CANOLFAN MATERION CYFREITHIOL CYMREIG: YR 8FED DDARLITH FLYNYDDOL Jason Chess, Partner, Wiggin LLP

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CANOLFAN MATERION CYFREITHIOL CYMREIG: YR 8FED DDARLITH

FLYNYDDOL

Jason Chess, Partner, Wiggin LLP


Tonight

A. THE ESSENTIAL BACKGROUND: DIGITISATION and CONVERGENCE – the transformation of the media industry

B. BROADCASTING IN WALES – Current provision

C. THE FUTURE – Will the cataclysm of change in the media allow Wales to retain a media personality in either language?


• Born Porthcawl, educated Porthcawl Comprehensive School and

University College, Oxford

• Read English (MA 1986) and Mediaeval Languages (MPhil, 1990)

• Specialised in the religious verse of the Gogynfeirdd and the

palaeography and transmission of Celtic manuscripts to Saxon Wessex.

• Partner at No. 1 specialist media law firm Wiggin LLP. Advise a range

of media clients including ITV, Channel 4, Five, BT, S4C, Granada,

Virgin Media, UKTV, Discovery, Al Jazeera (Arabic and English), HBO,

Setanta, Emap Plc, Conde Nast, Hearst Corp.

• Recent work = BBC/ITV/C4 Public Service VOD JV announced this week.

• Negotiated and established Astra 2A digital satellite transmission chain

for S4C in 1998

Who Am I?


Come on the journey…

Lle’r ei di Twn Pen CeunantLle’r ei di ar draws y bydA’r Sioned bron a holltiA’i hwyliau’n garpiau gyd?

Yn ol i’r FelinheliRwy’n mynd co bach, ho,ho,Ym morio am fy mywydSaith mis o Callao…

Where go you, Twn Pen Ceunant

Where go you across the seasAnd the Sioned almost brokenSails ragged in the breeze?

Back to FelinheliI’m going, my lad, ho, hoSailing like a maniacSeven months from Callao

Ynys yr Hud, (W.J. Gruffydd); Euryn Ogwen Williams: “Byw ynghanol chwyldro”, Darlith Cymru Heddiw, Eisteddfod Genedlaethol Bro Ogwr, 1998


Part One: What is “the Media” and why is it changing at present??


AnalogueTerrestrialTelevision

1982: Analogue Television Broadcasting

• BBC 1• BBC2• ITV• Channel 4/S4C

Television


Analogue Terrestrial Television

BT DistributionNetwork

1154 TransmitterSites

Production

What is ATT?

•Broadcast from 1154 sites UK Wide• 211 sites in Wales – Moel-y-Parc, Wenvoe

•4 or 5 television services with ‘universal coverage’

•Wasteful of capacity•Only able to broadcast a small number of national channels

•DSO process to be completed in 2012


Analogue SatelliteTelevision

AnalogueTerrestrialTelevision

Television

Broadcasting Platforms 1990

AnalogueCableTelevision


Cable TelevisionEnc1

Enc2 MUX

Local Node(HFC)

What is Cable Television?

•2 UK operators – ntl and Telewest – now merged into Virgin Media

•Limited geographic availability•Virgin – Cardiff and Swansea•A closed network requiring subscription•Provides digital video and audio•Provides NVOD / VOD, internet access & telephony

•Every television requires an STB•Requires installation of a coax feed to the home

ATM Distribution Network

ATM Distribution Network

Cable link to the home

Content “on-demand” servers

Real Time TV services QAMModulator



Direct to Home Satellite Television

What is Direct to HomeSatellite Television?

•Sky platform dominant in the UK•Provides access to 600+ channels: slots on the electronic programme guide (“EPG”) have just run out

•Provides NVOD services (“near video on demand”)

•Provides PPV services (“pay-per-view”)•Provides interactive services via Open TV and WML

•Provides PVR functionality via Sky+•Requires a set-top-box•ITV and BBC to launch a ‘Freesat’ alternative service

Services uplinked to Satellites

Services downlinked viareceive satellite dish

and fed in to STB

Enc1

Enc2 MUX

Content “on demand” servers

QPSKModulator

Real Time TV services



Television

1998: Digitisation and Digital Broadcasting

“Terrestrial Television”

Analogue andDigital:

Cable TV:Analogue and Digital

Digital Satellite


Digital Terrestrial Television

Enc1

Enc2

Enc3

MUX

Enc1

Enc2 MUX

Regional (RPOC) and National (NPOC) Multiplexing Systems

BT DistributionNetwork

80 TransmitterSites


What is DTT?

•6 Multiplexes of 24.1Mbit/s•Up to 10 services in a multiplex•High quality video and audio•‘interactivity’ via MHEG-5•NB no return path•Mix of free-to-air services and Pay-tv

•Currently limited core coverage from 80 transmitter sites UK Wide

•9 sites - Wales•Reception can be patchy•At DSO, core coverage of PSB multiplexes expected to reach 98%

•Further capacity possible, subject to Ofcom and RRC06

COFDMModulator


Analogue…Digital


Satellite

Terrestrial(Analogue & Digital)

Content Distribution Platforms 2002

DSL (IPTV)

Cable


DSL (IPTV)

What is IPTV?

•Direct to consumer service, offering:•Broadcast television•Video on demand•Deliver over a closed IP network•Offering a high QOS•Fixed wire delivery, currently DSL in the UK (Homechoice in London and Kingston in Hull)•“Soft Launch” of BT Vision

‘Internet’(Usually dedicated ATM circuits)

‘Internet’(Usually dedicated ATM circuits)

Local Loop(twisted pair) to the home

Local BT exchange(DSLAM)

Real Time TV Services

Enc1

Enc2 MUX

Content “on demand” servers

IP Encapsulator


CATV

DSL(IPTV)

Satellite

Terrestrial

Television

PC

MobilePhones (3G)

Content Distribution Platforms 2004

Mobile Phone(3G)


Mobile Telephony (3G)

3G Distribution Network

3G Distribution Network

What is Mobile Telephony (3G)?

•Direct to consumer service carried in-band over 3G mobile telephone networks, offering:•Recorded video-clips•Could provide ‘mobisodes’•Video messaging between handsets•Content can be FTV or pay-tv

3G cellular transceiver network

3G handset

ContentServer

MPEG4 Encoded Content


Mobile Telephony(3G)

DSL (IPTV)

Satellite

Terrestrial

Internet

TV

PC

Mobile Phone (3G)

MediaPlayers

2007: The Modern Media

Mobile TV devices (DVB-H and T-DMB)

Mobile Television(DVB-Hand T-DMB)

Cable


Internet

WMServer

Windows Media Player Client

Live Content

Windows Media Encoded Content

Real Time Encoder

StreamingServer

InternetInternet

ISP Connection

What is Internet Delivery?

•Delivery of content encoded using e.g. Windows Media or Real Networks.

•Usually Unicasting•TCP/IP based delivery•Viewed on a PC with a client application

•Can be accessed from various terminals and various connectivity (e.g. PC, handheld, 3G mobile phones)


Mobile Television (DVB-H)

Distribution Network

Distribution Network

What is DVB-H?

•Delivery of live television programming to mobile devices via DVB-H transmissions•Cellular transmission network likely•Single Frequency Network topography likely•Frequency availability and licensing framework not yet decided.•Capacity subject to post-DSO frequency plan and RRC06 decisions.•Ability to receive high quality digital pictures and sound•Whilst on the move (cell roaming)•O2, Nokia & Arqiva trialled a DVB-H network in Oxford.

DVB-H Transmitter Network

DVB-H Equipped receiver

Enc1

Enc2

Enc3

MUX


DVB-HModulator


The Media Platforms: How do they sell content and how can

users access content?

Modern Media Platforms : How do they work?


Analogue TerrestrialTelevision

TV

Analogue Terrestrial Television Business Model : 1982

“Free to Air”

or “FTA”


AnalogueCable TV

AnalogueSatelliteTV

AnalogueTelevision

TV

Free to Air

Basic Pay-TV

Packages

Premium Packages (Sports, Films/ Adult)

Broadcasting Platforms Business Models: 1990


Digital Satellite

Analogue andDigital CableTV

TV

Free to Air

Basic Packages and Themed Packages (“music” package; “family” package)Premium Packages

(Sport/Films/Adult)

“Pay-Per-View” or PPV

Digital and AnalogueTerrestrial Television

Broadcasting Platforms Business Models: 1998


Cable

DSL(IPTV)

Satellite

Digital andAnalogueTerrestrial

TV

PC

Mobile Phone (3G)

Free to Air

Basic and Themed Packages

Premium Packages (sport, films)

Pay-Per-View

Pay-Per-Day/Week/Month

Broadcasting Platforms: Business Models 2002


TV

PC

Mobile Phone (3G)

Free to Air

Basic and themed Pay-Packages

Premium Pay-Packages (Film, Sport)

Pay-Per-View

Pay-Per Day/Week/Month

Video-On-Demand

Mobile Receiver

Media Business Models 2007 onwards

Mobile TV receivingdevice (DVB-H)

Mobile Phone(3G)

Cable

DSL (IPTV)

Satellite

Terrestrial

Internet

Mobile TV(DVB-H & T-DMB)

DVB-H & T-DMB


What More?

• BBC iMP• BBC Local• ITV Local• Sky & Easynet / Sky

VOD• Sky HD• BBC HD• PVRs• iTunes• Google Video

• BT Vision

• Virgin & Nokia DVB – H

• MobiTV

• Vodafone/Sky/

Orange/3


For example….


Mobile – 3G handsets

Nokia 6630

Sony EricssonV600i

Apple iphone(2.5G)



• Improved picture quality• Sky and BBC HD plans• BBC, ITV, C4 & Five MOU• Al Jazeera English language service

acquired global 15 mb p/s satellite feed

• HD simulcast of S4C?

High Definition



Portable Devices

Sony’s Play Station Portable (Sony PSP)

Microsoft Mobile Media CentersSamsung a Creative

PVR2G0 Pace


PVR

Allows preferred content to be Identified and recorded


BBCiPlayer


"Our ambition is not to become a major production company. Our ambition is to be a major distribution company, a major platform,"

Terry SemelYahoo!


Wales…


“The challenge will be to innovate and compete, with relatively limited

resources……”

E.B. Hughes

The S4C Authority seeks to rise to the challenge of the beginning of this new digital era. This is truly a crossroads….

(Yr Athro Elan Closs Stephens)

Welsh Broadcasting: Where are we on the journey?


Why do we need “public” television anyway? • There are 400 channels on Sky…something for

everyone…why interfere…why tax?• There are several pressing reasons why society

needs to control the media

different viewpoints reflect and encourage democracy and tolerance

PLURALITY

increase our understanding of our society and the world including arts, science, history

INFORMATION

to reflect and strengthen our British and regional – Welsh, Irish, Scottish identity

CULTURE


ROYAL CHARTER & DCMS Agreeme

nt

BROADCASTING

ACTS

S4C2

ContentSupply

UK Channel 3

Franchises

Five

BROADCASTING

ACTS

FIVE

BROADCASTING

ACTS

Wales

Commercial company

Channel 4

4

Wales programming

obligations

Don’t care about Wales


Wales: Status Quo

BBC WALES

“Wholly or primarily in Welsh”

C4

FIVE

S4C

HTV

C4

FIVE

S4C2

English LanguageWelsh – orientated

content

Regional Programming

obligations

Independent

Producers

Content

supply

Daytime

analogue

content

Content

supply


Wales: Finance Models

LICENCE

FEE

DIRECT

DCMS

GRANT

£90m?

AD

SALES

£4m?

Advertising/

Sponsorship/

interactive revenues


Ed Richards, OFCOM

•High quality

•Innovative

•Challenging

•Original

•Widely available

•Diverse

in sufficient quantity?

PSB

Programmes




Devolution & Broadcasting Commission in Scotland

“Broadcasting has a crucial and central role in our democracy, but also in

obtaining the full cultural and economic benefits of our creative

industries”

Alex Salmond8th August 2007


Chris Bryant, MP

S4C & BBC

Not enough

spectrum for BBC2 content

S4C BUDGET

Should remain bilingual for the “whole of

Wales”

Sporting fixtures should have English

AND Welsh commentary

Devolved to Assembly in Cardiff…along with

rest of Welsh language policy

•News = 5.5 hours per week –287 hours p.a

•Current Affairs = 47 minutes per week – 41 hours p.a

•Other Regional = 13 minutes per week – 167 hours p.a

Retain as a

MINIMUM


ANALOGUE SWITCH

OFF

Wales…pressure points and challenges

threat to viewer

numbers if C4 content declines

loss of C4 analogue content to S4C

political attacks:

Somalis in Cardiff more

important

BBC CUTSloss of

regional focus?

Financial pressures:

Quality and diversity under pressure

salami

slicing?

ITVloss of

regional focus?

Need to compete against all Sky and Freeview channels without analogue

audience

Regional content

uneconomic

WELSH

VIEWERS

Welsh/regional

content needs to compete harder for audience

share

Keen consumers of digital TV…not

necessarily “loyal” to Welsh or even regional

English output

Need for more

investment in content;

better content very

popular


S4C

OPTION 1 (Status Quo

& BBC linkup)

Pretty well achieved

NO: Corrodes plurality, focus and associated

benefits

- “publisher” already

- nourishes TV production

- multi-platform

- new BBC relationship: £72m p.a

- new brand

- new demographics

OPTION 2 (amalgamate with BBC)

OPTION 3 (PSP)


-English C4 available to everyone in Wales-S4C will lose C4 English–speaking viewers

-S4C funding has fallen behind broadcast industry costs-S4C will lose commercial income

- IMP- ITV local- BBC local-Ofcom’s Local TV Proposals

all year-round pattern of broadcasting,

coupled with events and landmark programming

- consolidate peak hours upturn

- consolidate approval of Welsh

speakers- strengthen symbiosis with larger, consolidated indies

- act as tendering agency to head off PSP issue

inflexibility

• Disappearance of analogue channel

• funding

• Challenge of local TV

• Programming

• Communications Act 2003

S4C: Challenges


DSAT

DTT

CATV

IPTV

DSL

3G

DVB-H

• main “flagship” multichannel television package

• Interactive ancillary services

• Retransmission of DSAT feeds

• Retransmission of DSAT feeds

• opportunity for content reversion for broadband ADSL as well as linear transmission

• “S4C Broadband”

• opportunity for reversioned online content: “S4C Broadband”

• Internet presence: not expensive

•“S4C mobile” service: reversioned news, snippets, music, gossip, sport

• proper “TV to Mobile” opportunity for S4C brand = the longer term

Linear content&

interactivity

Linear content&

interactivity

Linear content & possible future

interactivity

BroadbandNon-linear

Broadbandnon-linear

Limitationsquestions re churn

T-DMB • Proper “TV to Mobile” opportunity for S4C = the short term

S4C2

S4CD S4C

S4C2

multichannelstrategy

We believe that a mixed approach, combining linear television and digital media, is essential…”


Sianel Blant S4C

S4C Multichannel

“It was put to us forcibly, that if the young watch mainly English language programmes, the decline of the Welsh language will continue…”

(the Crawford Committee Report into Welsh Language Broadcasting, 1974)


S4C DTT challenges• 1996 Act gifted S4C half a digital multiplex…approx 4/5 channels’

worth

• 2002 – after collapse of ITV digital, Mux B was awarded to BBC Free to View Limited: BBC services have universal carriage requirement…trumped Mux A as a PSB mux

• S4C & Five claim to be third “universal” Mux was undermined & diminished value to S4C as universal PSB

• S4CD to be transmitted on Mux 2 with TG4 & Gaelic service: fine, universal coverage for the main feed, but…

• What about universal coverage of S4C2? Only 8-10 transmitter sites perhaps 70/80% coverage as opposed to 211 sites for S4CD

• Potential childrens’ channel limited to 70/80%…Welsh Assembly limited to 70/80% coverage?

• OFCOM consultation….S4CD to be universal in Wales but query S4C multichannel strategy with only 70/80% coverage…?

• Platform neutrality issues

• Effective reduction in S4C digital settlement


Wales…Conclusions

Universal coverage multichannel platform in Wales + regular review of corporate governance/best practice

Welsh interests to be protected by robust corporate governance

Regional obligations to remain post ASO/DSO


Jason ChessPartner

Wiggin LLP

[email protected]

01242-63122607785-111439

Documents

CANOLFAN MATERION CYFREITHIOL CYMREIG: YR 8FED DDARLITH FLYNYDDOL Jason Chess, Partner, Wiggin LLP