01 May 2008

Germany. A very big, sophisticated TV market. And competitive? You bet. But when it comes to digital TV? Well, let's just say that Germany is a work in progress.

Of analogue satellite TV homes in Europe, more than half are in German-speaking countries. Years after most European countries completely digitised DTH signals, Germany still transmits more than 40 channels in analogue, according to the recent satellite monitor compiled by SES Astra. And cable in Germany is still 80% analogue. Of 37m TV homes, fewer than nine million are digital. When you ask analysts when digital switchover is going to happen in Germany, there is a collective shaking of heads.

In fact there are pockets of progress: Berlin-Brandenberg was the first major metropolis in the world to complete (terrestrial) DSO in 2003. But since then, Germany as a whole has lagged. The reasons include the fragmented market and the politicised regional regulation structure. There may be progress on DSO in certain areas but there is a long way to go.

There is no DSO date set in Germany (other than the 2012 date set by the EU). But other countries - notably the UK - are marching ahead, with varying dates as the DSO deadline. One of the major drivers for digital uptake could be HDTV, but when it comes to HDTV and switchover, this is where things gets complicated.

In the UK, the BBC team in charge of putting content together from the upcoming Beijing Olympics for TV, online and mobile, say that this summer is a dress rehearsal for 2012 and that HD is a big part of the plan. It's a pretty major dress rehearsal - the BBC will show a third more hours of sports across different platforms than it did for the Athens Olympics. The Beijing games also will be the first to be shown in HD in the UK, with about 300 HD hours planned for broadcast on the BBC's digital satellite channels.

However, the HD part of the DSO strategy in the UK may end up limiting the appeal of DTT in the longer term, particularly for those who think that HD will be expected by consumers regardless of delivery platform. In April regulator Ofcom announced the results of a consultation on how DTT capacity for HD will be allocated to the terrestrial broadcasters. Counter to the advice of an expert group allied to the Digital Television Group, an industry trade body, Ofcom decided to reshuffle the existing DTT multiplexes to make way for HD broadcasts. The new transmission model will be based on MPEG-4 compression and DVB-T2 transmission. Viewers in some parts of the UK should be receiving HDTV signals later in 2009, expanding to the rest of the UK as analogue TV is switched off on a region-by-region basis. Ofcom predicts that by 2012, all four planned HD DTT channels will be available across the country.

But four HD channels? That seems paltry compared to the 17 that BSkyB is already operating on its DTH platform. Today Sky HD is showing over 7,000 hours-worth of HD content a month at a cost of £10 (€12.50) a month.

SES Astra predicts that by 2010 there will be 160 HDTV channels across Europe both on Astra-owned and other satellites. Exactly how the free-to-air HD satellite market shapes up as we approach DSO depends on which country you are looking at. Certainly the delay of a free satellite package to rival Sky in the UK shows the difficulties encountered by free-to-air broadcasters trying to work together.

But the big problem, it seems to me, is Ofcom's creation of an HD divide between satellite and DTT. The expert group led by Dr Ian Childs advised Ofcom to adopt a nationwide single-frequency network approach for DTT transmission. It predicted that this would create space for 20 HDTV channels on DTT, and up to 40 in the longer term. That sounds more like a real competitor to what satellite - and eventually cable - will offer.

The fourth quarter of last year saw the best take-up rate ever for Freeview equipment in the UK, with some 3.8m devices being sold, according to retail research organisation GfK. Now that Freeview is available in more than half of UK homes it seems a shame to cripple the future of the platform by limiting the number of HD channels to four. Ofcom's decision on how to reshuffle the multiplexes still must get government approval before they are set in stone but don't hold your breath for a change of thinking.

Back in Germany, HD has had limited impact on DSO. Pay-TV outfit Premiere has a couple of channels (and limited penetration). ProSiebenSat.1 actually turned its HD channels off earlier this year (albeit temporarily).

The EU's media and information society commissioner Viviane Reding may have her work cut out in Germany as she tries to get DSO to happen Europe-wide. But it seems like an equally important task to make sure that the HD have-nots do not outnumber the HD haves, longer term. And that maybe is something that Reding should be looking at right now.