Get Ready for Digital Conference. Free-to-air television in the digital era. Kim Dalton. Chair, Freeview. Director of Television, ABC

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1 Get Ready for Digital Conference Sydney 30 th and 31 st March 2009 Free-to-air television in the digital era Kim Dalton Chair, Freeview Director of Television, ABC P a g e 0

2 TITLE SLIDE It s a pleasure to be here at this historic event. Historic because this conference represents a very public step by the Federal Government on the path to digital switchover and a demonstration of its commitment to the significance and role of the digital economy. Organised by the Digital Switchover Taskforce, opened by the Minister, and gathering together every major player in the broadcasting and digital media area to outline their role and their contribution to the new digital era. It s more than an expression of possibilities out into the future. It s actually a series of very public commitments to concrete plans and timeframes. However, it is also historic because I am able to stand here and speak to you as the Chair of Freeview on behalf of every major free-to-air broadcaster about our combined plans and commitments to the Government s digital switchover program. And most importantly, to put on the record Freeview s commitment to ensuring a smooth and successful transition into the era of digital television. The free-to-air broadcasters are the most dynamic, dominant and pre-eminent sector in Australian television. Across the years and still today free-to-air television has delivered to all Australians across the nation news, information, entertainment, comedy, drama and factual programming. Programming which has kept Australians informed and entertained, programming which has helped define us as a nation, programming which has created stars and breakthrough talent, programming which has taken Australia and Australians to the world, P a g e 1

3 and programming which has trained and employed thousands of creative and highly skilled Australians and developed our local film and television industry. In the analogue world the free-to-air broadcasters could own this space, could claim this position of market dominance and pre-eminence, by simply being there. However, in this fracturing and fragmenting world, of expanding choice across multiple channels, multiple platforms and multiple devices, the existence of Freeview is a recognition that in the digital world we need to actively and strategically establish, brand and promote our platform. The freeto-air digital terrestrial television platform. And in doing so, working together under the banner of Freeview, we will ensure that the digital era will deliver to all Australians expanded and improved free-to-air television services. At the same time, and with a shared and common purpose, we will work with Government to ensure that it achieves its goals and objectives around digital switchover. So today, I want to speak to you about the journey that Australian free-to-air broadcasters public and commercial have embarked on. A journey from single channel and single platform analogue broadcasters to multi-channel and multi-platform broadcasters. A journey necessitated by the decision to move from analogue to digital technology to deliver our free-to-air terrestrial broadcasting system. A journey which in some important respects will mean different things for different broadcasters but which for all of us will cause us to rethink the way we create content, the way we think about audiences and the way we deliver our content to these audiences. P a g e 2

4 And I also want to outline to you what Freeview is, what are its key objectives and messages and what it will deliver over the next 12 months or so. But before I get underway, I would just like to reinforce what I believe to be the continuing importance and influence of television as a form of content, as a medium for communicating and reaching into people s houses and lives. There are those who express the view that we are fast moving into the post television, post linear content era and I think many of their claims and predictions are simplistic and exaggerated. Television is and in my view will remain for many years to come the most pervasive and persuasive form of popular culture. It is fundamentally a linear form and it remains and will remain the only form of media able to aggregate very large audiences. In Australia, as in most countries, television is a critical and defining part of the local culture in terms of drama, factual, entertainment, sport, news and current affairs. In Australia, as in most countries the television production industry also forms the bedrock of the film and television production sector and the creative industries more generally. There is no doubt that digital technology and the resulting ability to dramatically increase the amount and type of linear and non linear content we can produce and deliver to audiences across ever increasing numbers of channels and platforms to an increasing range of devices is bringing about huge change. Audiences are fracturing, national boundaries are threatened, business models are under stress. Yet the power of television to deliver news and information, narratives and entertainment, and to engage with audiences, remains pre-eminent. The challenge I think for free-to-air broadcasters, here in P a g e 3

5 Australia and elsewhere, is to work with these changes, to focus on and continue to do what we have always done well, but to recognise the changing environment and recognise that digital technology now allows us to do so much more. Digital technology offers us the opportunity to provide more content in more ways across more channels and platforms to more people. By any measure that has to present opportunities, and provide a foundation for continued success. However, it also brings with it threats, or at least enormous challenges. Challenges not least to commercial business models which are based around the aggregation of large and singular audiences. However, challenges also to Governments with regard to how they create the conditions for a sustainable, robust, efficient and effective television sector which delivers diverse, relevant and at least in part local services and local content to all Australians, and for free. So, let s have a look at the environment in which we are working. The digital environment, the changes that have come with it and the way in which these changes have in fact impacted everyone involved with screen content producers, broadcasters and audiences. And then, Freeview, the organisation and the platform, and how Freeview will be a central player in driving digital take up and in the delivery of free-to-air television in the digital era. Broadly speaking the broadcasting environment is similar the world over and it can be looked at under three distinct headings: technology, audiences and policy. P a g e 4

6 The big change which is happening in most free to air broadcasting systems around the world is of course the move from analogue to digital. In Australia the Government has determined that the free to air analogue signal will be switched off by the end of This means moving from a technology which was characterised by two things. Firstly, scarcity. Spectrum is of course limited and the analogue signal is not an efficient user of that spectrum. The result in Australian metropolitan areas is that we have been limited to delivering only five channels. Five networks with one channel each. There has of course been debate around a fourth commercial network, but that goes to policy, and some would say politics. However, the point remains, spectrum and the ability to deliver channels across it is scarce. And secondly, analogue technology is linear. We broadcast out to our audiences and there is no back channel, no way of them talking back to us, becoming engaged or involved. Communication is one way. Digital technology on the other hand is about abundance, about more of everything and more ways of doing things. In the area of production, no longer do we have a piece of film or tape which has a beginning, a middle and an end and which has a chronology and a structure which is fixed. With digital we can shoot a news story, a comedy, a documentary, or any other form of program once, and then segment it, chop it up, re-purpose it and re-use it with great ease and as many times as we like. We can create our content once and then use it as many times as we like. In the area of distribution, we can take our analogue spectrum allocation and get multiple channels out of it. All the metropolitan networks had one channel P a g e 5

7 where now they can broadcast two standard definition channels, one high definition channel and hopefully, at least for some of us, more standard definition channels in the near future. On top of this, as broadcasters we can deliver content across multiple digital platforms and in particular via the web. We can stream, download, operate web sites and web portals. The opportunities for getting our content out to audiences are now many and varied. And in the area of consumption, digital technology has placed choice in the hands of our audiences. No longer do they have to gather in the living room of their houses all together at an appointed time to sit in front of the television screen in the corner of the room. What is on offer now is an ever increasing array of content available on multiple channels and multiple platforms which they can choose to watch when they want to watch it and where or how they want to watch it. They may record their favourite program on their digital video recorder and watch it a day or two later at a time convenient to them. However, they may also want to watch it on their computer in their bedroom or on their ipod or iphone on the bus going to work. With young people in particular, we are dealing with the what, when and where generation. So that takes us to audiences and how their expectations and behaviours are changing. Firstly, audiences are shifting. From free-to-air to subscription platforms via cable or satellite, from the traditional television set to the computer and the internet, from broadcasters to peer to peer exchanges and web based social networking sites. These changes are significant and are impacting on P a g e 6

8 traditional viewer loyalties, on the overriding importance of brand, on the ability to promote and share content and ultimately on advertiser based business models. Secondly, audiences expect ever increasing amounts and levels of choice. Choice of programs, choice around the nature and scope of content, choice around when they view programs, choice around how and where they view their content. And if the choice isn t there, they ll go elsewhere. These days, particularly with young people, as a broadcaster we are just another content provider. And thirdly, increasingly audiences want to be able to participate. Perhaps minimally, often marginally and at times it may simply be that the opportunity has to be on offer or the program must have elements of participation built into its look and feel. Even if they are not interacting, audiences need to know that they can or that others are. Finally though, and I cannot overstate the importance of this point, audiences still expect high production values. Much of the material viewed, accessed or exchanged on the web is professionally produced material. An excerpt of Underbelly, a clip from Rove, an episode of Battlestar Galactica viewed on U Tube or exchanged as a file between friends is still professionally produced and expensive television. It may be free and easily accessible, it may be legally or illegally exchanged, but somewhere in Australia or somewhere in the world it was carefully crafted by highly trained professionals using the latest technology and all of this supported and paid for by someone s business model. P a g e 7

9 Audiences fundamentally are still seeking out good stories well told and in my view the notion that we are moving into a universe dominated by blogs and home video clips or mash ups and other forms of user generated content is misguided. Alternatively, if we are moving into a world where the only content is from overseas, and notwithstanding their protestations, this substantially describes the present pay tv offering in Australia and will certainly characterise any IPTV services, then there are some fundamental policy questions to be asked. It is either wilful ignorance or some form of cargo cult to do as many media journalists and commentators in Australia do and marvel at the ever increasing array of content delivered to their television, computer or handheld device without ever questioning the origins of this content, the issues it presents around sustainability for local content creation, or the broader and ultimately quite profound cultural and economic implications. And this brings me to the final area of change in the environment. It s perhaps the most complex and certainly the most difficult to talk about to an audience from across a range of competing interests and sectors. However, if this conference in its title is a call to action then part of getting ready should be to address a fundamental question in this digital era which is about the integrity of national cultures and the importance of locally produced content. Television, broadcasting and the screen content industries more generally are fundamental elements of our culture and our society and all governments exercise some level of control in order to achieve certain outcomes. However, in the digital era, in Australia, as in many other parts of the world, while the policy objectives remain similar, the mechanisms by which to achieve them are under increasing challenge. For the most part they are mechanisms designed P a g e 8

10 for the analogue era and increasingly they are not fit for purpose in the digital era. Let me explain briefly what I mean while hopefully not being too simplistic. For the most part, in designing and organising a broadcasting system, governments have access to four policy levers or interventions. Public broadcasting, direct funding, indirect funding through taxation or other mechanisms, and regulation. Regulation applying to the numbers of players, the types and numbers of services, access to different types of content, such as sport, rules around classification, levels and scheduling of advertising and most importantly, the nature and extent of local content versus foreign content. Public broadcasters the ABC and SBS - inevitably get the lion s share of direct public funding through direct appropriation. Public broadcasters also access much of the direct funding available through other government sources such as film and television funds. Indirect funding to support local production, usually tax based, flows to both public broadcasters, to the free-to-air broadcasters and to a lesser extent, because they are involved in relatively low levels of local production, to pay tv operators. These funds do not come directly to broadcasters, but finance independently produced content commissioned by the broadcasters and form a critical element of the content value chain. There is virtually no direct funding available for creating or delivering online content, and as a direct consequence, Australian television unlike elsewhere in the world is supported by very limited levels of complex, rich media local content online. And finally, regulation around levels of local content applies for the most part to the free-to-air broadcasters, in a very P a g e 9

11 limited way to subscription operators and not at all to web based content providers. And as a result of these interventions by government what do audiences see by way of locally produced screen content. A relatively high level on the public broadcasters and the free-to-air broadcasters, a limited amount on the pay services and little or nothing on net based services. However, what we also know is that over time we have seen a shift of a significant proportion of the total audience from viewing in large numbers the singular offering of free-toair broadcasters to viewing in small and fragmented groups across a much greater range of services delivered on multiple channels by pay operators. This has of course led to a related shift of revenue and challenges to production funding models. A share of the audience and the associated revenue have moved from the highly regulated free-to-air sector to the largely unregulated pay or online sector, with this revenue largely being used to fund new and additional delivery infrastructure and high volume low cost mostly international acquisitions. The result of course is the beginning of a fundamental disconnect between social and cultural objectives of government and the actual outputs of the broadcasting system. As a result our local culture and our local screen content production and more generally our creative industries sectors are most under threat. This is a very brief snapshot of what is a complex set of issues. But let me move on from this overview of the environment, away from threats to opportunities and how free-to-air broadcasters have and will continue to respond. How free-to-air broadcasters operating in this dynamic and changing environment will over the next few years redefine television I think in a very positive and successful way. P a g e 10

12 So, to Freeview. Freeview came together in April of last year. An initiative of the commercial free-to-air networks, it brought together all of Australia s major free-to-air broadcasters, between them reaching 98% of Australian households. And its vision is unambiguous. To maintain free-to-air terrestrial television as the viewing standard, the preeminent viewing platform for Australians in the transition from analogue to digital. To continue to provide free, compelling television services to all Australians. Freeview will achieve this vision through a straightforward but quite compelling offering. Freeview will be at the forefront of driving digital take-up, it will play a key role in the Government being successful in its plans for digital switchover, and its message to consumers will be very straightforward. Freeview will offer an enhanced television experience. First and foremost with more content across more channels. Digital will also offer better picture quality P a g e 11

13 and better sound quality. Improved navigation and a range of functionality in this multi-channel environment through a Freeview Electronic Program Guide. All of this of course will be for free with no ongoing costs and no contracts. In short, Freeview is taking us from the analogue environment where the five metropolitan networks and the three regional networks speak to and communicate individually with consumers who themselves for the most part are using a single means of delivery. And where from the consumer s point of view choice, in the free-to-air space, is limited to a maximum 5 channels. Freeview is taking us from this environment to the digital environment where in metropolitan regions by the end of this year consumers will be able to access at least fifteen channels and possibly more. And where in the not too far distant future much of that content will also be available on demand and online and where that same content will also be pushed out onto new and emerging platforms. All of this is of course about and dependent on digital take-up and Freeview is working with manufacturers and retailers to ensure consumers are able to purchase the required and appropriate digital devices. We are also taking our message about the benefits of digital and Freeview into Australia s 8 million television homes through our own on air promotional and informational P a g e 12

14 program. The combined power of all the networks across metropolitan and regional Australia delivering a single and focussed message and promoting the Freeview brand cannot be overestimated. And finally, we are also working closely and in partnership with the Government s Digital Switchover Taskforce. Extensive consultation has taken place with manufacturers for over six months and our approach has been to get devices in store as soon as possible. The initial plan was to launch with a Freeview branded proprietary EPG. This plan had unforeseen technical complexities for both Freeview and the manufacturers and it has therefore been decided to launch in two phases. Phase 1 in-store in May 2009 with digital equipment that has a manufacturer's EPG, HD capability, and an MPEG4 receiver chip. Phase 2 products will be in store in December 2009 and will deliver a Freeview proprietary EPG. Phase 1 products will continue to be supported by Freeview, so no consumers will be affected adversely as the technology develops. retailers have supported this approach. The manufacturers and Phase 1 launch is underway. Product technical specifications, license agreements and branding guidelines were released to manufacturers under Non Disclosure Agreements on the 5th February. To date we have 7 executed licenses and envisage we will have 15 executed licenses by the end of April, which would cover a significant representation of brands ranging across all price points from lower priced set top boxes, through DVR s, to all price range digital televisions. P a g e 13

15 All stakeholders in the process have been engaged in the past few months - including all major electronics manufacturers and all leading electronic retailers. A new information and promotion campaign is being developed and will go to air 26 April 2009 across the country on all channels, every night in prime time for approximately 6 weeks. This campaign will respond to the key questions in the minds of consumers - "What is Freeview?" and "How do I get it?" with a call-to-action to go in-store and talk to retailers about the required equipment. Over the coming weeks an extensive retailer education campaign will be undertaken to ensure retail staff can respond to questions and convert enquiries into sales of digital equipment. There is no doubt that in the multi channel and what, when and where world, smart and functional navigation is critical. Accordingly, Phase 2 development of the Freeview proprietary EPG continues, and we are undertaking intensive discussions with the patent holders in this space with a view to negotiating an 'umbrella' license agreement to assist our manufacturers. When this EPG is delivered and available in December 2009 it will more than match the aesthetic qualities, the ease of use and the functionality of any other EPG in the market. Freeview also intends to lead in the delivery of quality television in the multi channel and multi platform world and it will continually develop the nature and extent of its offer to viewers. Freeview intends to offer its own television online and on demand service encompassing catch-up, streaming, download, pay-per-view and pay-to-own. This will be the most extensive online television P a g e 14

16 service in Australia delivering the combined programming and inventories of all of the free-to-air networks to all Australians. All of which brings me back to where I began. An historic event around television, and the belief that television remains the most important and influential media in Australia. And Freeview itself, in this mix, is historic. Historic because it has brought together all of Australia s major free-to-air networks, but also historic because it marks a new chapter in Australian television. Freeview is engaging in the dynamic and changing landscape which is digital television. Within twelve months the Freeview brand will define and describe the free-to-air terrestrial digital television platform and it will be synonymous with free-to-air television in Australia. It will offer improved quality, extended choice of content and convenience of viewing. It will of course be free and it will clearly establish to our viewers that Freeview and free-to-air television keep getting better. Thankyou. Kim Dalton 30 th March 2009 P a g e 15

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