Submission to the House of Lords Communications Committee inquiry into public service broadcasting in the age of video on demand
The Digital TV Group (DTG) welcomes this opportunity to submit its views to this timely inquiry. As a pan-industry body, we believe we can provide some valuable insights into what is needed to maintain a high-quality television viewing experience. The DTG acknowledges that the consumer electronics and streaming video markets are increasingly global. It believes that the UK, given the right regulatory and commercial frameworks, has an opportunity to lead international innovation and drive economic growth.
About the DTG
The DTG is the unique self-funding UK collaboration centre for innovation in digital television. It draws its membership from the digital television delivery chain from studios through to digital networks, broadcasters, platforms, manufacturers and consumer groups. It underpins the free-to-air platforms Freeview, Freesat and YouView, and supports the development of Sky, Virgin Media, BT, TalkTalk and global streaming services such as YouTube, Amazon and Netflix. It places the viewer at the centre of everything it does and as such, specifies every digital television in the UK market. The DTG operates the industry interoperability test centre which ensures a high quality and accessible viewer experience of products and services.
The DTG has been central to the distribution of TV in the UK for over two decades, through the collaborative development of industry standards and best practice. It is currently embracing the convergence of content and networks across industries to focus on the efficient delivery of video to all screens – mobile, tablet and TV – in all formats.
This submission has been written using feedback from the DTG’s membership but does not necessarily represent the views of all DTG member organisations. The DTG is made up of member companies who may also be submitting an individual response.
Responses to Questions
Question 1) What is the value of public service broadcasting? Is the concept becoming outdated? Does public service broadcasting do enough to reflect and serve the demographics of the UK?
Public Service Broadcasting (PSB) has long been at the heart of UK television. The PSB broadcasters are obliged to deliver a wide variety of high quality, predominately UK-produced programmes. Crucially, they must all be both universally available throughout the UK and free for consumers to access.
Throughout the more than six decades lifespan of the PSB system, consumers have enjoyed an ever-improving range of television services. Broadcast and consumer electronics technology has been consistently upgraded, thanks to enhancements at all stages of the supply chain. Since it was founded in 1995, the DTG has played a significant and sometimes leading role in inter alia the move from analogue to digital transmission, the development of the terrestrial, satellite and cable platforms, the introduction of HDTV and more recently UHD, the launch of internet-delivered on-demand services, the widespread adoption of flat-screen televisions and countless other enhancements in picture and audio quality and viewer empowerment. It has done this by providing an environment where all stakeholders can discuss and agree requirements, and by providing a testing and conformance regime developed and operated on behalf of all participants.
Every viewer’s experience of television has improved immeasurably, thanks in very large part to the consistent pursuit of technical quality and innovation. This has been underpinned by a healthy climate of competition – and by a recognition of the need for collaboration between industry players to agree standards and pursue legitimate joint working. The PSBs have been heavily involved in developing these collaborative efforts as part of their commitment to delivering high quality services to all viewers.
Audiences do not expect just a range of high-quality programmes from the PSBs and other broadcasters; they expect that wide choice of quality programming to be complemented by a high-quality viewing experience and a choice of television sets, platforms and services. They also expect to have services available on demand, so they can watch them whenever, wherever and on whatever device they choose.
The DTG believes that a healthy PSB system, alongside other linear broadcasters and new internet-based entrants, is clearly in the interests of viewer choice and enjoyment.
Question 2) What are the consequences of the rise of on-demand providers and the decline of linear television viewing for the production of original UK content for UK audiences?
The new entrants (primarily Netflix and Amazon Prime) have clearly proved popular and added to consumer choice, especially among younger viewers. Recent analysis suggests that between seven and nine per cent of the time spent watching television sets is taken up with viewing their services.
However, it would be wrong to write off traditional linear television or the PSB system. The experience of the last 30 years has been that, despite an explosion in viewer choice, the PSBs and other broadcasters have managed to adapt to new challenges. Additional linear channels on the satellite, cable and terrestrial platforms, plus a full panoply of long and short form video on the internet, have encouraged the PSBs to update their offers to audiences, for example through the launch of suites of secondary channels and of on-demand catch-up services (such as iPlayer) delivered using Internet Protocol (IP). Indeed, when the combination of PSBs’ broadcast and on-demand services is included, the percentage of viewers watching PSB services has remained stable over the last 3 years.
It is likely that viewers will settle for a mixed diet of SVOD services and traditional linear channels, especially as broadcasters adapt to this new challenge. Audiences already recognise that largely international SVOD services do not provide the full range of viewing experience they seek and much of which is provided by the PSBs. The PSBs invest far more in UK-based productions and in genres – such as news, regional news and current affairs – which are both socially important and enrich viewer choice. Any change to the current level of PSB content production would place the UK’s unique culture at risk.
But the increasing popularity of the SVODs could lead to questions about how sustainable it is to deliver large volumes of video content over the internet. At present it appears consumers are prepared to put up with a certain amount of inconvenience in terms of buffering, latency and start-up speed from on-demand services which they would not tolerate from the linear television ecosystem. The extent of such problems depends in part at least on the quality of broadband connections, distance from an exchange, time of day, volume of traffic, etc.
The DTG has set out the Principles Behind the Universal Delivery of Video Over IP in a draft Manifesto. As more content is delivered using IP, the DTG believes more attention needs to be paid to ensuring a more consistent and reliable viewing experience. This will involve agreeing standards over such issues as interoperability, accessibility and quality of service. As more and more of the television that viewers watch is delivered to them by IP, so it becomes more important to ensure the viewing experience is of a comparably high standard. For example, viewers have taken for granted that they can start watching a programme as soon as they switch on their television or switch channels; such experience ought to be replicated in the on-demand world.
Such considerations are also important as policy makers consider the extent to which linear channels might be delivered over the internet. Widespread delivery of internet-delivered television services will not be viable for many years, partly because of the technical challenges of delivering so much popular video content to so many people at the same time; and partly because of the legacy issue of a substantial minority of households not having a high enough standard (or any) broadband connection for some considerable time. Additionally, broadcasters have to pay the CDN costs for IP delivery with no clear end-to-end guarantee of quality; unlike one-to-many broadcast services, where there is a single cost irrespective of the number of viewers and quality is guaranteed.
Notwithstanding such issues, if there is to be a move over time towards an IP-based television environment, it will be important to replicate as much as possible the advantages of the current television ecosystem to guarantee a high-quality viewing experience.
In considering the future of public service broadcasting in the context of an increasingly internet-based future, two of the key PSB characteristics to which we referred in our last answer – that all PSB services must be both universally available throughout the UK and free for consumers to access – would need to be preserved. It is questionable how easy this would be to achieve without universal take-up of broadband and more robust networks.
In this, as in all its work, the DTG remains committed to facilitate the PSBs, the manufacturers, the platforms and other contributors to the supply chain working together to ensure maximum access to PSB services for benefit of all viewers. The DTG encourages policy makers to listen to industry’s views at the annual DTG Summit.
Question 3) What has been the effect of changes in the market on the UK television production sector more widely, including on training, job opportunities and the business models of independent producers?
PSB investment underpins the UK television production sector. Any reduction in this investment would have a negative impact on the level of training, number of job opportunities and the viability of independent producers. It would also reduce the viability of UK based broadcast and streaming media technology companies and facilities, reducing the UK’s global influence on the sector.
Question 4) Are the obligations on public service broadcasters appropriate? Does the regulatory regime allow them to do so?
The PSB system is based on a set of obligations and privileges. The obligations include requirements for services to be made universally available and free at the point of use; for them to provide a diverse range of high quality programming; for a large proportion of programmes to be UK-produced; for a proportion of programmes to be made in the nations and regions; and for regulated terms of trade to be offered to independent producers. As publicly owned corporations, both the BBC and Channel 4 (S4C in Wales) have further obligations that do not apply to the privately-owned PSBs (ITV, STV and Channel 5).
Such obligations have always been balanced by certain advantages, in particular privileged access to spectrum and prominence on electronic programme guides (EPGs).
But the value of these advantages is being eroded with the growth of the on-demand world, which does not rely on broadcast spectrum and at present contains no equivalent to guaranteed PSB prominence. Indeed, the applications used to deliver on-demand services naturally tend to favour content from the owners of such services.
Question 5) Have public service broadcasters responded adequately to market changes?
The PSBs have worked together with the rest of the TV industry to respond to market changes, not least through collaboration in the DTG. Such collaboration led to the successful UK-wide transition to digital transmissions; the introduction of HDTV services on the DTT platform; and the deployment of interactive television with the MHEG standard, more recently upgraded to HbbTV, which facilitated the launch of internet-enabled televisions.
In addition, the PSBs have broadened their programme offerings through additional linear channels and on-demand catch-up services; collaborated to launch the Freesat and YouView platforms; and through DUK have worked with manufacturers to provide a new standard for internet-enabled TVs in the form of Freeview Play. They have also catered for the increasingly mobile nature of television viewing through apps supported on all major phone and tablet platforms.
All of these initiatives have extended consumers’ choice and the quality of their viewing experience.
Question 6) How can commercial public service broadcasters fund original productions for UK audiences at a time of declining advertising revenues? How might public service funding regimes- including the BBC licence fee – be adjusted?
As we have indicated in our answer to Question 4, the balance between PSB privileges and obligations is already coming out of balance and this will need to be addressed in future policy decisions.
Question 7) How important is prominence for public service broadcasters? Can it be maintained in the face of rapid technological development and greater personalisation of content?
EPG prominence for the PSBs is a legislative and regulatory requirement. The main mechanism to ensure the universal delivery of PSB service prominence since the launch of digital television has been through the linear service logical channel numbers (LCNs) of 1:BBC1, 2:BBC2, 3:ITV/STV, 4:Channel 4 (S4C in Wales), and 5:Channel 5. The DTG works with its members to specify and ensure the universal and voluntary implementation of this system in UK television sets and set-top-boxes. The industry’s technical requirements for interoperability are set out in the DTG D-Book and tested using DTG Test Suites and at the DTG Test Centre. These common requirements are implemented in the broadcast system by PSBs and platform operators (e.g. Digital UK, YouView and Freesat). Platform (e.g. Freeview) trademark licences (TMLs) reference these requirements providing additional benefits to consumer electronics manufacturers that adopt these brands.
As we stated in answer to Question 4, EPG prominence is one of the advantages of PSB status. It is also of public benefit: there is little point placing obligations on the PSBs to deliver certain types of content for citizens’ benefit if the PSB services charged with those obligations cannot be readily accessed by those citizens. So the concept of prominence lies at the heart of the PSB compact.
There are no industry-developed requirements for prominence in the on-line and on-demand environment, and as such PSBs rely on a range of bilateral arrangements with television set, set top box and other device manufacturers and platform operators to achieve prominence. At the request of global consumer electronics manufacturers, the DTG is working with the PSBs and platforms to support the simplification and sustainability of this complex framework. However, this is not helped by the current regulatory vacuum. There are no existing regulations governing the on-line and on-demand environments that guarantee PSB prominence equivalent to that which exists in the linear world. This lacuna is being examined by Ofcom, although any change may well require legislation.
The DTG believes more can, and should be done, to ensure greater discoverability of PSB content and that it is critical this is developed quickly in consultation with DTG members
Question 8) Should there be new regulation of on-demand services? Does the revised Audio-visual Media Services Directive provide appropriate measures to ‘level the playing field’? How could on-demand services be encouraged to produce more content in the UK?
If the popularity of SVOD services continues to increase, policy makers may wish to consider whether the sort of obligations placed on the PSBs should be applied to these new entrants. Moreover, if SVOD services become more dominant and start providing gateways to other content, then regulation of such gatekeeper roles may need to be considered.
Question 9) What should the relationship be between public service broadcasters and on-demand platforms? What are the risks and opportunities of collaboration, for example in co-production?
The DTG is the manifestation of collaboration between the public service broadcasters, the pay TV platforms, the consumer electronics industry and the many other contributors to the television supply chain. Such collaboration – in the context of a competitive market – has been beneficial for the industry as a whole, as it has helped lay down ever improving standards and stimulate continuing expansion in quality. We hope and expect that in time on-demand service providers will play a positive role in developing new standards and technical innovation.
The DTG is not well placed to express a view on co-productions between the PSBs and the SVOD services.
Question 10) What are the implications of ‘Britbox’? Is there scope for more collaboration amongst public service broadcasters? What more could PSBs do to compete with on demand services?
The DTG views Britbox as the latest in a long line of collaborations between some or all of the PSBs; such collaborations have included Freeview, YouView, Freesat and Freeview Play. Although Britbox is primarily a content-based commercial proposition, the DTG would be happy to support its technical evolution.
Response originally published on data.parliament.uk
 For further information and our full membership, go to dtg.org.uk
 The PSB TV services are: all BBC channels, ITV (including STV), Channel 4 and Channel 5; and in Wales S4C.
 Enders Analysis, TV set viewing trends: linear audiences tumble in 2018, 7 February 2019 and The future of video viewing: forecasts to 2028, March 2019; BARB, Charting the growth of SVOD services in the UK, January 2019; and Thinkbox, TV Viewing Report 2018, 2 April 2019
 Ampere Consumer, The Ever Changing UK TV Market, February 2019. This study looked at just BBC, ITV and Channel 4 as representative of the PSBs.
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