1. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 1 ©Strategy & Technology, 2011 DTT Success Stories UK, Hong Kong and New Zealand Colin Prior Director of International Sales Strategy & Technology

2. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 2 ©Strategy & Technology, 2011 Agenda  Introduction to S&T  What makes a successful DTT market?  Successful markets:  Freeview HD UK  Hong Kong  Freeview│HD New Zealand  Key ingredients for success  Summary

3. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 3 ©Strategy & Technology, 2011 S&T Overview  Independent company  Offices in London & Bristol (UK), Denver (USA), Hong Kong (SAR)  Worked exclusively in digital TV since 1996  On council of UK DTG, leading MHEG-5 specification activity; previously on DVB Steering Board  Products provide a complete interactive TV solution:  Redkey TM MHEG-5 engines to receiver manufacturers  MHEG-5 applications to broadcasters and operators  Interactive playout equipment (Object Carousels)  Customers include Sky, Arqiva (UK), Freeview NZ, Kordia, Canwest, TVNZ (NZ), TVB (HK), Digicable (India), ABC, SBS, Seven, Nine, Ten, Win, Broadcast Australia, Prime, Southern Cross (Australia), RAI (Italy), Mediacorp (Singapore), RTM (Malaysia), Time Warner Cable, Comcast, Weather Channel, Videotron, Cisco, Rogers, NBC, Motorola (USA)  Also provide consulting services to broadcasters operators and regulators

4. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 4 ©Strategy & Technology, 2011 What makes a DTT market successful?  Viewer acceptance and adoption, driving receiver sales and enabling a timetable for analogue switch-off  DTT Brand recognition by viewers  Receiver availability with a competitive market of conformant product providing consumers with choice  Broadcaster success with innovative and compelling content – both video and interactive

5. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 5 ©Strategy & Technology, 2011 Viewer perceived benefits of Digital TV  Better picture quality  Widescreen (16:9)  Improved audio quality including Dolby 5.1 surround  High Definition  Wider choice of channels  Interactive services and programme guide  Closed captions / audio description  Digital video recorders (time-shift)

6. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 6 ©Strategy & Technology, 2011 UK - Freeview  DTT launched in UK in 1998 as a PayTV platform “OnDigital”, later “ITVDigital” using MHEG-2 compression with MHEG-5 middleware and Nagra CAS.  ITVDigital failed as a commercial venture in 2002, primarily due to high content costs and small number of subscribers.  A consortium lead by the BBC, Sky and Crown Castle (now Arqiva) took over the platform and renamed it ‘Freeview’.  The Freeview name is important as previously consumers had the perception that Digital TV = Pay TV.  Freeview describes exactly what the service is: Free to View television with no subscription fees  Now over 55m receivers sold and in 90% of UK households

7. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 7 ©Strategy & Technology, 2011 Freeview Channels

8. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 8 ©Strategy & Technology, 2011 Freeview fundamentals  Freeview acts as an umbrella organisation to market, coordinate and promote the Freeview brand and concept. It does not operate any channels or services.  Multiplexes and transmission network are operated by an independent company, Arqiva (not the broadcasters) to allow the transmission network to be optimised in terms of coverage and bandwidth utilisation.  All technical specifications (transmission and receivers) are developed and maintained by the Digital Television Group (DTG), an industry owned group that brings all stakeholders in the complete supply chain together. (Broadcasters, Operators, Manufacturers, Regulators and Retailers)  DTG Testing produces conformance tests and carries out receiver conformance testing for manufacturers  Digital UK provides the promotion and consumer support for Digital Switchover

9. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 9 ©Strategy & Technology, 2011 Freeview HD  March 2009: DTG publish D-Book 6  October 2009: Freeview HD conformance test suite  December 2009: Technical launch of Freeview HD:  3 HD channels go live in London and Manchester  March 2010: Consumer launch of Freeview HD products in retail stores  Digital switchover progressing region-by-region offering 4 HD services on one DVB-T2 multiplex (with 5 existing DVB-T multiplexes) – nationwide completion in 2012.

10. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 10 ©Strategy & Technology, 2011 >1.5m receiver sales to end Q1 2011 >150 DVB-T2 / MHEG-5 receiver models in the UK market including:

11. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 11 ©Strategy & Technology, 2011 BBC iPlayer – Hybrid “Catch-up TV” on Freeview HD

12. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 12 ©Strategy & Technology, 2011 Hong Kong  The two Free-to-Air broadcasters in Hong Kong, TVB and ATV jointly launched DTT in January 2008.  Additional licenses will be awarded in June 2011 for more services  Platform supports both SD and HD MPEG-2/4 H.264 AVC services using the DMB-T transmission standard (China)  Receiver conformance testing by DTV Labs in Hong Kong with conformance mark  Receiver sales now exceed 1.5m and DTT penetration is >60% of Hong Kong households

13. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 13 ©Strategy & Technology, 2011 Information / Stock Market (TVB Hong Kong)

14. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 14 ©Strategy & Technology, 2011 Freeview New Zealand  Freeview is a consortium of Free-to-Air broadcasters in New Zealand  Launched Freeview|HD on DVB-T in early 2008 supporting both SD and HD MPEG-4 H.264 AVC services  Also operate a DVB-S MPEG-2 SD Freeview platform to provide coverage to rural areas  HD services are not simulcast in SD. If an SD display is used then the receiver down-converts from HD to SD.  Receiver conformance testing by DTG Testing UK and DTV Labs in Hong Kong  Over 550,000 receivers sold with Freeview in approx 30% of NZ households

15. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 15 ©Strategy & Technology, 2011 Freeview New Zealand Channels

16. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 16 ©Strategy & Technology, 2011 Freeview NZ MHEG Platform EPG

17. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 17 ©Strategy & Technology, 2011 Key ingredients for success  Clear plan and objectives  All stakeholders work together  Clear technical specifications for receivers and broadcast including middleware  Receiver conformance and marking  Retail supply chain involvement  And of course, compelling content!

18. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 18 ©Strategy & Technology, 2011 Stakeholder Organisation  It is essential to bring together all the stakeholders in the digital TV market:  Broadcasters  Regulator / Government  Receiver manufacturers  Equipment suppliers  Retailers  Enable good communications and consistent message

19. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 19 ©Strategy & Technology, 2011 Why MHEG-5 Middleware?  MHEG-5 has been selected for theses DTT markets because it can be built into all receiver devices in a market at a very small incremental cost with:  Low receiver technology cost due to small footprint  No known IPR (= no license fees)  Competitive market in technology supply with a complete international supply chain already in place  Effective conformance test regime in place  MHEG middleware is now integrated into most integrated digital TVs which now dominate retail sales in Europe and Asia-Pacific

20. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 20 ©Strategy & Technology, 2011 Receiver Conformance Testing  An independent conformance test scheme is strongly recommended for digital TV markets  Verify the receiver implementation with the DTG Testing conformance test suite or equivalent  In horizontal markets involve the retailers in this process. (The customers will complain to them!) Have some form of branding to show consumers the product conforms to specifications:

21. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 21 ©Strategy & Technology, 2011 Summary and Conclusions  DTT is successful in many markets in Europe and Asia.  Common factors in their success include:  Clear objectives agreed by all stakeholders  Detailed technical specifications for receivers and transmission including middleware  Receiver conformance testing scheme to ensure interoperability  Retail supply chain involved in process  Adopting a proven specification based on established markets such as UK (DVB-T2 and MHEG-5) reduces risk and enables a rapid market launch as receiver products are already developed and readily available  DVB-T2 should now be specified for all new DTT platforms – receiver cost differences will soon be insignificant

22. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 22 ©Strategy & Technology, 2011 Thank you! Web sites: www.s-and-t.comwww.s-and-t.com Colin Prior Director of International Sales colin.prior@s-and-t.com