1. TNO Strategy, Technology and Policy Digital TV switchover policies in Europe Cross country analysis of market structure, DTV penetration and switchover policy Martijn Poel With Simon Delaere (VUB-SMIT) & Andra Leurdijk (TNO) poel@stb.tno.nl

2. 2 Outline Switchover policies: an integrated approach Research framework and methodological issues Market structure and innovation Switchover policies in five EU countries Preliminary conclusions and research issues

3. 3 Switchover policies: an integrated approach Competition in DTV services, platforms and infrastructures Innovation in DTV services, platforms and infrastructures Industrial policy (media, equipment, infrastructures) Access and diversity (media, social, cultural policy)

4. 4 Research framework… Innovation - Digital TV via broadcasting infrastructures (eg set top box) - Online audio-visual services - Availability and penetration National policy - Switchover policy - Media policy - Innovation and industrial policy - Regulation / competition policy Market structure - Competition in infrastructures, platforms and content/services - Vertical integration - Entry barriers European / international policies National contextual factors National market dynamics, strategies, business models (behaviour/conduct) International market developments, technology, production

5. 5 …and methodological issues Market structure Dynamic, platforms, services/content, relevant markets: service ("free", basic pay TV, premium pay TV) and geographic (eg availability) Focus on infrastructure and platform competition Innovation indicators Availability, penetration, services innovation (eg interactive, internet) Focus on digital TV penetration Policies "More" policy, timing and impact, interference Structured case studies (qualitative) Linking market structure, policy and innovation Case studies, inspired by basic statistics (background)

6. 6 Market structure and innovation (1) Terrestrial countries FR, IT, SP, GR Cable countries B, LUX, NL TNO based on data EC / Strategy Analytics (2003)

7. 7 Market structure and innovation (2) Terrestrial and cable countries Market share main infrastructure Growth DTV penetration / TV HH (2002/2003) TNO based on data EC / Strategy Analytics (2003)

8. 8 Market structure and innovation (3) TNO based on data EC / Strategy Analytics (2003) FR LUXB NL GR UK IT D IRL PO FI SW DK SP A EU

9. 9 Switchover policies in five EU countries Selection based on diversity Similarities, linked to EU policy: Switch-off date to be decided General frameworks on copyright, DRM, digital reproduction Implementation of EU-package on electronic communications Market analysis in progress Focus and main differences (next slide)

10. 10 SwitchoverMedia Innovation / industrial Competition / regulation UK Digital TV Project / Action Plan (2001), free-to-view satellite package? BBC is one of the drivers (content and Freeview), spectrum pricing? DTV/content is a topic in ICT (and horizontal) innovation policies CAS, EPG, BskyB, OFCOM, Driving digital switchover (2004) France France Television in pilots, obligation to use digital terrestrial RIAM programme on innovation in AV/media, 29 m (2001-2003) Wallonia RTBF in pilots, additional resources DTT? Flanders VRT is one of the drivers: e-VRT, 60 m (2001-2006) Flanders Interactive (2003-2004) and e-VRT/ @Media, link to IBBT (2004) Netherlands Media related policy on terrestrial network platform operator DTV/content is a minor topic in ICT innovation policies Rebalancing of cable tariffs?

11. 11 Preliminary conclusions and research issues (1) Competition between infrastructures appears to be more relevant than competition between digital TV platforms Existing infrastructures compete to become leading in digital TV, eg competitive satellite UK vs dominant cable in NL Competition and collaboration between digital TV platforms? Importance of national market dynamics, incentives of established operators and broadcasters, eg access to content (BskyB) and access to DSL platforms (FT)

12. 12 Preliminary conclusions and research issues (2) Digital TV / content innovation policies: differences in approach and policy instruments, eg Flanders - NL - UK Public broadcasting policy/strategy to stimulate digital switchover, but there are exceptions and budget cuts Terrestrial countries are not leading in digital terrestrial Delay of switchover roadmaps: trade-off between policy objectives, between short and long term costs and benefits?