strict norms, in par- 1 - mutual system of information Charter, the European Convention deprived of the protection guaran- ticular in respect of employment. about employment policies: on the Legal Status of Migrant teed by the law of the country in Given international rules, foreign MISEP. Workers and the European Social which he usually works. workers in the host country enjoy Security Convention. equality of treatment with 2 - community information system The question arises as to what nationals in respect of social legis- on social protection : MISSOC. The fundamental principles under- extent the artist or technician lying these different texts aim at lation. Numerous bilateral and 3 - European documentation sys- concerned is in a position to nego- multilateral agreements exist encouraging member states to tem on employment : SYSTEM. tiate with the producer the choice which guarantee reciprocity of continue to make an effort in the of the most favourable law appli- social protection measures. The Commission publishes these social field, to ensure: cable. different systems in the form of – the guarantee of equality of Association agreements were written documents and in CD ROM treatment in respect of social secu- Movement of employees in the concluded in 1994 and 1995 form called Socibas. rity between all the nationals of context of free provision of between the European Union and states concerned by the conclusion services may lead to a dilution of different countries in central and Information of the ILO of bilateral or multilateral agree- social rights or even to the distor- eastern Europe: Poland, Hungary, and the IASS tion of competition. By way of an ments; Romania, Bulgaria, the Slovak The joint information unit on social example: the case of technicians Republic, and the Czech Republic. security combining the documen- – that only one legislation is appli- who are employees in a Portuguese The provisions stipulate that for tation centres of these two bodies cable: that of the place of work, services company and who are workers from these countries who even if the person concerned working temporarily in Germany. has set up several databases, inclu- are legally employed in a member ding the description of the national resides in the territory of another Their engagement through a work state of the Union there shall be no state or if the company employing contract which is governed by Por- social security schemes in the discrimination on the basis of world. him has its head office in the terri- tuguese legislation will mean that nationality in respect of working tory of another state. their remuneration and social conditions, remuneration and The information, presented homog- guarantees will be lower than that social protection in comparison eneously for each country, is publi- The Treaty of Rome of German technicians employed with the nationals of this member shed in written form and its Inter- and derived EU law to do the same kind of work.2 state. These terms apply subject to net availability is being prepared. the conditions laid down in these It would be especially desirable Labour law Social Protection agreements. that the content of each criterion As far as labour law is concerned Article 51 of the Treaty of Rome Conclusions and suggestions taken into consideration should specific terms are defined in defines equality of social protec- correspond in the comparative Article 48 of the Treaty which tion of the foreign worker who is a This brief analysis of the situation of social law applying to artists and tables including the different coun- stipulates “the abolition of any national of a country of the Union tries, according to the MISSOC discrimination based on nationality with that of national workers. This technicians employed in inter- national productions in the audio- community system. These tables as regards employment, remunera- principle is laid down in detail in could portray regions such as: tion and other conditions of work”. Regulation 1408/71 of 14 June visual and mutlimedia sectors makes it possible to reach the western Europe and central and The situation of workers concern- 1971 (OJEC No. L 149 of 5 July eastern Europe. ing social legislation is regulated by 1971) concerning the application following conclusions : EU law as soon as there is a move of social security schemes appli- – investigations need to be carried The development of digital techno- from one country to another for cable to employees and self- out in the multimedia sector into logies requires reflection as to the the purposes of employment. employed workers and to their work relations, employment condi- role of the information society and families. This text determines that tions and their consequences for its implications for the individual. Regulation 1612/68 of 15 October only one legislation is applicable the social guarantees of workers;3 In this context it seems important 1968 (OJEC No. L.257 of 19 Octo- which is that of the country where that, especially in the area of social ber 1980) on the freedom of move- – the same absence of information the worker concerned does his can be seen for the situation of law, the necessary work be done ment of workers within the Union work. self-employed workers having on the harmonisation of the analy- lays down the terms for access contracts in the services industry. sis of national and international Special situations may occur: and working but says nothing The migrant worker employed legal standards and on the simplifi- about applicable legislation: legal This is the case, for example, of the through this type of contract has cation of the procedures whereby standards of the country where technician who occasionally works rights which are made fragile: they can be made available to pro- the work is carried out or legal in a country of the Union which is badly informed and/or for financial ducers, artists and technicians standards of the place of residence not his own. He remains subject to reasons, he neglects the pro- working in the audiovisual and of the worker as defined by the the legislation of his country as cedures which would enable him to multimedia sectors. Convention of Rome on the law long as he is affiliated there to the enjoy the social guarantees to which is applicable to contractual general social security scheme. If which he is entitled. by Marie Madeleine Krust, obligations of 19 June 1980 (OJEC not, he is subject to the legislation (ADAMI – France). 1 The risk of dilution of social rights No. L.266 of 9 October 1980). of the country where he works. In may be considerable if this kind of 1. Ratified by twelve member states, negotiations the case of the artist, who may be with Austria, Finland and Sweden are currently The text of the convention, in work relationship becomes more an employee or self-employed, taking place. Article 6, states that the work widespread; usually working in two or several 2. A draft directive of 1993 states that, in this contract is governed by the natio- case, the member states must make sure that the member states, he is covered by – For the migrant worker, as for nal legislation chosen by the employees concerned are not deprived of the legislation of his country the producer, obtaining informa- working and employment conditions in force in the parties in the work relationship. country where the service is carried out. This but must inform the competent tion about the legal and regulatory directive is still under discussion. In the absence of choice, the services of his situation. terms in the different countries applicable law is : 3. The ILO is organising a tripartite symposium at seems uncertain because of their the end of January 1997 on the social problems – for the worker who is temporarily Nationals of third countries complexity, their disparity and the linked with the “Convergence Multimedia”. A draft convention on homeworking will be submit- working abroad, the law of the Article 100 C of the Treaty of difficulties encountered in gaining ted to the 83rd Session of the International country where he usually works; Maastricht states that the condi- access to them. Labour Conference.

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 17 Rules of the game

International tax issues facing the European audiovisual industry

This article is a summary – Interest and dividend withhold- – Incentives: Other suggested of a report commissioned from ing taxes: Interest and dividend incentives that would boost invest- KPMG Meijburg and Co. by the withholding taxes add an ad- ment in the European audiovisual Observatory as part of the pre- ditional obstacle to cross-border industry include: paratory work for the expert financing. These withholding taxes – deferral or exemption of tax on workshop on “social, labour may result in double taxation audiovisual profits reinvested in and tax law issues”, which was which is sometimes not eliminated the business; held in Strasbourg on 22 april. by double tax treaties. Although Opinions expressed in this the EU Parent-Subsidiary Directi- – negative corporate income tax article are those of the authors ve already provides for an exemp- subsidies for audiovisual com- KPMG and do not necessarily repre- tion for dividend withholding tax, panies in a loss position; Meijburg & Co. sent those of the European one of the key requirements is that – allowing trading in loss com- Audiovisual Observatory, its a shareholding threshold of at least panies in the audiovisual indus- KPMG Meijburg & Co. members or the Council of 25% must be met. The 25% thres- try; is one of the leading tax hold is too high for audiovisual Europe. – exemption of tax on interest consulting firms in the financing, which typically derives Netherlands. KPMG The European audiovisual industry funds from wide sources, in part, and dividends received from Meijburg & Co. has faces key tax disadvantages, parti- to spread the risk. Moreover, no audiovisual industry. been in business in the cularly when compared to the harmonisation for interest with- Provisions for so-called “SOFI- Netherlands for more than industry in the USA. By necessity, holding tax has been achieved. In CA’s” in France and “Angels” in the fifty years, advising on European players in the industry general, a uniform interest and UK could provide examples of domestic and international must do business across borders. dividend withholding tax rate incentives for the audiovisual tax law. They have twenty- Due to this cross border activity, would be beneficial in order to industry. seven offices throughout the industry is exposed to fiscal remove distortions and tax compe- the Netherlands. obstacles arising due to a lack of tition between EU countries. consistency in rules, treatment and KPMG estimates that overall elimi- Production Their experience and interpretations between European nation of interest and dividend Once the financing is obtained expertise extend beyond withholding taxes for the audio- the Netherlands. KPMG countries. and budgets are approved, the Meijburg & Co. is a member Summarised below is an outline of visual industry would certainly planning and production phase of of the world-wide KPMG the tax obstacles encountered by provide a boost to raising funds. an audiovisual project begins. Group, specialising in the European audiovisual industry – Limitations on loss carry-overs: There are a number of obstacles accountancy and and ideas for possible solutions. Some EU countries have restric- faced at this stage. consultancy. KPMG tions on how far back or forward – Amortisation of production costs: employs more than Formation of capital losses can be carried over. In addi- Many EU countries require pro- 75 000 people in tion, some countries restrict cor- The initial stage of an audiovisual duction expenditures to be capital- 120 countries, making porate loss utilisation where there ised and amortised over a prescri- project involves obtaining the has been a change in ownership. it one of the foremost bed number of years or amortised companies of its kind funds necessary to finance the pro- Such restrictions hamper the to match the revenue stream of the in the world. The clients ject. At this stage, there are several attractiveness of audiovisual of KPMG Meijburg & Co. fiscal obstacles which inhibit the investments which often involve project. Assuming the production have access to the global raising of funds. KPMG estimates financial risks. According to company has other sources of KPMG resources. that in order to encourage invest- KPMG, the elimination of such income, there may be large cash ment in the European audiovisual restrictions for the audiovisual outlays with no immediate tax industry, such tax obstacles should industry is suggested. benefit. In order to eliminate be reduced or eliminated. inconsistencies, the treatment of – Limitations on loss utilisation production costs across EU coun- – Cost of capital: Where a cor- within a group: It is generally not tries should be uniform. Clearly, poration is used to finance a pro- possible for a parent company to according to KPMG, an immediate ject, many European countries deduct the losses of a subsidiary levy a capital tax whereas a located in another EU member write-off of expenses for the audio- number of EU countries have state, unless the subsidiary is liquid- visual industry is ideal. abolished this tax. In countries ated. According to KPMG, the – VAT issues: Although the VAT where capital tax is levied, such ability for a parent company to system is substantially harmonised tax adds to the cost of an audio- offset the losses sustained by a within Europe, there are still some visual project. KPMG estimates foreign subsidiary against its own inconsistencies which result in dif- that to enhance tax neutrality profits would encourage cross-bor- ficulties for the European audio- across EU countries, companies der financing in the European visual industry. In addition, active in the audiovisual industry audiovisual industry. although most input VAT could should be exempt from the capital – Common investment vehicle: The potentially be reclaimed, this tax. risks involved in financing audio- creates an administrative burden – Debt to equity restriction: Gen- visual activities are relatively high, in applying for refunds, particu- erally, a business enterprise which while losses incurred by an audio- larly when filming activities take involves high risks, such as the visual company may not be imme- place in several countries. More- audiovisual industry, calls for a diately taken into account by the over, many European countries do relatively high amount of debt. investor. This situation does not not allow VAT refunds on lodging However, according to KPMG, a encourage cross-border financing. and meals. KPMG estimates that in A possible solution is to establish a number of countries within the EU order to reduce these difficulties, common investment vehicle within apply measures against so-called greater VAT harmonisation is Europe. Such an entity would com- This harmonisation and thin-capitalisation or base erosion. desirable in addition to simplifying bine limited liability with fiscal the VAT refund process. transparency report Such rules can hinder fund-raising. transparency for investors (similar is available free of charge from the KPMG suggest that thin-capitali- – Inconsistent interpretations: European Audiovisual Observatory to the USA “limited liability com- Tel. (33) 88 14 44 00 sation or base erosion provisions pany” or “S corporation”). This Potential double taxation could Fax (33) 88 14 44 19 should not apply to companies balances the risk with the ability to arise due to inconsistency among E-mail: [email protected] involved in the audiovisual industry. immediately deduct losses. European countries with respect

18 Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 Publications

to the interpretations of terms les programmes, les marchés. such as “employer”, “fixed base”, Sequentia Bibliographical Supplement Editions Dixit, Paris, 1996. and “artist” and interpretations of 320FF. artist conduit provisions in double Further references to recent books and publications on the audiovi- tax treaties. KPMG propose the sual sector in Europe can be found in the Sequentia Bibliographi- Griotteray, A.raa L’argent de la formulation of uniform and un- cal Supplement which has been published as a free supplement to télévision. Editions du Rocher, ambiguous terms and interpre- the magazine for paying subscribers since September 1995. Monaco, 1996. 219p. 98 FF. tations of treaty provisions. The current Sequentia Bibliographical Supplement No. 4, can Stephan, D. Rot - Schwartz- – Tax treatment of personnel: For also be consulted free of charge on the European Audiovisual Rot: Rundfunkpolitik in Öste- short-term projects (namely less Observatory’s internet site, http://www.obs.c-strasbourg.fr./ reich 1945-1955. Guthmann than six months), artists are gen- Sequentia.main.htm Peterson, Vienna, 1995. 135p., erally subject to tax in the country For a free sample, please contact the editor : ISBN 3-900782-23-7. where the activities take place Sequentia whereas the other personnel are livre Ms Lone Le Floch-Andersen not. However, the procedures for European Audiovisual Observatory Law obtaining tax waivers and the requirement to file tax returns vary 76, allée de la Robertsau Bancel-Charensol. L. between European countries. The F-67000 Strasbourg La déreglementation des non-resident taxation of audio- Tel. (33) 88 14 44 07 nesritélécommunications dans les visual personnel, including artists, Fax (33) 88 14 44 19 grands pays industriels. should be simplified and harmo- E-mail : [email protected] Economica, Paris, 1996. 350p. nised within Europe. For example, 198 FF. according to KPMG, a flat with- holding tax on net income as a Statistical yearbooks Kagans European Television Bate, S.; Johnson, T., and White. final tax for artists could be imple- (international 1996. Country Profiles and S. Satellite Communications mented, as is the case in the & European) Channel Profiles. Paul Kagan, in Europe: Law and Regula- Netherlands. London, 1996. £300. tion. 2nd edition. Financial Ayre, J. (ed.). The Inter- Times, London, 1996. £135. ITU. World Telecommuni- Distribution national Multimedia Yearbook and licensing cation Development Report: Calow, D.; Lee, A., and Williams, 1995-96. Fitzroy Dearbon, A. Multimedia: Contracts, sk Information Infrastructures Further tax obstacles arise at the London, 1996. 955p., and World Telecommuni- Rights and Licensing. Special distribution and licensing phase of ISBN 1-884964-397. £115. an audiovisual project. cations Indicators. International Report. Financial Times, London, 1996. £125. – Royalty withholding tax: Where a Business Ratio Plus. Telecommunication Union, producer retains the rights to a The Film & TV Industry. Geneva, 1995. 300p., Desjonquères, P. Guide fiscal film and licenses the rights to other ICC Business Publications Ltd, ISBN 92-61-05662-8. 160 CHF. et social des auteurs. parties, the producer generally London, 1996. 456p. CEDAT, Paris, 1995. 286p., earns royalty income which may be Television ISBN 2-86749-012-X. 390 FF. subject to royalty withholding tax. kitapKagan’s European Cable/Pay The adverse consequences of TV Databook 1996: Baudelot, P. and Eymery, G. royalty withholding tax may be Exclusive Cable & Pay Les satellites et l’audiovisuel. This list was compiled by mitigated by double tax treaties. TV Market Penetration and Les techniques de diffusion, le Lone Le Floch-Andersen, with the kind assistance of However, not all treaties contain a Revenue Forecasts numérique, le pay-per-view, 0% withholding rate. Moreover, the Deutsche Bobliothek, Through 2005. Paul Kagan, l’interactivité, la réglementa- not all countries are covered by Blackwells treaties. In addition, double tax London, 1996. £335. tion, les chaînes européennes, and Medien Perspektiven. relief may arise since the royalty withholding tax is generally im- posed on gross royalty income Edito whereas the foreign tax credit may be limited to the resident tax on Subscribe to Sequentia 1996 now ! the net royalty income. In order to mitigate these problems, KPMG We are offering the 1996 subscription for only 100 FF estimates that there should be an to subscribers from eastern and central European countries exemption from withholding on royalties from audiovisual rights. and 200 FF for subscribers from all other countries. ✂

– Definition of royalty: There could skyrsla✂ be interpretation differences Yes, I would like to subscribe to Sequentia, the quarterly Name / Surname between European countries as to magazine of the European Audiovisual Observatory, what constitutes a royalty, particu- offering reliable and comprehensive information on the Title/position larly in the context of technical audiovisual sector in Europe. service and technical assistance Subscription rates for 1996 (4 issues) : 200 FF Company fees. A uniform and unambiguous Subscription rates for central & eastern European definition of “royalty” should be subscribers: 100 FF Field of activity formulated for all EU countries. Please send me (quantity) subscriptions of Sequentia: – VAT on audiovisual products: EU x FF = FF Address member states impose VAT on ❏ in English ❏ in French ❏ in German audiovisual products (for example, Postal code / town ❏ Credit card : ❍ Visa ❍ Eurocard / Mastercard * cameras, videotapes, cinema tickets, etc.). In order to boost the Card No: Country European audiovisual industry, KPMG suggests that a goal should Expiry Date: Signature: Phone Fax be for the audiovisual industry to ❏ Cheque in French francs payable receive preferential VAT treat- haandto the European Audiovisual Observatory E-Mail ment, with reduced or zero VAT rates on audiovisual products sold. Please return this form to : European Audiovisual Observatory, 76, allée de la Robertsau, F-67000 Strasbourg Phone (33) 88 14 44 00 – Fax (33) 88 14 44 19 – Attn: Anne Boyer, Administrator, [email protected] This would lower costs to consu- The above data will be processed in the database of the European Audiovisual Observatory and may be communicated to third parties. In mers and attract more sales. accordance with the rules concerning databases and the protection of privacy adopted by the Council of Europe, all those that appear in the by Gerrit te Spenke, Observatory’s address database have the right of access to the information concerning themselves and to ask for the modification or remo- val thereof. If you do not want your data to be communicated, please tick this box: ❏ KPMG Meijburg & Co. * Unfortunately, American Express cards are not accepted. The Netherlands.

Sequentia Vol. III, No. 8, JULY/AUGUST/SEPTEMBER 1996 19 Transparency

andTransparency Harmonisationand Harmonisation Work

Better information flows AVAILABLE REPORTS : report is an analysis of the general problems linked to the topic. It dis- and improved transparency International film cusses the official data collection and television process and the one undertaken by of information have been identified co-production contracts professional organisations. as two of the major problem areas requiring The report summarises the results of two working sessions on this topic Statistical data attention in the European audiovisual sector. and reproduces the preparatory on the film industry study that the Observatory commis- in Europe They have both been major areas of activity sioned from the Brussels – based The report identifies the main of the European Audiovisual Observatory organisation Cerica. It identifies the sources and definitions for data on need for information on legal issues the film industry and discusses the since its foundation. The Observatory involved in international co-produc- data collection process on relevant tion contracts and makes concrete topics such as investments and acts as a co-ordination centre proposals for practical solutions. production costs, the number of Workfilms produced, theatre admissions, but does not have any regulatory power. Social and tax law amongst others. The report con- questions in international cludes by raising the question of We provide the platform film,TV and multimedia an evolution of national statistics productions towards more harmonisation and the for analysis and the proposals for solutions. recommendations to be formulated If the European audiovisual labour in this respect. market is to operate correctly and The different publications and services the people working within it are to be of the Observatory already contribute adequately protected, then access Statistical data to information on tax and labour law on video to the aim of improved transparency. and its unrestricted circulation are and new media essential. Lack of information in this statistics The other part of activity in this field area has already acted as a hind- Three basic questions are addressed erance on the development of the are the workshops on various themes in the report: questions related to sector’s economic activities. The aim data on home video hardware and – of the report is to make the profes- in the context of an almost total lack related to statistical, legal and practical sionals more aware of the problems of official statistics – questions rela- in tax and labour law that they are information issues. The Observatory ted to data collection on software liable to run into when undertaking an and the multimedia market. summarises the experts’ discussions international film, TV or multimedia production. and recommendations aimed at finding Gathering data RAP: resources on domestic appropriate solutions. for audiovisual audiovisual equipment productions in Europe Gathering statistical data on a Euro- The first phase of the Observatory’s work There is a multitude of financial pean scale on audiovisual equipment sources for the production of raises a number of methodological towards more transparency and improved audiovisual works in the different problems that are discussed in the European countries. The RAP study report. Particular subjects to the dis- information flow will be completed examines both public funding mecha- cussions are the number of tele- at the end of 1996. nisms and private sources (private visions and VCRs, the equipment financiers, broadcasters, distributors to receive channels broadcast by The work will result in a series and sales agents) on a regional, cable and satellite, equipment in new national and international level. The media hardware and interactive tele- of concrete reports that will be published study is carried out in collaboration vision. with the CNC and Eurimages. during the autumn of 1996. Legal information TO BE PUBLISHED : in eastern and central Europe Statistical data on the production A general lack of legal information and distribution related to production and distribution of audiovisual works can be obser- of TV programmes ved in eastern and central Europe. There are no existing indicators and Little co-ordination and information methodologies that could be con- flow takes place between these sidered as the unanimous basis of countries in the legal field while researcher’s work in this field. knowledge of western European Indeed, the statistical evaluation of legal documents is very widespread. the production and distribution of A preliminary study from the NET- television programmes is one of the COM Institut in Leipzig results in most complex that the Observatory twelve recommendations to improve undertakes. The objective of the the situation.

For further information on these reports, please contact : Markus Booms, Marketing, tel. (33) 88.14.44.06; fax (33) 88.14.44.19 E-mail : [email protected]