Digital Migration

Briefing to Portfolio Committee on Communications by chair of Digital Dzonga

11 March 2008

Digital Dzonga

2

Background

Lara Kantor appointed by Minister as chair of Digital Dzonga

Released from other duties by SABC in order to focus on Digital Migration

In absence of other Council members have developed proposals on Dzonga structure and functions and requirements for implementation plan

Digital Dzonga

Digital Terrestrial Television System

[Roof-top aerial]

TV

Digital Playout Centre

Production of Digital Content or

Digitisation of Analogue content

STB

Background (2)Digital Dzonga

Transmitter

DTT changes the nature of television

Technology features

Multi-channelBetter quality pictures and soundRoute to HDTVInteractivity (with or without return path)Addressability

PROS• More channels allows consumers a greater choice•Bouquets available for specific interests – greater customer differentiation• Potential for better control of subscription, licence revenues•Quality can be controlled per channel or per event to optimise resources

CONS • DTT requires distribution infrastructure, upgrades on transmitters, compression technology and STBs • No signal in marginal areas • Multichannel makes it harder to attract viewers to a given channel• Complexity of decoders

Background (3)

Signal Distribution and Transmission

Content Production, Packaging and Programming

Signal Reception and Devices

Transmitter Network rollout needs to be undertaken

Costs of signal distribution will rise

Transmission specifications need to be decided to determine, for instance, how many new channels will be available

Design of Electronic program guide (EPG) needs to be undertaken – may require co-operation of different broadcasters

STB specs to be developed which will determine what kind of services can be offered

Revenues and business models will be impacted: license fee collection, interactive service revenues

DTT migration therefore requires the co-operation of multiple stakeholders – therefore a need for a

“Digital Dzonga”

Broadcasters will need to digitize archives, studios, contribution and production networks

Broadcasters will need to develop and test new DTT channels

DTT Impacts Free-to-Air Broadcasters’ Value Chain on Different Levels

Background (4)

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Background (5)

Dzonga chair previously served as one of the DMWG chairs who facilitated the drafting of detailed recommendations on Digital Migration handed to the Minister in late 2006

The DMWG consisted of representatives from the broadcasting industry (including the SABC, community and commercial licensees and signal distributors), ICASA, government, civil society and organised labour

The concept of a Digital Dzonga has its roots in the DMWG proposals

Digital Dzonga

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Recommendation by the DMWG, Nov 2006

“That government should establish a joint body with industry to develop an action plan for the switch-off of analogue television broadcasting, to monitor the switchover process and promote consumer awareness”.

Digital Dzonga

8

Why is there a need for the Digital Dzonga?

Scale and complexity of the project

Involvement of multiple stakeholders

Need for co-ordinated roll-out and switch-off

Need for strong, uniform communication to public

Digital Dzonga

Upgrading vulnerable

viewers

Selling digital transition

Digital Dzonga consistent with international best practice

DMOL (Digital Multiplex Operators Ltd): represents all multiplex operatorsOperational oversight of all multiplexes Manages new channel launches, channel numbering, technical upgrades, and definition of SI including EPG requirements Liaises with transmission providers

Managing technical platform

Help Scheme: contracted-out but overseen by the BBC with advisory government role Tasked with subsidising/assisting severely disabled and over-75s with digital conversion Cost: ~£600m 2008-2012 (similar scheme in France would probably cost less than a third) and is responsibility of Digital UK-type body)

DTG: industry group representing all main digital TV players Plays key role in setting standards for DTT (‘the D-Book), and therefore Freeview Owns testing unit (‘DTG Testing’) which vendors use to test and (eventually) to gain certification of standards-compliance (e.g. the ‘Digital Tick’)b

Defining Digital standards

specification

‘Digital UK’: Independent, platform-neutral, non-profit organization, owned by broadcasters and multiplex operators, with representation from the supply chain Works closely with government Tasked with co-ordinating switchover Main task: communications (£200m spend between now and 2012)

UK

South African Digital Dzonga envisaged to provide a one-stop shop

Advisory Council Chair: Lara Kantor

Members: Executive Director, Representatives from government, broadcasters, transmission companies, manufacturers and retailers, ICASA, consumer rights groups.

Appointed by Minister, following nomination process

DOC

Admin Office (headed by Executive Director)

Communications Working Group

Carry out Strategic PlanningPlan and Implement public education programmes about analogue switchoffEstablish and drive a public information campaign on consumer issues and switchoverPublic consultation with representatives of consumer groups and other stakeholdersLiaise with other departments and agencies to ensure consumers can identify/buy right kitCarry out marketing/PR/web

Technology & Standards

Working GroupDefine and ‘license’ SA ‘D-Book’, including set-top box specification, define IPR policy, rules for handling SI, EPG, OTA upgrades, etcOversee hardware/software testing & complianceAdminister digital logoEnsure STB accessibility Define and administer warranty and repairs policyDefine and administer bug-handling and bug-fix policiesDefine and administer CA upgrade process and CA vendor relationship Define energy/waste policies

Broadcast Infrastructure Working Group

Transmitter rollout implementation and co-ordinationEnsure TX QoS meets D-BookImplement EPG Group recommendationsAdminister OTA (upgrade) channelCreation of predictive covehgrage databaseAerial standards and aerial group allocationDefine community aerial/reception recommendationsInternational frequency co-ordination

Help & Support Working Group

Viewer support (inc call centres/operators)Plan and implement measures for vulnerable groups, inc. subsidiesLiaison with Technology & Standards Group over warranty, repairs, bugs, etc.Liaison with government departments re vulnerable households databaseLiaison with consumer groups re needs of vulnerable groupsLiaison with communications working group re comms with vulnerable groups

Research Working Group

Report regularly on digital switchover

progress Conduct research

on impact of switchover process

on industryConduct market research re public awareness re switchoverPrepare both internal and public domain reports for communications working group based on aboveMonitor international switchover progressMonitor digital TV market trends

EPG GroupMembers: broadcasters

Digital Dzonga Proposed Working groups

Digital DzongaProposed High Level Staffing

Executive Director

Chief Director: Technology

Chief Director: Help

and Support

Chief Director: Communications

and Research

Personal Assistant

Admin Officer

Director: Technology

and Standards

Director: Broadcast

Infrastructure

Director: Subsidies

Director: Communications

Director: Research

Director:Consumer

liaison

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Steps to be taken in establishing Digital Dzonga

Digital Dzonga

By 1 April By 1 May By 1 June

Other advisory

council members

appointed

Working groups

constituted

Budget finalised

Implementation plan agreed

Key staff recruited

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Key Priorities in the Implementation Plan

Digital Dzonga

1. Set Top Box strategy

2. Consumer awareness

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1. Set Top Box strategy

STB take-up critical for success of DTT migration

Affordable STBs therefore very important - the more affordable the STB, the more households will be able to make the migration to DTT

But also need to ensure that the STB is “future-proof” and allows for applications broadcasters and government require e.g. e-government services

Digital Dzonga

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In 2007 the number of households that could afford a decoder priced

At ZAR 500: 4.6m households At ZAR 300: 5.1m households

Median household income in SA (2006)

The number of households that can afford a STB grows as there is a drop in price

5%

6%

14%

14%

15%

18%

11%

7%

5%

4%

1%

1,986

6,615

11,250

17,209

27,141

49,653

86,070

125,798

172,147

304,573

397,278

Median household income (ZAR/year)

Source: ConsumerScope AMPS 2005, the Genesis Model

*Affordability is estimated at 2.5% of annual household income

Digital Dzonga

Set Top Box strategy (2)

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STB price appears to be greatly influenced by two factors:

Technology choices on specs

Timing of STB roll-out

Need to ensure that informed decisions are made on both these issues

Price becomes critical in light of possible government subsidy

Digital Dzonga

Set Top Box strategy (3)

17

MPEG 4 decoders will be expensive initially, but expected to fall in price 15% a year

Allowing time for mid and high income households to purchase their own decoders will minimize the cost of subsidising non-digital households

Cost of starting subsidies 2008

Cost of starting subsidies 2010

Subsidize STBs

Subsidize STBs

2008 2010 20xx(Analogue Switch off)

Cost savings from delaying subsidy

The later the government starts subsidising set top boxes, the cheaper it will be

Total Cost of Subsidies (Illustrative)

The two reasons to wait are: (1) decoder prices will fall; and (2) higher income users can buy their own unsubsidised decoders as they adopt digital television

Digital Dzonga

Set Top Box strategy (4)

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Key milestones

Define and formalise specifications

Produce rules of operation – “D-Book”

Develop STB prototypes

Test and sign off proto-types

Select vendors

Specify conformance system

Define retail strategy

Define subsidy strategy

Manufacture

Fill supply chain

Digital Dzonga

Set Top Box strategy (5)

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2. Consumer awareness

Key function of Dzonga will be to roll-out communications campaign on migration

Since cabinet announcement on dates for migration there have already been confusing and negative messages in the media

Bad press could impact on success of migration

Digital Dzonga

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Digital Dzonga

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2. Consumer awareness (2)

Dzonga will need to ensure clear, consistent communication on:

What digital migration means for ordinary people

Why it is of benefit

What people will need to do to migrate

When a digital signal will be available in specific areas

Likely cost

Impact on current TVs, aerials, VCRs already in the home

What to look for when buying new TVs, STBs etc

Where to go for assistance /further information

Digital Dzonga

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US spending close to $700m, including “roadshows” and on-line campaign

Digital Dzonga

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UK spending £200m

Digital Dzonga

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2. Consumer awareness (3)

Dzonga will need to, with other stakeholders, develop consumer awareness campaign using variety of media:

Television, radio and print

Community radio

On-line

In-store, post-offices etc

Imbizos

Digital Dzonga

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Other Key Areas in ImplementationDigital Dzonga

Signal Distributors Transmitter roll-out in terms of approved frequency plan

ICASA Licensing and authorisation of current broadcasters to operate in digital and introduce new services

Broadcasters Develop new channels

Work of these stakeholders will take place outside the Dzonga but will be critical in meeting timeframes for migration

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Conclusion

Digital migration an enormous and complex national project

Much work required of Dzonga to co-ordinate efforts of stakeholders and drive digital migration

Support of all stakeholders is required

Digital Dzonga

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Thank you

Digital Dzonga

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Back-up

Digital Dzonga

PHASE 1 Yr 1

31 Stations56% Coverage

Initial STB roll-out

PHASE 2 Yr 2

68 Stations78% Coverage

Initial subsidised STBS

PHASE 1 Yr 3

85 Stations92% Coverage

Mass roll-out of Subsidised

STBs2007 2008 2009

2010

2011

Creation ofDZONGA

50% DTTCoverage

85% DTT Coverage

ELECTIONS2010

WORLD CUP

Analogue Switch-off100% DTT coverage

Info provided by Sentech

Nov/08: DTT Switch-on