1. Digital Terrestrial Television in the UK Khalid Hadadi BBC EU and International Policy
Over the next fifteen minutes, I plan to give an overview of the BBC’s perspectives on development of Digital Terrestrial Television (otherwise known as Freeview) in the United Kingdom.
Over the last few years the BBC has launched more new TV channels and radio networks than in its entire 80 year history. This together with our continued development of our online and interactive television services has seen the BBC embrace the digital world.
In fact far from becoming an irrelevance in the digital age, as some had predicted, the BBC is actually playing a significant role in driving digital take up in Britain.

2. The TV market in the UK today
Terrestrial
Satellite
Cable
Digital
30 channels
300+ channels
100+ channels
5 channels
About
50 channels
Analogue
The BBC as a public service broadcaster has over its 80 year history always had a role in delivering to the public the benefits of new communication technologies and services. This has been underlined in the new BBC White Paper which was published this month – the UK government has required the BBC to take a leading role in the switchover to digital television.
Our involvement in promoting Freeview is consistent with our role as a public service broadcaster. With our purpose of building digital Britain and preserving the universal availability of our services.
This does not mean that we favoured the DTT platform over other platforms. European Union law does not allow public institutions to use public funding to favour one telecommunication technology over another.
Overview of the TV market in the UK today.

3. Digital Terrestrial Television in the UK
Why does DTT matter?
The launch of Freeview
The Freeview offer
The future for Freeview
I would like to provide an overview of my presentation:
Why does DTT matter?
The launch of Freeview
The Freeview offer
The future for Freeview

4. Why does DTT matter?

5. 2002… the digital haves and have nots
Around 38% of UK homes already had digital TV
Satellite (Sky) 6m
Digital Cable 2m (plus 1m analogue cable)
DTT (ITV Digital) 1m
Total Digital 9m
That left 15 million UK homes who did not have digital television services
In 2002, when the BBC got involved in the Freeview Consortium, around 38% of UK homes already had digital TV. The majority of whom subscribed to Satellite pay-TV services.
What the slide clearly shows – there was already a gap between the early adopters of technology and those for whom the journey to digital hadn’t even started.
Furthermore, research by the UK’s Department of Trade and Industry at the time suggested that as many as one-in-eight people will never be convinced to adopt digital TV.
This may not be a critical issue for commercial broadcasters, who can target different groups with different programmes and services, but for the BBC it represented a huge challenge, as we have a duty to serve everyone, due to our funding by the licence fee – paid by (almost) every home in the UK.

6. 2002… the analogue audience
15 million homes yet to go digital
Split into future Pay TV customers, and future Free TV customers
Pay TV
Positives
35% / 5.1m
Unsures
25% / 3.7m
Negatives
40% / 5.8m
Free TV
So what’s clear is that this is not going to be a single journey to a fully digital Britain. It is going to be millions of different ones, with everyone travelling at travelling at different speeds.
One of the key challenges for the UK and the BBC is to make sure that nobody gets left behind.
In the digital world – we believe everyone should have a choice of platform whether they want free to air TV or to take out a subscription.

7. The launch of Freeview

8. Conceived and born in 6 months
March 02
ITV Digital collapsed
June 02
Applications closed
May 02
ITC published
invitation to apply
September 02
Technical
readiness
July 02
Licenses awarded
to BBC & Crown Castle
So a brief synopsis of the Freeview story:
The launch of Freeview happened very quickly indeed.
March 2002 – ITV Digital fails
July – The BBC wins the licence bid with Crown Castle
October – launch
30 October 02
Consumer launch

9. The failure of ITV Digital
ITV Digital handed back their licences for 3 DTT multiplexes in March 2002
ITV Digital failed for a number of reasons:
Direct competition with Sky Digital and cable for same customers, but without premium content, range of channels or interactivity.
Weak technology – dissatisfied consumers and high levels of churn
Over payment for sports rights led to cash problems
ITV Digital handed back their licences for 3 DTT multiplexes in March 2002
ITV Digital failed for a number of reasons:
Direct competition with Sky Digital and cable for same customers, but without premium content, range of channels or interactivity. A pay-TV DTT service.
Weak technology – dissatisfied consumers and high levels of churn
Over payment for sports rights led to cash problems

10. The BBC-Crown Castle bid to the ITC
The basis of the BBC and Crown Castle bids to the Independent Television Commission (ITC) was three-fold:
1. The technical failings of the platform would be resolved
2. The proposition would be free – pay cannot work on DTT
3. The consortium would actively promote DTT to consumers and drive digital take-up (with Sky)
The basis of the BBC and Crown Castle bids to the Independent Television Commission (ITC) was three-fold:
1. The technical failings of the platform would be resolved
2. The proposition would be free – pay cannot work on DTT
3. The consortium would actively promote DTT to consumers and drive digital take-up (with Sky)

11. Why is the BBC involved with Freeview?
Greater access to all the BBC’s TV services for Licence Fee payers. . .
. . . with no need to pay an additional subscription
There were 15 million non-digital UK homes - many of whom weren’t attracted to digital TV
Protect investment BBC has made in DTT infrastructure
Why did BBC get involved with Freeview? The short answer would be self interest….
Indeed Freeview provided `Greater access to all the BBC’s TV services for Licence Fee payers. . .
. . . with no need to pay an additional subscription.
There were 15 million non-digital UK homes - many of whom weren’t attracted to digital TV
Protect investment BBC has made in DTT infrastructure.
Recognition that switchover to digital would only be reached if there was a strong DTT offer.

12. DTT in the UK
Digital Terrestrial Television (DTT) is digital TV through your standard TV aerial with an adapter
There are six multiplexes:
Mux 1
Mux A
Mux 2
Mux B
Mux C
Mux D
BBC
Includes
five & S4C
ITV/C4
SDN
Crown Castle
Formerly ITV Digital
Digital Terrestrial Television (DTT) is digital TV through your standard TV aerial with an adapter.
There are six multiplexes.
A multiplex is the frequency used to simultaneously carry multiple digital services
Mulitiplex (or mux) is an encoder that combines two or more inputs into a single output. In electronics, the multiplexer combines several electrical signals into a single signal. There are different types of multiplexers for analog and digital circuits.

13. Solving DTT’s technical problems
Two things have been done to improve reception
Power increases
Mode change
Channel order / EPG improved
Improvements have led to:
9% increase in UK coverage (from 66% to 75%)
Significantly more robust reception
Multiplexes B, C & D were put back on air
Two things have been done to improve reception
Power increases
Mode change
Channel order / EPG improved
Improvements have led to:
9% increase in UK coverage (from 66% to 75%)
Significantly more robust reception

14. Freeview coverage Needs a new aerial Can get a signal
Freeview could not be universally available as it could reach only 75% of the population. For universality in the digital age satellite and cable would also play a key role.
Can get a signal

15. Freeview – The Offer

16. What is Freeview? Line-up of over 30 channels
One-off purchase of TV adapter (or iDTV)
Compatible with existing TVs
Simple to install
The new simple way of getting 30 channels through
your existing TV for a one-off payment - no contract
We sold Freeview as the new simple way of receiving 30 channels through your existing TV for a one off payment – no contract.

17. One of the major reasons for adopting Freeview was the availability of the BBC’s six digital only channels.
A pre-condition for the launch of new BBC Digital Services in 2001 was that the BBC would promote switchover to digital.

18. Positioning Freeview Pay TV Free TV Less choice More choice
What is clear is that the fundamental driver for buying digital TV or radio is through offering great digital programmes and services – why else would anyone bother to change?
The BBC now has 8 TV channels – 6 of them digital only – and 6 new digital radio services – and all are performing well.
In fact there’s clear evidence that the portfolio of BBC branded channels and services are encouraging people to take-up digital television, radio and online. In the case of Freeview, over 60% mentioned getting extra BBC channels as a reason for purchase. (Survey 2004).
Evidence has also shown that the BBC’s performance in Freeview homes is significantly better than in cable or satellite homes.

19. Freeview – Moving Forward

20. Freeview performance
Freeview is in 6.5 million homes with total sales of 10.5 million- about 70% of sales are for 1st sets.
Digital penetration in the UK has now reached 70%
Average Price paid for a Freeview box is around €60.
New TV adapter models being developed – with twin tuners, DVD player and hard drive storage
Average Price paid for a Freeview box is around €60. The price has halved since mid 2003.
The success of Freeview has not only due to the BBC – but also the key stakeholders. The UK government, the regulators, the commercial PSB , retailers, manufacturers and the transmission companies.

21. Free-viewers
“Free-viewers” are the digital rejectors - new digital viewers, not churners
Older and more up-market viewers than other platforms.
Viewing habits similar to terrestrial – “more, normal, television”
Just a background who are the Freeviewers:
“Free-viewers” are the digital rejectors - new digital viewers, not churners
Older and more up-market viewers than other platforms.
Viewing habits similar to terrestrial – “more, normal, television”

22. Reasons for Freeview’s Success
Created a new market category
Simple consumer focused proposition – “bigger, better normal TV”
Broke the concept that digital TV = Pay TV
Effective consumer and retail marketing
Product diversity – STBs and IDTVs
One of the key concepts Freeview broke was that digital TV = pay TV.

23. DTT is the 2nd largest digital TV platform
DTT is the 2nd largest digital TV platform
October 02
Dec 2005
Satellite
6.3m
8.3m
Cable
2.0m
2.7m
DTT
1.0m
6.5m
Total Digital
9.3m
17.5m
Digital Homes
38%
70%
According to the communications industry regulator OFCOM, the UK has the highest digital penetration of any country in the world.
Digital penetration has reached 70%.
More than 10.5 million Freeview boxes and integrated digital TV’s had been sold by the end of Some of these have been sold to households with more than one TV.

24. Planning for digital switch-over
UK plans to switch off the analogue signal in 2012.
Most of the 1,100 transmitter sites will be converted to digital to “substantially replicate” analogue coverage
Switchover will be a rolling, region-by-region process. Within each region analogue channels will probably be withdrawn over a period of months
A PSB-led company “SwitchCo” has been established to manage the switchover process
Before I finish, I would like to inform you about the UK plans for digital switchover.
The UK plans to switch off the analogue signal in 2012.
Most of the 1,100 transmitter sites will be converted to digital to “substantially replicate” analogue coverage
Switchover will be a rolling, region-by-region process. Within each region analogue channels will probably be withdrawn over a period of months
A PSB-led company “SwitchCo” has been established to manage the switchover process

25. BBC’s role in switchover
The BBC is not responsible for switchover…
bit it is critical for its success
Four key roles:
Spectrum planning, technical advice and expertise
Procuring transmission contracts ready for switchover
Founding and lead partner in SwitchCo
Funding digital marketing and communications
White Paper – BBC to take a lead role in the switchover to digital.
Lessons to be learnt from the UK
Each country’s journey to the digital age will be different – due to the development of the TV market, the role of PSB and in general economic development.
I hope I have informed you regarding the UK’s journey over the last few minutes and I would like to take this opportunity to wish Bosnia Herzegovina every success in its journey to digital switchover.

26. Digital Terrestrial Television in the UK Khalid Hadadi BBC EU and International Policy
Thank you very much for listening – I would be happy to answer your questions.