Lord McIntosh's Speech on Digital Television to the Westminster Media Forum
Happy to speak to the Westminster Media Forum.
Today I would like to talk about consumers and digital television.
We have made it clear from the start that the interests, needs and concerns of consumers are at the heart of the Digital Television Action Plan. We want to ensure that the benefits that digital television can bring are available to all people in the UK, to all ages and social backgrounds and that they want to make the change to digital.
I shall be announcing new measures to ensure consumers' interests are fully represented as we take the plan forward.
Benefits of Digital Television
Let's start with the benefits. As with analogue cable and satellite, Digital Television offers more channels.
But it also offers a wider range of benefits over multi-channel analogue television. Interactivity, better subtitling and the use of accompanying digital technologies such as the PVR, Personal Video Recorder.
Now, you might say that we do not need to switch off the analogue signals to get the benefits of digital TV. That it's a lot of unnecessary pain. But it's not true. There are benefits that we will not get if we don't turn off the analogue signals.
And, by benefits, I don't mean only more money for the Treasury from spectrum auctions, but the availability of the released spectrum for uses that will benefit all of us.
Moving from analogue to digital TV is a "win-win" situation in spectrum terms. You get "more for less."
More TV services can be put into less spectrum and this frees up valuable frequencies for even more TV services and other uses. The opportunity to work the spectrum even harder will provide a major boost to the economy and, hopefully, jobs in the spectrum-using industries.
It might be premature to be definitive about likely uses for the freed up spectrum given the current pace at which markets and technologies are moving. But one broadcasting use that has been suggested involves delivering rock solid TV pictures to moving receivers. There are also ideas for so called "video-walkmans."
Switchover will also mean that even more people will be able to receive digital terrestrial services because only once the analogue signals are switched off, will we be able to extend Digital Terrestrial Television coverage further, and the benefits of Digital Television to all.
Those who have already gone digital have been convinced of the many benefits that it has to offer. But there are still many people who will benefit from Digital Television but are not aware of it.
For instance, people with impaired hearing or sight. All digital platforms have better, clearer subtitling. Digital Satellite and terrestrial carry some programming with an audio description of what's happening on the screen: this really makes television much easier and more enjoyable for blind people.
People with hearing impairments will notice and appreciate that digital television has more channels with subtitles, and also that these subtitles are easier to read than on analogue.
Digital technology also has the potential to allow people to send email via their television, without needing a computer.
One of the much overlooked immediate benefits that many people are finding, is how much better their television reception is in digital than it was before on analogue. Whereas people would suffer a degree of shadowing or interference with their analogue reception, digital reception can substantially increase the quality of picture available.
I am also aware of all the hard work being carried out by The Digital Network (TDN, the multiplex operators) and the Technology and Equipment Group, set up under the joint Government/industry/consumer group's Digital Action Plan, to establish a good Electronic Programme Guide on the terrestrial platform, and enable terrestrial viewers to enjoy the same enhanced service that satellite households currently enjoy.
As well as providing added enjoyment and accessibility, digital television can offer the provision of e-services directly into the home. Many government departments have their own DTV initiatives, keen to capitalise on the strong take up of Digital Television to help deliver their services to the public. Many councils all over the country, from Knowsley and Kirklees in the north, Suffolk in the East, Somerset in the West and Hillingdon close to London, are running or planning digital TV trials.
Services proposed are wide and varied. They range from basic health information to dedicated channels. Others aim to fully utilise return channels to offer true two-way communication. This could be from works and pensions support right down to the ability to email the council that the rubbish bin has not been emptied, or a car has been dumped outside of the home.
Of course, content has to be compelling. No one realistically believes the public will rush out to buy digital TV just to get Government services, but there could be enormous value in linking services to broadcast programmes. For example, having watched an episode of Casualty on the BBC that covered a specific medical matter, the user might press the red key to learn more from NHS Direct on the condition or even to book an appointment with their doctor.
Now, we have got more and more interactive services running, but not many people use the most complex ones like e-mail, or genuine two-way services. How can we encourage them to utilise all these new applications? I'd welcome your ideas.
Take-up
So many benefits! And yet, so many unconvinced people! This is an important issue which the Market Preparation Group of the Digital Action Plan is working on. The Group is preparing a communications and marketing strategy by the middle of next year which will target the retail market as well as consumers.
What should the key elements of this plan be? How do we make sure people are aware of these benefits?
As you know, many organisations, from transmission providers to broadcasters, manufacturers and retailers, regulators and consumer groups – are working in partnership with DCMS and DTI to achieve the criteria for the switchover from analogue to digital TV in the UK, and to provide attractive and affordable digital solutions for everyone in the UK.
So far we have progressed very well. At over 41% of households, the United Kingdom has the highest take up of Digital Television of any EU member state.
Following the award of Multiplex licences to "Freeview", the market for Free-to-air digital television has become very strong. On top of this, the BBC's move to broadcast in the clear will highlight the proposition of non-subscription Digital Satellite.
I am very happy that they have reached an agreement with Sky which will allow viewers to receive their regional version of BBC One and BBC Two in the 101 and 102 positions, and at the same time, be able to manually select the rest of the BBC's national and regional variations listed on the EPG.
Recently we have seen the Cable Television sector emerge from their financial restructuring programmes and able to operate again on a normal basis. This will ensure that they can continue to compete strongly in the pay television arena. On satellite, there are now 6.7 million BSkyB subscribers.
Since the launch of the Pace box last year, the first dedicated low cost DTT adaptor, 800,000 set top boxes have been sold and many new products have come onto the market.
Personal Video Recorders are an exciting development that have the ability to transform TV viewing and recording at home, and to be a useful e-Government tool as well. Many homes have already moved to these PVRs like Sky+ or the new Pace DTT variant but others have yet to recognise the extra qualities such devices offer. PVRs have proven to be a challenging concept to market to the public. How do you simply inform the consumer that they can pause and rewind live TV?
What is clear is that when once people have one in their home, they often find that they cannot live without them. This was clearly demonstrated in last year's GoDigital trial in the Sutton Coldfield area as part of the action plan. Homes were issued PVRs to use in the trial and when they were due to be collected many homeowners were reluctant to let them go.
It is a general point with Digital television: once people have got it, they're happy and wonder how they could live in these poor analogue old times!
I am not sure the cost is still the major issue. Now it is possible to buy a set top box for as little as £79, and we can expect to see the price of a Set Top Box fall much further in the future. There will also be an even greater choice. Already we have seen Netgem launch a box with an internet browser and a modem, Pace have launched a PVR designed for the DTT market and Grundig have lunched a combined DVD player with Digital Terrestrial tuner. These are but a few examples of the developments this year. We expect there to be many more products launched before 2004.
I know that people are still buying lots and lots of analogue televisions, which will need an adaptor to receive DTT, but, unless there is a European-wide agreement, we cannot mandate that all digital television sets are digital. I know that the Stakeholders group is working on a labelling scheme, which might be a good answer, but I would welcome your views on this.
There are also discussions on the minimum specifications of the set-top boxes and digital equipment: do we want all the set-top boxes to be able to cope with subtitles, teletext, interactivity, or do we agree that, to ensure that everyone can find a very cheap box, to convert a secondary set or a VCR, some boxes could just do the basic conversion job? On this as well, I'd welcome views.
Consumers' involvement
We have always said in the context of digital switchover that the interests of consumers are paramount. We have set criteria relating to affordability and accessibility. We have ensured that the needs, legitimate expectations and welfare of consumers are at the centre of the Digital Television Action Plan.
The preparatory work carried out over the past year and developments in the market, means that we can now begin to implement action towards digital switchover. The Government will be making some key decisions during the next eighteen months and it is therefore particularly important that we involve consumers closely in that decision-making process.
In September 2000, we set up the Viewers' Panel which looked at consumers' attitudes to digital television. The Panel's report was issued in December 2001 and most of their recommendations have now been addressed through the work of the Digital Action Plan. Some of the consumer organisations on the Viewers' Panel are members of these task forces.
However we are aware that much of the work of the Action Plan can be of a technical nature and that consumer groups do not always have the opportunity to discuss specific consumers' interests and concerns with Government. We have therefore been considering how we might better engage more closely with consumers.
We have looked at the very useful case study issued last December by the National Consumer Council on involving consumers in communications. This recommends four complementary ways: information gathering, consultation, participation through committees or panels, and representation.
We think we are already applying the first three ways: we are gathering valuable information through the research work carried out: we plan to consult the industry and consumers more widely next year on progress towards switchover: and we intend to undertake qualitative research on specific issues.
On the fourth - representation - we need to do more. We have decided that the most effective way forward is to invite a small number of key consumer organisations representing a wide range of consumer interests to be members of an Expert Group, which will advise Ministers directly on consumer issues relating to switchover.
The Group will have two specific tasks. Firstly to help review the criteria towards switchover and secondly, to prepare a report for inclusion in a consultation paper we will launch next year.
Some of the issues I expect the Group to give their views on are communications with consumers; equipment and installation issues, issues relating to the transitional stages and implementation of switchover and any regional implications.
A number of key organisations including the Consumer's Association, NCC, VLV, RNIB and a few others have agreed to nominate their experts and I am very grateful for this as I appreciate the commitment they are making.
We in return will give them support and resources to undertake the work, including funding some research and we commit to consulting them before we take any major decisions on switchover.
The industry keeps on saying that they need us to name a date for switchover, that without the certainty it represents, they will not get their shareholders and bankers to fund the necessary investments.
But, at the same time, we cannot simply shift from a criteria-based approach to the announcement of a firm date, without knowing whether the interests of the consumers are fully safeguarded.
I will work with the Expert group on all these issues, but I would be glad to get your preliminary views on my four questions on digital: how to increase the consumer's awareness of the benefits of digital television? How to ensure people are comfortable using all the interactive services? How to deal with the increasing legacy of analogue equipment? and how to reconcile consumers' and industry's interests in "firm date" versus "criteria" debate ?
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