Future TV

Bridging New Zealand’s digital TV divide is no easy task. Attempts to get any digital TV service in New Zealand that isn’t Sky have hitherto been a disaster, and it’s also unclear what scope there might be to overhaul Sky’s lead.

The consolation is that these were roughly the circumstances when Freeview launched in Britain in 2002.

Freeview was the British government’s solution to the collapse of ITV Digital, the private DTT (digital terrestrial) venture that overpaid for sports rights and closed in 2002 with debts of £1.4 billion. (If you think that sounds bad, note that at the same time, NTL, the company that TVNZ wanted to bring into a pay-TV joint venture in 1999, was teetering on an overdraft of £12 billion.) The BBC was asked to come in as the anchor tenant for a new, free-to-air, DTT platform.

Any broadcaster that paid the entry price (£11 million) would become part of the Freeview offering. Consumers would buy their own digital TV decoders from high street shops. It worked. Freeview is now watched in more than ten million British homes — a roughly equal share to Murdoch’s BSkyB pay service. The Blair Government has once again begun to tout a full switchover to digital broadcasting in 2012.

TVNZ, which is driving the Freeview project here, will be hoping for that kind of uptake. But, as everyone will doubtless be at pains to emphasise, Freeview is not TVNZ (for that matter, until notice to the contrary, Freeview isn’t officially anyone). It will be an independent platform available to anyone who wants to play: for now, TVNZ, Canwest, the New Zealand Racing Board, Maori Television and, probably, the Sky-owned Prime TV.

Freeview won’t provide satellite or terrestrial access to new entrants, who will have to make their own deals for broadcasting bandwidth with Optus or BCL. The only onscreen service it will provide is a shared electronic programme guide (EPG).

Its role offscreen will be rather more crucial: making sure Freeview decoder boxes are in the shops. Helpfully, the success of Freeview UK means that both standard DVB decoders and the more sophisticated PVR-type devices are now very much commodity products.

But New Zealand lacks one key advantage enjoyed by Freeview in Britain. ITV Digital spent millions of pounds improving transmission infrastructure; when it went bust, that infrastructure remained as a sunk cost. This is important, because while DTT is received through existing TV aerials, the signal is more sensitive: if you get a fuzzy picture on analog TV, you may not get a picture at all on digital.

Hence, subsequent to a cabinet signoff that was pending as this column went to press, Freeview will launch as a satellite service, probably by the end of the year. A DTT version will begin rolling out three or four months later. If you already have Sky Digital, your existing dish will get the satellite signal, but you’ll still have to find room for another box.

The economics here are ugly. The national satellite service is essential because DTT will simply never reach some parts of the country, but DTT (which will be delivered by BCL) is essential because it represents the untapped market of households that don’t already have Sky dishes.

What kind of programming will induce viewers to spend $200 or $300 on a decoder, or even more on a dish? You can expect TVNZ to sprout one or two new channels, if only to allow it to satisfy its obligations by showing charter programming in prime time. It will probably also follow the BBC’s example in using its digital channels for subsidiary programming — so Dancing With the Stars screens on TV One and Dancing With the Stars: Backstage! airs on one of the digital channels.

There would certainly be a market for the likes of the superb documentary programmes that now air on BBC Four. But neither emulating nor acquiring BBC programmes is cheap these days. Good programming can be made for less money (BBC Four’s wonderful Holidays in the Danger Zone is basically two guys visiting strange countries with a digicam), but that would mean the local independent production sector disembarking from the NZ On Air gravy train and doing more for less.

At Canwest, the profitable crime dramas will stay on TV3, but the canny acquisitions of its C4 music channel may provide a lead for its digital plans. There’s probably room for a new entrant to serve Auckland’s increasingly diverse ethnic communities.

In the end, all the Freeview players will have to work hard at programming to support the new platform. The alternative is effectively an abandonment of terrestrial broadcasting in favour of a satellite platform controlled by Sky. And, as we have discovered in the telecommunications sector, having a monopoly distribution network in the hands of a company that also competes at the retail end isn’t very nice.

russb@dubwise.co.nz