DIGITAL TELEVISION: WHAT, WHY AND HOW?
by Pertti Näränen http://www.tamk.fi/~narper/

The main perspectives to discuss media or any given medium are technology, economy, and culture, the latter including social and aesthetic consideration. In what follows, I discuss digital television from all these perspectives, but not clearly separating different perspectives under different subtitles because, in practise, the technological, economical and cultural features of digital television are intertwined and have a certain input to one another.

In this article I start with technical and economic promises of digital television (DTV), continue with a short history of DTV from the European perspective, then move on to an overview of competition situation and economic problems in the early development. Finally, I'll focus more precisely on the development in Finland. The acronyms and abbreviations used are explained in a separate appendix.

Digital promises

The term digital television does not principally refer to digital audiovisual production technology or digital television sets but rather to digital signal delivery of audiovisual programmes and services in various channels and platforms.

DTV promises different options and benefits to different stakeholders. In the European media policy context, the main motivation for using digital transmission technology is the fact that digital coding and compression use the frequency spectrum more efficiently than the analogue signal modulation technology. This is especially tempting for terrestrial broadcasting, because terrestrial radio wave spectrum has long been a scarce resource. Satellite transmission is not as bandwidth-constrained than terrestrial or cable broadcasting but enhanced picture quality and new commercial interactive services like game channels and online shopping channels are of more interest there.

More efficient use of the frequency spectrum provides two different benefits. Firstly, increased channel space can be used by broadcasters for new programmes, interactive services or improvements in technical quality of the picture and sound. Secondly, especially after analogue switch-off, some UHF frequencies below 1 GHz, currently reserved for television broadcasting, could be reallocated to be used for new mobile services – UMTS and other 'third generation' wireless services and digital television broadcasting (datacasting) for hand held mobile receivers (Serafini, 2001; Grünwald, 2001; Aaltonen 2003).

The first promise, new channel space for broadcasters, is already being fulfilled. The number of television channels in Europe has doubled every three years between 1985 and 2000. Digital transmission is still increasing the figures. There were 47 channels available in Europe in 1989 and more than 1500 by 2002, over 600 of which are digital. (Papathanassopoulos 2002, 31; BIPE Consulting 2002, 5.) However, while most of these new channels are bundled into different satellite platforms and pay-TV access, the choice offered to any given consumer is not as high as the pure figures may imply. Improvements in picture quality from digital transmissions are still only minimal, since spectrum-hungry High Definition television (HDTV) is not yet transmitted anywhere in Europe. The development of interactive services is slower than anticipated due to technical problems, different standards and slow consumer demand, but it still remains an essential part of European DTV policy (European Commission, 2003).

It is worth noting that increase in the number of channels also creates new problems. It increases the costs of broadcasting when more companies compete to acquire the most popular content as mainstream cinema and sport broadcasting rights to their channels. At the same time fragmentation of audiences decreases the advertising incomes per channel – at least in free-to-air programming. If each program has to be produced cheaper than before, it is bound to lead the European broadcasters to decrease their own quality programme production and increase the import of cheapest possible programmes.

Because American series have already creamed their vast domestic market before they are resold to Europe, they can be sold here much cheaper than the European programs. Thus more television in Europe is likely to mean more American content (Corcoran 1999, 84; Doyle 2002, 87-89; Papathanassopoulos 2002, 15-25). European trade deficit in TV rights with the USA is increasing: it was about 4.1 billion € in 2000 which was 17.5% more than a year before (European Commission 2002, 5). This economic dependency on US television content has its cultural implications too.

Fulfilment of the second promise, new frequencies for mobile industry, is questionable. The need of mobile industry for new frequencies is not as great as previously anticipated. At its May 2000 conference in Istanbul, the International Telecommunication Union reserved new frequencies for European third generation mobile networks in the 2520-2670 MHz band, which is technically more suitable for UMTS than the television frequencies of today. This new space will satisfy the spectrum needs of mobile operators for some years. It is also now evident that the UMTS spectrum requirements calculated in the late 1990s were grossly overestimated (BIPE Consulting 2002, 89). Thus we may say, that the overheated market expectations for the mobile industry increased the rush to introduce DTV.

All in all, DTV represents an opportunity to encourage competition and growth both in the broadcasting and mobile industry. In the European Union media policy this pro-competitive industrial orientation has long prevailed over cultural policy (Näränen 2003; cf. Liikanen 2003).

Terrestrial, cable and satellite – or broadband television

The main forms of television delivery have been terrestrial, satellite and cable television. The most traditional form is terrestrial free-to-air (FTA) broadcasting which can be received with regular rooftop antenna. Also terrestrial microwave distribution has been used e.g. in Ireland, Switzerland and in the USA is some remote communities, but it will remain marginal.

Cable delivery was originally developed to be used in communities where geographical formations make the terrestrial radio signal weak or vulnerable to changing weather conditions. Signal received with a communal antenna was delivered further by a local cable company.

In the early 70's the cable television started to develop into new directions when Home Box Office (HBO) company launched its cinema and sport channels in major US cities using first terrestrial microwave towers and then satellites to deliver programmes to redistribution via local cable networks. The paying customers received new mainstream films and other premium content against a monthly payment. This started the era of pay-TV. Ever since the major cable television corporations have lived in symbiosis with international satellite channels: satellite channels can be reached with private direct-to-home (DTH) satellite dishes but most viewers access them with local cable delivery.

On the other hand, there is a connection between cable and terrestrial television too, because public authorities have laid down so called 'must carry rules' to ensure that cable television companies deliver also the channels of terrestrial public service broadcasters (PSBs). In some countries, as in the UK, also the satellite operators deliver PSB channels while e.g. in Finland that is not the case.

1980's the pay-TV satellite channels invaded the Europe too. This was made possible not only by new technology but also by a new political trend called 'deregulation', which introduced neo-liberal media policy and ended the era of public service monopoly television in most western European states, as well as in New Zealand and Australia. This radically changed the structures of television economy and supported the globalisation of television culture (Collins 1994; Wieten et al 2000; Näränen 2003). There are many who see the advent of DTV representing the second wave of deregulation (see e.g. Papathanassopoulos 2002, 31).

The development of the European standards for digital television transmission started in September 1993 in a Digital Video Broadcasting Group, initiated by German public broadcasters and leading European television manufacturers. The group started with the notion that the European union led project to develop analogue wide screen HDTV will never bear the fruit and that the fast development in digital technology must be regarded as a new starting point (Bulkey 2003).

DVB group soon succeeded to create the European DTV standard called Digital Video Broadcasting (DVB), first to the satellite platform (DVB-S) and by 1995 to terrestrial (DVB-T) and cable (DVB-C) broadcasting too. The USA and Japan created their own standards (ATSC and ISDB) approximately at the same time.

In addition to the traditional platforms, the television programmes have been delivered digitally in the Internet or in separate local networks. The Internet-telly can also be seen as a form of digital television, even if it still is not economically and technically feasible outside limited high speed networks in densely populated areas. Video datacasting to hand held devices (advanced mobile phones, PDA's) is also already in use in limited test areas but the economic models of the business are not ready yet. The future, with new digital signal compression standards and broadband home connections like ADSL, may develop the Internet-TV or mobile-TV as an option for global mass audiences too, but most probably not without new extensive fees for the consumers.

Satellite dominating – with multiple set-top box standards

Satellite has dominated the early DTV development all around the world, because of the wealthy companies, deregulated environment, and the fact that the satellite viewers have always been familiar with the set-top boxes and pay-TV.

Europe's first digital satellite (Astra 1E) was successfully placed into orbit in October 1995 by a commercial company controlled from Luxembourg. The pioneers in digital broadcasting were DStv (Telepiú) in Italy, Canal Satellite Numérique (Canal+) in France, and DF1 (Kirch Group) in Germany, soon followed by three other French players. Already by the end of 2001 the major European pay-TV satellite services were transmitting in digital format only. In late 2002 almost 20 % of the western European households already received digital television and over 70 % of them were connected to digital satellite.

Even if the pace of the development has been rapid in digital satellite broadcasting, there have been many problems along the way too. The major satellite operators wanted to create their own "middleware standards" (API and CA systems) needed for interactive services and pay-TV customer identification. Private standards embody the constant need for media oligopolies to control their audiences.

In practise this meant that even if broadcasters used same European digital transmission standard across Europe, audience access to those signals would be strictly limited to households equipped with the ‘right’ kind of set-top box receiver. Due to lack of common standard, STBs are not interoperable and interactive services must be tailored to suit different box models, which is expensive. (Papathanassopoulos 2002, 40-53; Näränen 2003.) No wonder the early DTV development has been marked by consumer confusion and a slow development of useful interactive applications.

Only the strongest media conglomerates seem to survive in the digital pay-TV business. Many pioneer companies in digital broadcasting have fled the arena in economic difficulties or bankruptcy. Approximately 150 European TV channels now operate at a loss (Forrester 2003). Rupert Murdoch's Sky Digital (BSkyS) in the UK is probably the single digital satellite operator in Europe making good profits – based on the way in which it has been able to monopolise its domestic pay-TV markets (Collins 2002).

Terrestrial broadcasting: case Finland

Terrestrial digital broadcasting started in the USA and UK November 1998, in Sweden April 1999, in Spain May 2000 and in Australia January 2001. Finland was sixth in a row in August 2001.

The UK is the only European state where terrestrial DTV is already well developed with approximately 2 million households, compared to 7 million digital satellite viewers. In many other European countries the development of digital terrestrial television is still in its infancy, but it is included in long term plans everywhere.

Finnish analogue television media consists of the public service channels TV1 and TV2 and the commercial channels MTV3 (acronym meaning 'Advertising television', not Music Television) and Nelonen (Channel Four). MTV3 is a corporation of Alma Media, which is partly owned by the major Swedish publishing house Bonnier. The fourth channel is owned by SanomaWSOY, the largest commercial media company in the Nordic countries. Nelonen has been operating at a loss since it started in 1997, but is getting more and more viewers. Almost half of the households in Finland have access to cable television and 11 per cent subscribe satellite services, but the use of pay-TV channels has remained exceptionally low maybe partly because of the language barrier.

The development of DTV started with governmental decisions in 1996. The government saw the digitisation of television as an important element in its 'information society' strategy and as a way to protect Finnish culture and domestic programme production from the invasion of foreign owned satellite broadcasters. Of the altogether 13 digital licences awarded in 1999 only two went to applicants other than the incumbent broadcasters, the rest were shared by Finnish Broadcasting Corporation YLE, Alma Media and Sanoma group (Brown 2003). Four channels were supposed to operate on pay-TV basis.

Finland was the first country in the world starting digital broadcasting using pan-European MHP standard for interactive applications instead of proprietary standards of satellite corporations. MHP is a good solution for the future because it is the only open, common standard capable for multiple advanced interactive services. MHP is now widely supported by the EU as a common standard but it has taken too long, however, for the Commission to formulate specific proposals to support the implementation of MHP in second generation STBs (European Commission 2003). Hardware manufacturers didn't move fast enough to provide MHP boxes to the small Finnish markets also because MHP requires more processor efficiency and Flash/RAM memory from the STB hardware than was hitherto needed (Flynn, 2001). Due to all this, by the time Finland started digital broadcasting, August 27th 2001, there were actually no digital receivers available on the market. The first boxes entered the stores in October and the MHP-boxes only a year later. This fact was lampooned in the press, leading to a damaged credibility of DTV in the eyes of the viewers.

Also the development of the content proved to be more difficult than anticipated. In 2002 it became clear that all the pay-TV channels refuse to start broadcasting, due to lacking pay-TV infrastructure and user interest. Two channels (youth channel SubTV and the Sports channel) transferred their operations also to the analogue cable delivery. The remaining three 'digital-only' channels were public service channels YLE 24, a news and current affairs service, YLE Teema, a channel for culture, education and science and FST-D, a full service channel for the Swedish-speaking minority (6 % of the Finnish population). In their first year YLE channels were mostly recycling their analogue content in the digital platform, but at least YLE was the only company who succeeded to keep its promises for the viewer.

However, the interest in digital television has been on rise since the late 2002, when the MHP boxes finally entered the market. There are now (Oct 2003) almost 130 000 cable and terrestial boxes, which means that appr. 6 % of the 2,2 million Finnish households can access national digital television. The amount of digital satellite boxes is estimated to 57 000. In 2004 new terrestrial channels are bound to enter the field (Canal+ pay-TV channel and a group of local city channels). YLE is just about to launch its new interactive digital teletext services and in MTV3 teletext pages new interactive commercial electronic services like banking, online shopping and interactive advertising are ready for launch.

The Future?

All things considered, the promise that DTV has best fulfilled so far has been the increase in the number of channels, first on satellite and then on cable and terrestrial platform. The quality of television has not improved similarly and the development of new services has been slow. The European Union has not succeeded well in protecting the consumer interest in the development, as the problems with common standard implementation illustrate. However, the concerns related to digital broadcasting – trade deficit, concentration of media ownership, poor economics and lack of interoperability – have increased since the late 1990's. The EU media policy now has seriously paid attention to these dilemmas too (European Commission 2003). This has summed up to at least slightly new European media policy approach in which 'pro-regulation' has in the turn of the century re-captured some ground from deregulation.

For the television viewers DTV promises greater variety of choice, but also new costs. Old television set is no more enough. New STB models will have more advanced features included, as card slots for pay-TV customer identification and online banking, a hard disk for programme recording and play back functions, Internet browser and broadband return channel instead of regular phone modem. Broadcasting to hand held devises may become possible. Most new services are not free anyhow.

New features in the receiving technology are also problematic for the broadcasters. With multiple kind of receivers it will be more and more difficult to build services that can be used in all the platforms and with all the receivers. Especially the traditional public service principle of "universal service" is challenged by technology.

There are no reasons to see digital television as a radically new networked media system. Even with a set top box and a return channel option DTV will for long remain just a television – an audiovisual mass medium, not very different from today. It will have some enhanced features and possibilities for alternative and secondary use, just like game consoles widened up the possibilities of television use in the past, but the ways in which television programmes are produced and viewed change relatively slowly.

Digital broadcasting is of little interest for those viewers, who are satisfied with the programmes and picture quality of analogue television and who have little money to invest in new receivers and new services. Is DTV only a rich man's television for the overdeveloped world? A serious ethical question is, how to justify this kind of abundance of media channels, services, applications and gadgets in a world where the majority of people are still lacking paper, pen and basic education.

More information in the Internet:

Finnish digital television forum www.digitv.fi/
European Digital Video Broadcasting Group www.dvb.org/
DVB-MHP Site www.mhp.org/
Digital Terrestrial Television Action Group www.digitag.org/
The Digital Television Group UK www.dtg.org.uk/
European Broadcasting Union www.ebu.ch
Federal Communications Commission (USA) www.fcc.gov/dtv
European Audiovisual Observatory www.obs.coe.int/
Freeview www.freeview.co.uk/
Broadbandbananas, ITV applications from the UK www.broadbandbananas.com/

References

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Brown, Allan (2003). Technology-driven Industry Restructure: The Case of Terrestial Television Broadcasting in Finland. Turku School of Economics and Business Administration. Series B: Research Reports, B1/2003.
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APPENDIX: The Acronyms and abbreviations used or relevant for the subject
ADSL - Asymmetric Digital Subscriber Line, a new technology that allows more data to
be sent over existing copper telephone lines.
API - Application Program Interface; In a set-top box (STB) API is a software which helps the programmers to write applications consistent with the operating environment. Together with CAS and EPG, API form the "middleware solutions" of interactive services. Only common API ensures interoperability of digital receivers so that one STB can receive programs and services from more than one platform.
ATSC - Advanced Television Systems Committee. Established the American standards
for digital television. Standard is using 8-VSB signal modulation, including digital high definition television (HDTV) but using the bandwidth less efficiently than the European DVB standard. See www.atsc.org
Broadband - Traditionally a network connection capable for delivering one digital video signal comparable to analogue VHS video quality. In prevailing MPEG-2 compression technology that means a connection with 2 Mbit/s undisturbed bandwidth, even if Internet Service Providers are sometimes inaccurately calling broadband even 256 kbit/s speeds.
CA - Conditional Access (System). A software which makes it possible for the pay-tv broadcaster to identify the paying customers.
COFDM - Coded Orthogonal Frequency Division Multiplexing; digital signal modultation capable to transmit many streams of digital data simultaneously, each occupying only a small portion of the total bandwidth.
Digital teletext - Enhanced digital version of the analogue text television service, including high definition pictures, multimedia and animation and clickable links. Used
for information services or advertising.
DTH - Direct To Home satellite television system, where household has a private satellite dish.
DTT - Digital Terrestrial Television which can be received with a basic rooftop antenna.
DTV - Digital television. Standard definition video quality uses 6 Mbit/s bandwidth in MPEG-2 coding.
DVB - Digital Video Broadcasting; European standard for digital television and adopted by e.g. Australia, New Zealand and India too. Different spesifications in terrestial (DVB-T), satellite (DVB-S) or cable (DVB-C) broadcasting. See www.dbv.org
DVR - Digital Video Recorder, see PVR.
EPG - Electronic Programme Guide. A channel selection and navigation software for digital television; used to find, select and record programs and services. EPG-functions can be connected to other interactive applications too, like additional information services, advertising or teleshopping.
FTA - Free to air television, terrestial television with no fees for the viewers except possibly an annual licence fee.
HDTV - High Definition TV. In digital TV using appr. 20 Mbit/s bandwidth with MPEG-2 coding.
idTV - integrated DTV where the STB and the monitor are attached
IRD - Integrated Receiver Decoder, see Set Top Box
ISDB - Integrated Service Digital Broadcasting. A Japanese DTV standard.
kbit/s - Kilobytes per second; an amount of thousand bytes (composed of 8 binary bits each) that a digital delivery line can transfer in one second.
MHP - Multimedia Home Platform. An DTV API standard for interactive services. See www.mhp.org
MPEG - Moving Pictures Expert Group; MPEG-2 is the prevailing standard for signal compression in digital broadcasting both in ATSC and DVB standards
PDA - Personal Digital Assistant, a handheld device that combines computing, phone/fax, Internet and networking features.
PSB - Public service broadcaster
PVR - Personal Video Recorder, same as Digital Video Recorder; a separate device for digital hard disk recording and storage of television programmes.
RAM - Random Access Memory. The place in a computer where the operating system, application programs, and data in current use are kept so that they can be quickly reached by the computer's processor.
STB - Set Top Box; receives the digital broadcasting signal and translates it understandable for analogue TV set; basically a computer which includes microprocessor, RAM memory, operating system, Conditional Access System (CAS), memory card reader and sometimes even a modem and a hard drive recorder (PVR). Also know as IRD.
UMTS - Universal Mobile Telecommunications Services. New mobile phone system using radio waves over 2 GHz frequency band to support fast data and multimedia services. See www.umts-forum.org/