Digital Television - an insight on the Greek Market by Theo Kontominas

UNIVERSITY OF LUTON

January 2006

Digital Television: an insight on the Greek Market

Theodoros Kondominas

MA Media Arts: Mass Communications

Abstract: This project deals with the topic of Digital Television. The research examines Digital Television as a technology that will eventually phase out the analogue predecessor. There is an outline of the technologies used by DTV and also the benefits that draw from its use. What is more, the research examines the broad European industry of DTV. Most European countries are the edge of a complete digital switch over and thus an investigation on past and current proceedings provides many useful insights. The main area of focus is the Greek DTV market, as the nation strives to become part of the Information Society. DTV is an important part of any Information Society. Finally the project looks into the Greek DTV provider NOVA. There is an extended review of the service offerings supported with ideas about the future prospects for the company. This research is useful for anyone wishing to learn more about the technology of DTV and more specifically about the current situation in Greece.

Contents:

Introduction………………………………………………..p3 Literature Review………………………………………….p5 The Concept of Digital Television………………………...p14 Digital Television in Europe………………………………p19 Digital Television in Greece……………………………….p29 NOVA TV…………………………………………………..p48 Conclusions…………………………………………………p60 References…………………………………………………..p66 Appendixes………………………………………………….p68

Introduction

The technology if Digital TV has dynamically entered the lives of millions of viewers around the world. It is for this reason that this project seeks out to explore the DTV as a technology, but also to focus on the prospects of DTV in Greece. As Europe is trying to build a stronger â&#x20AC;&#x2DC;Information Societyâ&#x20AC;&#x2122; DTV will play a critical role in bringing TV into the 21st century.

Initially the project investigates DTV as a technology. It examines the prospects of this fairly new digital technology in several dimensions. As the digital signal is superior to its analogue predecessor there is mention to all the benefits that viewers get by using this new technology. What is more, the project considers all the different ways through which viewers can receive the digital signal and critically appraises the benefits and setbacks of each one. The reader is informed on all the relevant information about DTV technology without going into elaborate technical details that are unnecessary for the project.

After a concise introduction into the technology of DTV the project focuses on the European markets of DTV. The research examines economical and sociological aspects of the market as well as a historical review of the most important developments that have formed the market to its present state. As the main area of focus for the project is the market of DTV in Greece, the investigation into the different European markets, seeks position Greece against its European neighbours. As Greece is a member of the European Union it is important to briefly examine the situation of DTV in other European countries.

The projects main area of focus is DTV in Greece. The research examines DTV right from the early years (1998), and brings the reader up to date with a description on the current proceedings. There is also an extensive review of the Greek legislation for DTV which was passed in 1999 and has been successfully enforced since then. The investigation into the Greek market is supported with different cases that have helped form the current situation.

Finally, a section in the project explores the biggest DTV service provider in Greece, NOVA. NOVA is a service that transmits a digital signal through satellite technologies and for some time it was the only provider of DTV in Greece. There is a detailed examination on the service offered by NOVA as well as the services course since it was first introduced in 1999.

The projects structure is such, that it initially examines the broader field of DTV and then slowly intergrades into more specialised areas, concentrating on the Greek market. It seeks to inform the reader about a technology that is predicted to dominate the global TV industries in the near future.

Literature Review

A substantial amount of literature readings was essential for the completion of the project. The readings provided a basis in order one could be exposed and familiarised with the topic of DTV in terms of new technologies as well as further information concerning the history of DTV. Additional necessary information about certain European markets and more specifically Greece were available through these readings. Most of our findings were performed from the reading of publications, yearly reports as well as a literary text (book) that was specialised in the field of the European Television Industries, a book that was especially relevant to the topic.

As the project focuses on the Greek market, although it slightly covers more European DTV markets, it should be noted that a substantial amount of reading was performed in the Greek language. What is more, many of the readings came from a common source; an MA lecturer in the University of City in London, Dr. Petros Iosifidis, an expert on DTV of the Greek market, who was happy to provide much of the necessary information. Dr. Iosifidis is also specialising in the field of Information Society and Media Markets and his expertise in the specific markets is mainly attributed to his Greek origin. He has issued several publications on the topic, being also responsible for performing the research and the issuing of the yearly IDATE reports (Institute de lâ&#x20AC;&#x2122;audiovisuel et des telecommunications) concerning the Greek market. All of the readings mentioned above will be looked at in more detail.

Yearly IDATE reports

Since 1977, IDATE has established itself as one of the leading centres for information exchange and analysis in Europe, specialising in the Telecommunications, Internet and Media sectors. IDATE has raised the standards as a European leading forum, which embraces debating ideas and exchanges experiences among the sectors' players. The organisation relies on specialised teams and continuous investment, gathering information and applying a strategic monitoring system for the observatory of the digital world. IDATE's high-calibre consultants and analysts conduct a wide range of studies and consultancy missions on behalf of their clients.

A substantial amount of the projects content results from the readings of 3 specific IDATE reports. The three yearly reports written by Dr. Iosifidis provided many insights of the first years of DTV in Greece. 1998, 1999 and 2000 were the years that were reviewed by a report under the title â&#x20AC;&#x153;Developments of Digital TV in Europe (Greece)â&#x20AC;?. The three years report, reviewed the period when Greece was introduced to the digital technology and explains haw the DTV market immerged in the Greek economy. An essential legal framework was fashioned by the Greek government in order to control the DTV market and to catch up with the forthcoming evolution. Furthermore NOVA TV introduced the service of DTV in Greece for the first time in 1999. Hence the findings from such thorough reports were considered absolutely essential for the project. The reports initially provided the reader with general information about the Greek TV industry and were going through valuable statistical data that have been used broadly

throughout the project. A review of all technologies used to broadcast a digital signal was also included, outlining the technologies that could be possibly used in the Greek market. The reports early confirmed any suspicions for the lack of infrastructure for digital cable technology as in all of them the cable infrastructure was described as ‘virtually nonexistent’. What is more, the extensive review of the digital satellite developments revealed much information about the regulations and ongoing steps of progress taken by public and private investors. The selected period covered the time of Greek TV industry reforming as well as the establishment of DTV in the market, making each report unique in its findings.

IDATE’s reports contributed a great deal for the review of the Greek DTV industry. Statistics and demographics from the reports helped to demonstrate the situation and make a stronger case. As mentioned before, a substantial amount of the statistics used in this project was taken from the reports. However, as these reports were marginally outdated, different sources of information had to be employed.

The information deriving from the reports was useful for the review of the Greek market in more depth as well. The 2000 report has an extensive overview on the digital satellite TV service of NOVA. As said, the service was introduced to Greek consumers in 1999 and the 2000 review investigates the service on offer more thoroughly. The report provides information on the early stages of the service and examines the case from both the company view as well as the customer’s perspective. What is more, it provides the reader with a case study that took place between NOVA and a second DST provider that emerged at that time.

On the whole, these reports can be considered as the most valuable asset of the research conducted. Since they provide insights for the Greek market only they were consequently used as reference in the chapter dedicated to DTV in Greece. APPENDIX 1 includes the complete IDATE report of 1999 as a sample for the reader to examine the type of information that was included.

Regulating DTV

The next piece of literature reviewed was again an article written by Dr. Iosifidis that was published in INTERMEDIA journal in March 1999. The article was a thorough review on the newly elected legislation concerning DTV in Greece. An assessment of the legislation is included in this study as it provides answers concerning the environment that DTV providers will operate within. The article includes historical data justifying the need for such legislation, and categorizes 5 different dimensions that are part of it. According to the article, Greece was the second European country to enforce a legal framework on DTV after the UK. The article was successful in outlining the environment that DTV providers would operate within the market. The understanding of the legislation was critical for this study as it was absolutely important for the reader to familiarise with the market aspects before looking into DST provider NOVA.

European Television Industries

Before starting to investigate the situation in Greece, it was crucial that the research was also giving adequate information concerning the European environment of DTV. The literature that was reviewed for this part of the research was a book titled, “European Television Industries”, which was written by P. Iosifiis, J. Steemers and M. Wheeler. The content of the book was directly relevant with the topic of the project and more specifically it was ideal source of information in our attempt to provide a review of the European DTV industry. The text was enhanced with a lot of statistics and demographics, many of which have been included in this study. Furthermore, its recent publication (2005) provided contemporary data and information.

Additionally, the text included a fair amount of historical background information on European television industries. A high percentage of this information was included in this study providing the reader with the required background knowledge.

Furthermore, more texts were used in order to gather the necessary information for the study. One of the texts (written in the Greek language) was a handout from a conference held in Greece in May 2001. The topic of the conference was, “Digital challenge: Mass Media and Democracy”. This handout was very resourceful helping in accumulating valuable data and knowledge about other countries in Europe (statistics and demographics within the European Union). However, a disappointing point was that the data were out of date and hence a lot of the information was inappropriate. The fact that it was written in

Greek was an extra challenge when trying to import ideas and opinions on this study. In general terms, the handout was totally constructive being able to offer to the reader an accurate illustration of the climate of the particular period within the Greek market.

Another text that was used while researching the European DTV industry was from a presentation given by Dr. Iosifidis in a conference held by the University of Athens in 1998. The text was titled â&#x20AC;&#x153;Digital TV in Europe: present and futureâ&#x20AC;?. This text provided enough information about the concept of DTV as well as the possibilities that derive from the use of the new technology. Much of this information was included in this study as background information for the technology of DTV in order to allow the reader to reach a certain degree of comprehension. This particular text was written during the period that Greece was on the break of introducing DTV in the market; and once again it provided a glimpse of the global, the European and the Greek environment of the time.

This text could be looked at as the introduction of DTV in Greece. It really made the reader aware of the concept and the benefits of DTV, almost as if preparing them for a technology that was about to be released. What is more, the author was extensively referring to the benefits that result from Digital Terrestrial TV, a technology that was only recently adopted by the Greek society. Thus although the text was written in 1998 it promotes ideas that are still contemporary and valid.

During our research, we found out that there is a plethora of literature written on the topic of DTV, and more extensively about DTV in Europe. However, this project decided to

concentrate on literature that contextualized the situation that was influencing Greece. Thus, although there is reference to other European DTV industries, the purpose of the literature research was to gain a clear perspective of Greeceâ&#x20AC;&#x2122;s situation in relation to other European countries.

NOVA

NOVA was until recently the sole provider of DTV in Greece. We believe that our choice to investigate NOVA and use it as a case study in our research was really successful as it helped, to a great extend, the attempt to come to solid and concrete findings concerning the Greek digital market. The example of NOVA was included in many of the texts relating to the Greek DTV market mentioned above. However as this research required more information on the service, additional resources were employed. Much of the information concerning NOVA came from within the company, which was able to provide more secure information of the service and its offerings. Much of background information was retrieved from the texts mentioned above but also from other company publications and magazine articles Finally additional client related information was retrieved through mystery shopping specifically conducted for the purpose of this study.

DTV Background Information

Before the reader begins to interpret the findings of the several DTV markets, it was vital to offer him some minimum familiarity with DTV as a concept. The research for this

background information played a very significant role to introduce the reader into the technology of DTV without going into technical descriptions and detailed information.

A fair amount of this information was available in many of the texts mentioned above. Further information was found from basic Internet searching. The information retrieved was then presented in the project from the perspective of a â&#x20AC;&#x2DC;laymanâ&#x20AC;&#x2122; and was used as a guide throughout the project.

The research programme for the completion of this project required a substantial amount of literature review. As the project did not employ extensive primary research, most of the information was collected from secondary resources of books, published articles, speech handouts, previous research results etc.

It should be clearly stated, that there is not a great deal of publications on the chosen topic as it specifically concentrates on the Greek market. Nonetheless, Dr. P. Iosifidis is unquestionably an expert on the topic of DTV in Greece but also Europe, as he has published most of the relevant literature. His ideas on the DTV market in Greece have been expressed for a long time now, and some of the innovations that were published as early as 1998 are currently taking place in Greece. Having a great deal of expertise in markets and the technology behind DTV he was able to successfully bring in and adopt his knowledge in Greece. Dr. Iosifidis contributed many of the texts used in the literature review for this project. It is not a coincidence that IDATE has asked him to prepare all reports on the DTV market for Greece. The research and literature review that this project required would not

have been possible without Dr. Iosifidis publications. He is the only academic author that specifically deals with the DTV area in Greece.

The literature reviewed for this project made it possible to derive to certain conclusions about DTV in Greece. The full range of these ideas is presented in the next chapters.

The concept of Digital Television

On March 25, 1925, Scottish inventor John Logie Baird gave a demonstration of televised silhouette images at Selfridge's Department Store in London. Since then technological advances have allowed the concept of Television (TV) to become part of everyday life in an immense degree. TV has dominated modern societies as a form of entertainment and looks to have a secure place in the future. This project will investigate the future prospects of TV or more accurately, Digital TV as it is the dominant technology form that will take over from the analogue technology used until recently.

This new improved digital technology will take the experience of TV broadcasting to a new level. Analogue broadcasting artifacts, such as ghosting and snow as well as static noises in the audio will no longer exist with this new technology. On the other hand, a slow data rate transfer may result in complete failure in situations where analogue television would have produced an imperable but watchable image.

DTV converts sound and pictures into a digital and compressed format, using as few bits as possible to convey the information on a digital signal. This technique enables several television channels to be carried in the space used by the current analogue signals to carry only one channel. Digital signals can be received by standard aerials, satellite dishes or via cable but have to be decoded and turned back into sound and pictures by using a separate set-top box, or a decoder built into your television (an integrated digital TV set/ iDTV). What is more, the change over to DTV matches the change in the picture format from an

aspect ratio of 4:3 to one of 16:9. This has as a result, TV to get closer to the aspect ratio of movies and that of human vision. Traditional screens using the 4:3 aspect ratio lead to black bars above and below the picture.

Digital television has already changed the way millions of households think about TV. DTV, either from cable, satellite or terrestrial, offers more choice and opportunities for millions of people. In the future DTV will be able to provide health advice, shopping, education, holidays, text messages, e-mails, auctions, games and even food from the comfort of your oneÂ´s personal TV set. Digital TV enables people to enjoy TV in many new ways through enhanced and interactive services that add to the viewing experience. In addition, true two-way interactive services can be accessed on satellite when the box is connected to a telephone line or via the built-in return path on cable. Gaming, betting, shopping and banking services amongst others can all be accessed for the cost of a simple telephone call.

Digital Terrestrial Television (DTT) doesn't currently support two-way interactive services although a fixed or mobile phone service can be used to engage with interactive services. Some manufacturers are developing DTT equipment that also provide access to ADSL Broadband. It is worth taking a look at the different technological means through which DTV can be delivered to consumers.

Terrestrial Digital terrestrial television (DTT) is in the process of deployment used in a number of countries in order to deliver DTV. Governments see DTT as a technology that will push their country to the forefront of the ‘digital revolution’ and free up existing TV frequencies for resale, to other potential communications providers. On the other hand broadcasters see DTT as a way to fight competition from satellite and cable DTV and other digital program distribution technologies, such as personal digital video recorders (PVR) and video on demand (VOD). Hardware manufacturers see DTT as a way to sell set-top boxes first and new all-in-one TV sets later. Finally Consumers see DTT as a way to obtain more programs from their existing TV antenna at the cost of a settop box or new television. Satellite DTV has proved to be commercially prosperous in the satellite television market, where it is used to ‘multiplex’ large numbers of channels onto the available bandwidth. The business model for satellite DTV in the U.S. and the UK is similar to that for cable TV. Satellite DTV operators tend to act as packagers for large numbers of channels, including pay-TV. This is something that will be investigated later on in this study when the Greek satellite provider NOVA is looked at in detail. Satellite providers of DTV are able to operate with greater RF bandwidth which allows them to have an advantage over terrestrial DTV operators on both the number of channels and picture quality.

Cable Analogue cable set-top boxes have existed for some time. By switching over to digital, the main advantage appears to be simply better picture quality and more channel availability. However many other features become possible with the switch over from analogue. Users will be able to access a TV guide (seven-day schedules) with extended information and the option of setting reminders on selected programs. Furthermore, parental censorship on channel content can be exercised in an advanced form. Some of the more advanced cable networks have the technology of a two-way data communication path which allows users to return information back to the operators. This allows them to extend services offered to: web style content viewing, gaming, voting and other "on-demand" services such as on-demand films. IPTV IPTV (Internet Protocol Television) is the last out of the technologies used to broadcast DTV. However it is personally believed that Internet technologies for the use of TV broadcasting are the future and in the next decades will be the dominant technology for broadcasting. With the use of IPTV technology households will be able, through a single broadband Internet connection, to provide homes with Triple Play (voice over IP, Internet access, and digital television). The concept of such a service is desirable and very appealing. Not only set-top boxes are becoming smarter (they are essentially a micrograph of PC's) but also they will be able to interact with other devices such as PDA's, mobile phones, and

the Internet so to provide a truly flexible solution allowing local information to be tailored to specific regions (e.g. weather and news from your local area).

This completes a brief overview on the subject. It is evident that there are many advantages arising from the technology of DTV. Advantages from the usersâ&#x20AC;&#x2122; side but also from the manufacturers and broadcasters side, as all have something to benefit from this fairly new technology. In the next chapter we will take a closer look at the situation and the evolution steps of DTV in the continent of Europe. This will provide a good insight of the environment before the study intergrades more to investigate the situation in Greece.

Digital TV in Europe

After the brief introduction of the concept of DTV it is necessary to examine the situation in the continent of Europe. It is fascinating that Europe has twice the number of TV households than the US. Research has shown that by 2010 there will be around 240m TV households in Europe contrast to the US (North America) where the penetration will be roughly 125m. However, both markets are relatively small if you compare them to the Asian one, which holds 60% of the global TV households1.

What is more, the majorities of the broadcasting technologies used in Europe and the US indicate that the European continent has had a much less penetration of DTV in households. It is worth mentioning that almost 90% of TV households in the US subscribe to some sort of DTV provider, either cable of satellite while in Europe the corresponding penetration is only 53%2. As terrestrial TV though seems to be the dominant form of broadcasting in Europe, it is clearly the availability of free terrestrial broadcastings that makes the European market dynamics in the emerging DTV sector very different than that of the US. Consequently, as Europe invests towards a better Information Society the penetration of DTV is predicted to highly improve.

It is important to note how the European TV industries are constantly evolving over the past years at many different levels, and DTV is the centre of another transformational period that is taking place at the moment. This explains why this thesis is trying to 1 2

Source: http://www.researchandmarkets.com/reportinfo.asp?report_id=225274&t=o&cat_id=15 Source: http://www.researchandmarkets.com/reportinfo.asp?report_id=225274&t=d&cat_id=15

investigate and analyse DTV within Europe and more specifically Greece, as major developments are underway on a regular basis.

Since the 1980’s European TV industries have been under many reforms and transformations. The most radical reform that took place occurred through the late 80’s and early 90’s when the heavily regulated and predominantly state owned monopolies of European TV networks transformed to a profusion of Television offerings operating in a less regulated environment of competing private and public TV stations. This was inevitable as Television industries in Europe had to face the challenges of “technological innovation, the rise of global markets, deregulation and more intense commercial competition”3, a fact that other parts of the world had already faced.

As clearly explained in chapter 1, DTV is a technology used for transmitting and receiving broadcast television signals. DTV can be received through three ways, satellite (DST), cable (DCT) and terrestrial (DTT). Although DTT is the cheapest of the three formats, its inferior technology does not allow the same number of channels as DST or DCT. Statistics show that in 2002 the pie of DTV amongst the three technologies was split as shown in the following pie chart:

P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing

DTV Technologies in Europe

23%

DTT DST DCT 70%

APPENDIX 2 contains a table on the availability of Digital Television Platforms across Europe

Digital Terrestrial Television was initially adopted by Sweden, Britain, Finland and Spain. In Sweden, DTT was launched in 1999 and although it was free of charge it didn’t manage to attract many subscribers. By the time, the platform did not include TV4, the country’s most popular channel and the decoder was expensive (€300-€450). As a result, the development of DTT was slow if one considered that the penetration was only 2% by the year 2002. The scenario was very similar for the rest of the countries mentioned above as their markets enjoyed a rather high penetration of DST and DCT. However, we personally believe that DTT can still be successful in markets where DST and DCT seem strong, as it can provide

Source: P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing p.108

better sound and image than analogue terrestrial and considering that the package is affluent in terms of TV programmes choice.

Taking the example of Greece, DTT was just introduced in January 2006. In a country where DCT is completely absent and with only one provider for DST dominating the market, the opportunities for DTT seem quite optimistic, provided that the â&#x20AC;&#x153;bouquetâ&#x20AC;? on offer will be both appealing as well as affordable. The project will investigate this case when the research focuses on the Greek DTV market in the next chapter.

Without doubt Digital Satellite Television is the leading technology amongst European nations and is attracting the highest commercial interest. However, DST has been loosing share to DCT which is the fastest growing DTV platform. Forecasts show that by 2008 the cable platform will take the lead over from satellite.

The Rise of DTV in Europe

The concept of DTV was initially introduced in the US in 1994 and by 1996 it was present in Japan, Australia, and Latin America as well as in some key European countries like France, Spain and Italy. It was not until 1999 that DTV established its presence in most European countries. Statistics show that within 2 years (1997-1999) DTV household penetration in Europe increased from 2m to 10m. Forecasts predict that by 2007 DVT

penetration will reach almost 100m homes. The table below shows the household penetration of DTV from 2000 until 2008

Digital Television Ownership across Europe

Household Penetration (%) Number of Households (m)

200 0

200 1

200 2

200 3

200 4

200 5

200 6

200 7

2008

18.9

24.3

32.2

42.2

56.4

85.5

98.8

109. 3

Source: Source: P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing p.111

This tremendous growth is resulting from the introduction of the new digital technologies, the â&#x20AC;&#x153;technological convergenceâ&#x20AC;? amongst the majority of the EU countries, as well as the aligned European regulatory framework which allowed flexibility for companies to exercise a looser cross media ownership in their attempt to acquire the necessary funds required for investment in DTV technologies.

It is worth noting that the UK has the largest household penetration than any other nation within the EU. At the end of 2003, 48.4% of the British households had had DTV. At the same time, the European average was 26%. The reason behind the success held by the Brits is attributed to the intense competition within the local market. What is more, DTV in the UK operates on all three platforms satellite, cable and terrestrial. The powerful competition

resulted in providers reducing prices for the purchase of the set top boxes (eventually the set-top box was offered with no charge) and subscription prices were set at relatively low prices compared to other European countries. An additional reason behind the successful penetration of DTV in the UK is also the limited number of terrestrial channels (5) available.

On the other hand Germany, Europe’s largest market, at the end of 2003 had a extremely poor penetration of just 4.3%. The situation in the specific market is that it is flooded with free to access channels on cable and satellite, and the public service broadcasters offer an extra 15 channels option with a charge of only 15.00 € per month, a fact that decelerated the desire of German viewers to join pay DTV service.

Since this study is going to concentrate on the Greek market it is worth to take a quick look at a small case study within the Greek market. In 2002 NOVA TV the current sole provider of DTV in Greece (DST) came up against a second provider trying to break their monopoly. The new company (Alpha Digital Synthesis) acquired the rights to broadcast a big share of the national football league. The objective of their plan was to attract as many as 300,000 subscribers during the first 2 years. However the forecasts did not prove realistic as the demand from new subscribers was limited. This in combination with huge amounts invested to ensure the broadcasting rights led ADS to a € 72m debt, and eventually the company was bankrupted. Attempting to further investigate the failure of the new entry, one can easily understand that the main reason was that the company did not meet its target of 300,000 subscribers.

This was the result of the high price that the consumer had to pay for the purchase of the relevant equipment (set top box and dish), as the required price of €450.00 could not be easily endured by the average Greek consumer. Nevertheless, the new DTT platform that has recently taken off in Greece ιs expected to create a completely different environment and eventually skyrocket the competition in the DTV market in Greece.

All the examples above demonstrate the differences in the establishment and success of DTV by country in Europe. The entire situation shows that DTV is struggling for survival forcing a large number of key players of the European markets to cooperate instead of competing. For instance, media entrepreneur Murdoch and its New’s Corporation, a much intergraded global media company is involved in newspaper publishing in addition to the production of film and television. In the field of DTV, New’s Corporation has a substantial share of 35.4% in BSkyB, a DST provider in the UK and also owns Sky Italia another DST platform in Italy.

It should be said that Murdoch is becoming a significant key player in the DST market across the whole of Europe. What is more, New’s Corporation established a partnership with BBC for the free-view DTT service; which means that New’s corporation has in the same time presence in the written press, terrestrial TV, DST as well as DTT.

Some may argue that Murdoch holds too much power in his hands as he can control what is published and broadcasted to millions of people, but this is a different issue that the present analysis should not be dealing with.

As digital take over from analogue is inevitable, the EU and all its member states have decided to impose a plan on the different countries for the digital switch over from analogue. So far only a few countries has committed in setting a deadline for the switch over. In Italy the government hopes to switch off the analogue frequencies by the end of 2007. In order to meet this deadline, the Italian government is offering a â&#x201A;Ź150.00 discount to the first 700,000 buyers of set-top boxes required to receive digital signals.

Spain is following Italyâ&#x20AC;&#x2122;s example and they also plan to switch over by 2007. In Germany, the switch off is scheduled to take place in 2010 but it is possible that this date will have to be revised considering the low penetration statistics of DTV until now. The British Government has scheduled the switch-off in 2012 as they hope that the infrastructure enhancement taking place for the 2012 Olympic Games will make it less costly. In Greece the public broadcaster ERT, is in charge of the switch over from analogue to digital and is hoping to make this switch by the year 2012.5

Although a complete switch over to digital may seem attractive and exciting it is important to consider some of the costs that consumers are going to have to endure before they can make the switch. Until now the costs for purchasing new equipment to receive a digital signal have been high. In the case of digital terrestrial, customers are only required to make a one-off purchase of a set top box or even a new TV set with an integrated receiver, and thus it is a cost that can be tolerable by most European citizens. With digital satellite though, customers need to incur the costs of a dish as well as the set top box and 5

P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing p.125

bear the cost of a monthly subscription. The subscription charge as well as the initial fee for installation and purchase of the dish and set-top box varies from one country to the other. One must also consider the national GDP per capita within a country in order to have a clearer picture of the pricing situation. For instance in Greece the monthly subscription for NOVA DST service was €50.00 in 2000 while the per capita GDP was as low as €11,351.00. In contrast, in the UK, the per capita GDP at the time was €20,733.00 and the monthly subscription for the basic package started from €15.00. This example summarises the considerations and the degree of difficulty that each government in the EU must overcome before they commit to a dead-line for the final switch-over.

Predictions indicate though, that the prices for purchasing equipment and the monthly subscriptions are experiencing a declining trend and in the following years DTV is expected to become more affordable for most socio-economic groups within the EU. Estimates predict that by 2007 a DTT box receiver will cost as low as €36.

Public awareness is also an important constituent that will contribute to the successful transition from analogue. A large part of the European population is still uncertain about the technology of DTV which results in a rather indifferent attitude towards this new service. This is evident from the 2002 statistic that showed only a 20% penetration of DTV within households. Public authorities as well as private companies should “play an important role in promoting public awareness and building user trust and confidence in digital technologies”.6

P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing p.128

Finally it is absolutely crucial that a clear and transparent regulatory framework for DTV should become effective for all member states of the EU. The framework should form a common ground for â&#x20AC;&#x153;interconnection for networks, technical interoperability of services and compatibility of equipmentâ&#x20AC;?7. The regulators of this framework should provide a competitive environment for the businesses entering the DTV market in order to make a return on their investments (mostly on technology) but should also protect the public interest in having access to a high quality service at the lowest possible cost.

It is critical to ensure that monopolies are avoided, something that will provide challenges for the regulators, as experience shows that having more than one DTV service provider within one market, most times causes a plethora.

Having completed the review on the situation in respect to DTV in Europe, it is clear that ongoing developments are occurring at lightning speeds. The digital era has begun penetrating the market for some time but it can still be considered as walking its initial stages. However, as the future demand for DTV is increasing rapidly, it will not be long before analogue television will belong to the past.

In the following chapter the reader will be able to examine the regulatory framework imposed on the Greek market as of 1999. Greece was one of the first European countries to make and enforce such framework.

P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing p.128

Digital TV in Greece

The Birth of Digital Television in Greece

In this part of the project we are going to look at the market of Digital TV in Greece. It is important to examine the origin of DTV in the country as this is the only way to bring the reader up to date on the current situation.

Up until the late 80â&#x20AC;&#x2122;s, Greek viewers could only select among the 2 channels offered by the national public broadcaster ERT (Hellenic Radio Television), ERT1 & ERT2. In the turn of the 90â&#x20AC;&#x2122;s the first commercial channels appeared and since then they have seen a tremendous increase in number and popularity. Today, commercial channels such as Mega, Ant1, Alpha and Star have established themselves as market leaders capturing the majority of market share as they ensure full national coverage. It is worth mentioning that there is also an additional 160 local channels with a very limited audience.

Not long after the introduction of private channels, in 1994 the first pay-TV service appeared in the Greek market. The service was offered by a company called Multichoice Hellas S.A. The technology used by the time was analogue terrestrial, and the service offered to the viewers included all the main public and commercial channels, on top of additional three (3) channels that were the key part of the pay-TV service. These three channels covered three main viewing market segments: a) films (Filmnet), b) sport (Supersport) and c) kids programs (KTV).

By 1998 the number of subscribers was approximately 250,000 which at the time represented a 7% of TV household penetration 8. At that time those figures expressed a promising future for the pay-TV market in Greece. It was beyond any doubt that the same company would be the first to provide the new digital pay-TV services (NOVA TV), but in satellite broadcasting form this time.

The year long period between 1998 and 1999 was a turning point for DTV in Greece as it was the time when most of the infrastructural and legal developments took place. NOVA TV had been able to provide satellite TV services since the beginning of 1998, but the Greek government decided to freeze proceedings as they believed that a regulatory framework should be created first, under which they would be able to control the developments. On the other hand perhaps this was the only way to allow more interested players to participate so to avoid a monopoly situation.

The initial desire of the government was to establish a unique national platform for digital TV on which every interested party could participate. The new regulation on â&#x20AC;&#x153;the provision of subscription radio and television services and related regulationsâ&#x20AC;? 9 became a state law in November 1998; however NOVA had not still acquired the permission to broadcast. At the same time the commercial channel Ant1 expressed interests in entering the market of Satellite DTV. What is more, the new law applied only to pay-TV services either analogue or digital.

8 9

Source: http://europa.eu.int/ISPO/infosoc/telecompolicy/en/idategr98.pdf Source: http://europa.eu.int/ISPO/infosoc/telecompolicy/en/idategr98.pdf

Satellite Digital Services

The year of 1998 saw the actual birth of satellite DTV in Greece. The Greek legislation guaranteed the free reception of satellite TV, which complied with the provisions of the European Union and Council. Hence anyone would have access to any satellite TV programme that could be reached by their receivers. In other words, Greek viewers, provided that they had the proper equipment, were able to have access to famous programmes and broadcastings such as CNN, MTV, TV5 etc with no additional charge. In early 1999 NOVA DT announced the beginning of its broadcastings in Greece. There will be an extensive overview of NOVA TV in the next chapter. Furthermore, ERT the national public broadcaster participated in the national satellite TV programmes EUTELSAT and was able to broadcast programmes to the Greek communities abroad. The commercial channel Ant1 also started to broadcast its programme to Australia and the U.S.

Cable Digital Services

Cable TV is not available in Greece at the moment. The existence of cable TV is only experimental and it appears in only 2 neighbourhoods in Athens and a few more scattered locations around the country. The lack of Cable TV is partly due to the barriers of the Greek legislation and partly due to the lack of any infrastructure to host this technology. The inexistent infrastructure has caused a delay in the market for pay-TV and it was only after the introduction of more modern technologies, such as broadcasts through satellite, that the market began to flourish.

Terrestrial Digital Service

In January 2006 public broadcaster ERT, is about to introduce the service of DTT in the Greek market for the first time. Initially the service will present 3 new channels that will cover three different market segments. ERT Digital is seen as the sole competitor of NOVA TV and it will be interesting to see how this new technology will be adopted by consumers. There is a more extensive review of the service of DTT later on in this chapter.

TV Household Demographics/Market Prospects

The main reason that satellite pay - TV has not spread so quickly and easily in Greece, is that as any innovation it suffers a major set back due to the high budget that was a prerequisite by each and every household. The cost of the equipment and new services are bound to burden consumers at a greater extent as compared to other European countries. This is the outcome of the rather limited population of the country, which do not allow the economies of scale to play their role in formatting a lower cost system. Despite all difficulties, NOVA DTV has managed to reduce the average cost per dwelling, thus it is expected that the number of subscribers will increase significantly in the coming years.

Greek TV programme is primarily built from foreign productions (mainly American) in the zones of films and serials. However the viewers seem to prefer domestic productions. Statistics from the measurement of local ratings (AGB) show that certain Greek productions aired in the commercial channels usually achieve ratings over 50%. This fact is

a rather big headache for pay-TV, as it has to face the challenge of meeting the demand for domestic productions in order to satisfy its viewers and eventually attract more fans.

The Demand for a Legal Framework

DTV in Greece was considered, even in the early stages, a very promising sector in the media market. Despite the small size of the market, not only it managed to attract the attention of most media key players and telecommunications entrepreneurs, but also the state organisations ERT and OTE. What was missing was the need of a legal framework that the government should create in order to prevent potential negative consequences.

The early foundation of the NOVA TV and the interest expressed by Greek tycoons (mass media owners and service and technology providers) willing to get into the field, initiated negotiations about the regulatory status in Greece.

In order to avoid the formation of a private digital monopoly in the Greek market, the government introduced a relevant law (March 1998). Furthermore it announced a national digital platform that would broadcast both radio and TV signal. The new platform would be funded by the state organisations ERT (the national public broadcaster) and OTE (National Telecommunications Organization) as well as other private foreign and Greek investors.

The introduction of the new law gave birth to DTV in Greece. It was a very crucial moment in the history of media and communications for the country. As of March 1998

Greece opened the market for DTV and allowed the private owned NOVA TV to begin operating. The new law stated that: â&#x20AC;&#x153;a provider can participate in no more than two types of mass media (television of any type, radio of any type, newspapers). This and many other specific restrictions discourage monopolistic trends in the mass media field. As for the programme, at least 20% must be in the Greek language and 25% of the foreign programme must be translated, either subtitled or dubbed, into Greek (according to the last modification the latter percentage should be increasing by 5% yearly until it reaches 50%). The draft incorporates a number of provisions of 97/36 EU Directive (which is an amendment of the 89/552 EEC Directive). For instance, at least 40% of the programme must be of European originâ&#x20AC;?10.

It is worth looking closely at the regulatory framework that was imposed on the market, which is summarised in the next section.

Regulating Digital TV in Greece

In the autumn of 1998 Greece established a regulatory framework for the development of Digital TV. The legislation was under the jurisdiction of the Ministry of Press & Mass Media and it gained the majority of voting in Parliament on 29 September 1998 and soon after that became law. With the introduction of this new legislation, Greece was introduced to a new range of products and services such as: interactive TV, subscription TV, pay-per-

Source: http://europa.eu.int/ISPO/infosoc/telecompolicy/en/idategr98.pdf

view, transactional services like home banking and home shopping etc. Hence it is fair to say that Greece entered into a new phase of the ‘Information Society’.

The need for such legislation became vital after the announcement of plans for the introduction of a digital satellite service in the market. Earlier in the year, Multichoise Hellas jointly owned by Nethold had announced their intension to launch a digital satellite bouquet called ‘NOVA’. The government however decided that the launch should be put on hold until a proper regulatory framework was set, which could prevent potential market exploitations and protect the public interest.

This new legislation at the time was the most significant piece of broadcasting related legislation since 1995, which covered issues concerning analogue private radio and television stations (i.e. licensing, advertising etc.) operating in Greek territory. The new law not only addressed issues concerning DTV, but also dealt with subscription TV and payper-view options. Furthermore, with the induction of this new law, Greece would become part of the few European countries, which had already designed and enforced a law concerning DTV at the very early stages of the market development. As a matter of fact it was only Britain at that time that had issued such a comprehensive piece for DTV legislation11.

The harmonisation of the Greek legislation at such an early stage was mainly the result of the government’s urge to avoid a duplication of the disordered situation of the late 80’s and early 90’s, when radio and TV liberalisation occurred. Secondly, the immense pressure 11

Broadcasting Act 1996, London HMSO

from the side of Multichoise Hellas willing to launch its NOVA ‘bouquet’ was reason enough for the government to prepare and enforce the right environment.

Let us now consider the key aspects of the legislation in more detail.

One National Digital Platform The government’s proposal was that one digital platform should be set up (in Greece) and

that all interested parties could have equal access to it. This provision would encourage potential players to enter the market in order to provide digital services “without having to overcome barriers set by incumbents such as the public broadcaster ERT and the state telecoms organisation OTE”12. Before the new legislation was issued, companies that wished to launch subscription channels needed to get permission from ERT. With the new law ERT lost the authority to control future subscriptions in the market. The new provision concerning DTV platforms policy was now in line with E.C. legislation. Furthermore, any private company wishing to participate in the sector should have the approval of the Minister of Press & the Mass Media.

Allocation of Licences The condition of ‘One’ digital platform means that all parties wishing to enter the market

are given equal access. What is more, licences for broadcasting digital radio and TV will be given only to those companies (either LTD’s or PLC’s) which can demonstrate

Dr P. Iosifidis, “Regulating digital TV: a case study”, INTERMEDIA March 1999/Volume 27/NO.1

“transparency in ownership and control”13. This new setup can encourage Greek but also foreign investors to participate in this new advanced technology.

Responsibility for Granting the Licence As mentioned before, the licences for any digital service will be assigned by the Minister

of Press & the Mass Media with the approval of the National Broadcasting Council (NBC). The NBC will not only examine the applications for a license, but it will also assess the performance of the new broadcasting station (quality of service, compliance with regulations etc).

Content Requirements The new law enforces certain requirements that need to be upheld by the DTV service

providers. The new law maintains the same provisions “of pluralism in the media, protection of minors from harmful content and advertising restrictions” 14. As already said, the new legislation also requires that 25% of DTV providers programming must in Greek, furthermore, 25% or more of the foreign programmes should be either subtitled or dubbed. At last, DTV providers that broadcast more than 5 channels are deemed to allocate one of their channels for Parliamentary coverage.

Ownership Restrictions The new restriction states that an interested party can participate in only one company

that provides digital subscription broadcasting services by the same medium (i.e. TV). The 13

Dr P. Iosifidis, “Regulating digital TV: a case study”, INTERMEDIA March 1999/Volume 27/NO.1

same player can freely participate in another company that provides digital subscription broadcasting services but for a different medium (i.e. Radio).

Having outlined the content of the new regulation that was enforced in autumn 1998, it is worth taking a look at the side effects that this new law created in the market. The prospects of DTV in Greece required three necessary conditions.

The first and very essential condition was to achieve a well planned transition form analogue to digital. The issues that had to be addressed were a) the efficient and fair distribution of digital licences, b) the need for compatible standards (with other worldwide DTV providers), c) the obligation to continue analogue transmission. The government was successful in all the three of them as they managed to introduce this legislation that accomplished the initial “dual objective: promote competition and safeguard public interest”15.

The second condition was the compatibility and the manufacturing of the set-top boxes (DTV box receiver). Manufacturing of these boxes could not be let to one Electronics manufacturer. This would give the opportunity to Greek and foreign consumer electronics manufacturers to produce and retail a series of digital household reception equipment. It was important however that these appliances operated under a set of similar platforms and standards, which minimised the prospect of facing compatibility issues.

Dr P. Iosifidis, “Regulating digital TV: a case study”, INTERMEDIA March 1999/Volume 27/NO.1

The third and final condition expressed the agony of the investors, whether the local markets demand would be high enough to secure a reasonable return in their investment.

Considering that this new DTV Greek market should be similar to other European (EU) markets was a fair assumption at the time, and the players wishing to enter the market first would probably gain and sustain a competitive advantage. Although it was too early to decide whether DTV services would pick up quickly, there were indications that the climate was positive and the demand for new services would inevitably increase. Furthermore, NetMed Hellas, the sole provider of analogue pay-TV in Greece, was already experiencing 300,000 subscribers. Further statistical evidence that was promising was that Internet usage at the time was also experiencing an upward trend, which complied with the rising demand of the Greek consumers for innovations and new services. Thus the conditions of the market seemed favourable enough for potential investors.

The problem was that the programming of DTV service would need to capture the attention of viewers and lure them to switch from analogue to digital. On the other hand, it would not be easy to identify and establish the changing target markets.

Nevertheless, consumers living in rural areas as well as the Greek Islands would indeed have the incentive to use such service, because of their inability to access free terrestrial channels that were available only in the metropolitan areas. Their incentive though was threatened by two (2) parameters: a) People living up country are not normally exposed to external influences and it is more difficult for them to escape from their norms or change

their habits, b) Their spending power is limited as compared to consumers living in urban societies (mainly Athens and Thessaloniki), thus very often they cannot have the benefit of latest technology developments and eventually have access to free terrestrial channels.

Concluding all the above, the future looked prominent at the time and it seemed that Greece would follow its European predecessors and join them in advanced levels in the field of information technology.

The Early Years

As mentioned before, the sole Pat-TV operator, Nethold Multichoise Hellas, had started operating in the market since 1994 and offering 3 analogue terrestrial channels. By 1999 the number of subscribers was approximately 300,000 which corresponded to a 9% household penetration. These numbers looked very optimistic for Multichoise, and allowed plans for similar success when introducing the first satellite Pay-TV service. Nevertheless, in July 1999 Multichoise established a venture with NOVA TV and by December that year they acquired the licence to broadcast digital satellite Pay-TV services.

The NOVA group had been ready to launch the service almost one year ago but as explained again they had to decelerate their launching for at least one year before a decent legislation was in place. Hence it was not until December 1999 that NOVA Company was granted the official licence to broadcast Digital TV channels on a subscription basis. The inexistence of Cable TV due to the lack of infrastructure had halted back any development.

As a consequence, any attempt for Pay-TV was solely depended on Digital Satellite services. Hence NOVA TV would inevitably become the market leader and possibly the sole provider of this kind of service.

When the NOVA service was introduced in late 1999 most of consumers initially believed that a substantial economic burden would be required in order enjoy the service, especially for the purchase of the equipment. The cost to buy and install the satellite antenna («dish») combined with the associated set-top box to access Nova was estimated at €600.00 (200,000 GDR at the time) whilst the monthly subscription fees would range at around €45.00 (15,000 GDR). At that time, NOVA TV had made it clear that it would not subsidise customers´ equipment or offer rental. Thus the market growth rate was uncertain.

From NOVA’s perspective, the company had already installed the digital platform and the ground transmission system, and had leased two transponders in satellites Hot Bird 2 and Hot Bird 3 (covering the entire Europe and the Mediterranean Basin). This technological infrastructure was capable to offering to its Greek subscribers initially up to 16 channels, with the perspective to reach 92 channels as well as internet access in the near future.

Initially the service included the full range of Greek channels, the 3 popular channels brought on from the terrestrial service, as well as additional channels, mainly from European productions all subtitled or translated into Greek. In its first stages, the service would not include interactive and Pay-per-View services.

As it was becoming clear that the Greek DTV market was about to experience a monopoly, in 2000 the National Radio-Television Council granted a second licence for a new DST provider, a company called ALPHA SYNTHESIS DIGITAL S.A. The government thought that the second operator would put a halt to NOVA’s monopoly and thus would generate a healthier environment in the market.

In the same way as NOVA, ADS hoped to attract customers by covering the most important athletic events. For this purpose they tried to control, successfully to some extend, the broadcasting rights of the Greek national football league. The technique is very common amongst Pay-TV providers as it is a given that popular sporting events attract viewers and always accelerate the tendency for a quick switch over to pay-TV.

However the broadcasting rights of highly popular sporting events have experienced tremendous increases in budget requirements during the last years, and still continue to do so. Hence when ADS decided to enter the market, a major investment fund was demanded in order to acquire the rights. The company paid €72m for the exclusive rights of the home matches for 10 out of the 16 football clubs of the premier league for a 2 years period. The cost of the rights was enormous for the Greek standards, especially considering that NetMed (NOVA) had purchased the same rights for €44m in 1996 for a 5 year period.

An additional hold back was that each customer wishing to view ADS had to purchase the dish and set-top box at a cost of €450.00 and the monthly subscription fee was set at

€50.00. This was en especially negative factor on which one could add the limited ability of Greek producers to offer a great number of high-quality domestic programmes. ADS had hoped that within the first 2 years it would have been able to acquire 200,000 – 300,000 subscribers; nevertheless, the offering of sports, movies and children’s programming was not enough to convince the Greeks to subscribe. Finally in September 2002 after having operated for less than 2 years ADS eventually collapsed leaving NOVA as the undisputable winner and many football clubs struggling with serious financial problems.

After the collapse of ADS, NOVA acquired most of the equipment as well as the 40,000 of its customers. Being the sole players in the market place they were able to renegotiate the broadcasting deals with the football clubs and conclude agreements at lower prices. The take over by NOVA meant that for the time they would be the only DST platform providers that could survive in the market.

For a while it seemed that NOVA would operate with no competition whatsoever; unluckily for them this situation didn’t last for long, since ERT Digital made its debut as the first DTT provider to break NOVA’s monopoly in January 2006.

DTT offered by ERT Digital

ERT Digital is a subsidiary company of ERT, the public broadcaster in Greece. As Greece is scheduled to switch-off its analogue terrestrial frequencies by 2012 and make its swap to digital, the government has to come up with a solution in order to retain its penetration as TV provider with a DTV platform. As DCT is virtually non-existent in the country and with only one DST provider still in operation, the solution was to utilise the DTT technology for a quick spread of the DTV concept.

With three new pilot programmes, ERT enters the digital age. The public broadcaster, a pioneer in new technologies is ready to respond to the big challenges of TV industry and adopt most of the changes that are imposed by digital technology. With a new product and a new programme range, ERT is ready to fight for its share in the harsh DTV scenery, hoping that they will soon be able to meet the standards of the Greek viewer.

The three pilot channels will be funded by ERT’s budget and the reception of the digital signal will be free. The new programs will not air commercials and adverts and their programme will differ from the 3 existing public channels (ERT-1, NET and ERT-3). It is worth to take a closer look at the three new pilot channels.

‘Prisma +’ is a pilot program especially designed for people with special hearing, sight and movement disorders. The target is to manage to fulfil their needs in the areas of

entertainment and awareness (special news bulletins) as well as areas of general interest. It is the first time that this sort of programming for people with special needs will appear on any type of Greek TV during its history. Due to the lack of infrastructure, ERT has decided to assign the production of the specific programme to a specialised private company under its supervision.

‘Cine +’ is a pilot program for entertainment, which will broadcast films, documentaries and TV series; it will also include certain program zones specialised for children.

‘Sport +’ is a pilot programme for the broadcasting of sports that are not amongst the most popular to the Greek viewers. It will also broadcast scientific and music news and programmes and its approach will be informative, using new aesthetics and style.

The broadcasting of these new pilot programs is due to commence in January 2006 and will be available only in the region of Attica (Athens Metropolitan Area). It is estimated that by March 2006, at least 65% of Greek TV households will be able to freely receive the digital signal from 5 transmitters, which will cover the areas of Attica, Thessalonica and Thessaly. In order to receive the signal, a set-top box is required that can be purchased for as little as €60.00 (there will be no subscription fee). Of course set-top boxes can cost more, depending on the services they provide. It has been announced that ERT will initially give out 600 set-top boxes to families with disability for experimental purposes.

DTT provides ERT with a very important challenge, as it will bring Greece on similar terms with its European counterparts. Other than the image and sound clarity that DTV provides its users, the utilisation of other services will bring viewers closer to the information age and eventually is expected to improve their everyday lives. Once the service overcomes its pilot stage, the three digital channels will broadcast 24 hours a day and at some stage viewers will have the opportunity to tailor the program according to their preferences.

ERT Digital brings a certain degree of optimism concerning the future of DTV in the Greek market. NOVAâ&#x20AC;&#x2122;s monopoly seems to disappear and in reality this could eventually mean that before too long they will be forced to offer their services at much lower prices if they want to stay in business.

Greece is a small country with no more than 3m TV households, so the fact that DTV has already established some firmness in the market can be considered a success. The booming launching of Pay-TV and the progress made by NetMed, showed that there is potential even in smaller DTV markets. NOVA has managed to survive many hardships and proves to be strong and present in the new era.

With the introduction of ERT Digital the future for DTV in Greece does not look all bad. It is personally believed that Greece will have a successful switch over to digital within the agreed time frame. It is up to the DTV companies now to become more aggressive and competitive by informing their clientele about the advantages of DTV.

In the following chapter we will try to give an insight into the service of NOVA and to critically review and analyse the recent years that a) led the company to its current position and b) create great opportunities and optimistic prospects for the future.

NOVA TV

Having researched into the Greek DTV market in the previous chapters, it is necessary to take a closer look at the sole (so far) DTV provider in the Greek market in order to understand its key success factors. This review of the service that NOVA offers will investigate in more detail the company and its operations as well as will examine the programmes that NOVA makes available to its subscribers.

The brand name of NOVA consists of only a name and no actual company is named after it. Thus NOVA is the brand of the service that provides viewers with satellite Digital TV. Under this brand name a series of companies have merged managing to create a unique service for the Greek Pay-TV market. It is worthwhile to take a look at the companyâ&#x20AC;&#x2122;s structure before beginning to investigate the service.

NOVA is a service owned by the NetMed Group. Most of the funding behind NOVA comes from the Dutch company Myriad International Holding (MIH). MIH holds the 84.6% of NetMed Group shares. The NetMed Group is the dominant component of MIH that operates in the Mediterranean region and more specifically in two countries, Cyprus (since 1993) and Greece (since 1994). The NetMed Group â&#x20AC;&#x153;aims to continue to harvest future business opportunities by focusing on providing quality content. That

includes delivering the best entertainment, sports and news channels from around the globe; by implementing cutting-edge technology and fully utilising its Internet services”16.

The NetMed Group is comprised of 7 companies which can be seen below, along with a short description of their jurisdictions. An additional diagram illustrating the company’s structure can be found in APPENDIX 3.

•

NetMed SA - Provides administrative and consulting services to the Group.

•

NetMed Hellas SA - The channel provider.

•

Multichoice Hellas SA - Subscriber management services in Greece and digital platform

management. •

Multichoice Cyprus Limited - Subscriber management services in Cyprus.

•

SYNED SA - A technology company involved mainly in satellite telecommunications

and signal distribution •

M-Web – Develops, accommodates and provides content for web sites.

•

Ad Value - Administers all the advertising and sales processes of the group (on analogue

and digital platforms as well as the Internet). It is worth going into more detail about some of the companies listed above as some hold more importance than others. Multichoise Hellas started its operations in the Greek Pay-TV market in 1994. It was the first company to offer the service of analogue pay-TV to viewers across the country. When it first launched the service in 1994 it offered viewers the opportunity to access 3 private 16

http://www.syned.gr/en/netmed.html

channels broadcasted. The three channels were targeting different market segments of film, sport and kids audiences. At a time when free analogue terrestrial TV in Greece was struggling with low budget programmes, fully cluttered with commercials and declining viewing rates, Multichoise offered an alternative solution to viewers, which started to exclude free channels from their favourite lists. The three channels experienced a growing popularity within the first few years after the launch. Filmnet was a channel devoted to films, as it broadcasted relatively new productions of films on a 24 hour basis. KTV (kids TV) was a channel with 100% kids programs from the early hours of the day until 5pm. Supersport was the channel dedicated to the broadcasting of sport events taking over on a daily basis after 5 pm. In 1996 Multichoise bought the rights to broadcast most of the matches of the Greek football championship. All broadcastings took place from Supersport, allowing Multichoise to build a strong customer base. Multichoise had followed the example set by many European counterparts operating in similar markets. Sport always manages to attract high viewing ratings (think of the Olympic Games or the World Cup in football and the massive attention they receive), so this was a tactic that proved to be essential for the service in order to take off quickly.

By 1998 Multichoise managed to attract as many as 250,000 customers, a figure that represented 7% of TV households. Multichoise success was unquestionable. Not only had it managed to receive recognition and market penetration, but also to establish itself amongst the key players within the short period of 4 year. Having received the success from analogue technology, it was the right time to take the company into the next era by introducing digital technology in Greece for the first time ever. As said no cable infrastructure was existent in Greece and the logical step to move ahead was the implementation of Digital Satellite technology solution. However the new infrastructure required huge investment, which was ultimately covered by the NetMed Group. Along with the contribution of more investors, the first DST service in Greece was born under the name NOVA. NOVA, the first digital platform in Greece started providing officially digital satellite services on 15/12/99. The bouquet initially included the following: â&#x20AC;˘

The popular movie Filmnet (became popular through Multichoise analogue pay-TV)

with the addition of a new channel Filmsat, which broadcasted new releases from abroad. The parent company NETHOLD Multichoise Hellas S.A had managed to sign agreements with the biggest studios in the USA to obtain the rights to broadcast new releases to Greek subscribers.

•

The sports channel Supersport (known from the time of the analogue pay-TV),

broadcasted sport events from Greece and abroad. The programs main attraction was the line coverage of football and basketball matches of the Greek premier leagues. •

The Greek kids channel KTV which was once more adopted from the analogue pay-TV

service. •

The satellite channels: BBC World, Discovery, Animal Planet, Cartoon Network, CNN

etc. Most of the programmes of the above channels were either subtitled or dubbed. It should be noted that even after the introduction of NOVA, the original service of analogue pay-TV from Multichoise kept on its operation and is continuing to do so even now. From the viewers’ point of view, although the new service seemed very appealing, the purchase of additional equipment heavily burdened the Greek consumer, especially in the context of the economic austerity that was present in the Greek economy. The cost for the bouquet offered by NOVA (buying and installing the satellite antenna together with the set-top box) at the time was priced at approximately €600.00. What is more, the monthly subscription was set at €45.00. At the time, NOVA had made it clear that it would not subsidise the customer equipment purchases or offer rentals. This was the main reason that the service experienced a rather slow progress. It is worth mentioning that most of the major Greek terrestrial free to-air-channels were included in NOVA’s bouquet, which also comprised at least 9 radio stations. In addition, NOVA offered a pay-per-view channel. This channel offered 10 movies of the latest

releases per month, on a pay-per-view basis. However, given that the original set-top box could not sustain interactive technology, since customers had to order movies through telephone, the program for pay-per-view did not really work as planned and eventually collapsed. No attempts had been made ever since to bring it on offer again. Since its beginning, NOVA has made gigantic improvements to its service aiming to build a large and solid customer base. By 2005 NOVA had managed to attract as many as 250,000 subscribers, something that really demonstrates that the service has started to be appreciated by Greek viewers. However and in order to achieve such figures, the provider had to greatly enlarge the original bouquet that was offered in 1999. Furthermore, the current bouquet offered by NOVA has achieved significant reductions of the original costs (buying and installing the necessary equipment) to just €149.00 (the same cost was as high as €600.00 in 1999). However the monthly subscription has seen an increase as today the subscription is priced at €55.00 per month (the monthly subscription in 1999 was €45.00). Another technological innovation of the package is the availability of interactive services through the new and improved set-top box. It is worth to take an insight of the programs available within the NOVA bouquet to better understand the service offered. Listed below are the different programs available. These programs are divided into 2 categories, the first category includes the channels produced by NOVA and the second those that are outsourced productions.

The Channels In house productions FILMNET is the absolute film channel and its programme provides exclusive premieres of each year’s blockbusters. Having entered into agreements with seven of the largest Hollywood studios, it is the first one to exclusively ensure each year’s top films of the boxoffice. The channel’s determination to fulfil the needs of the average Greek viewer is also confirmed by the broadcasting of a constantly increasing number of Greek films. On top of the above, its dynamic participation in the co-production of many of those films, has allowed Filmnet to receive high publicity and significant distinctions. Finally every year, the channel gets the exclusive rights for live broadcasting of some of Hollywood’s most spectacular ceremonies like the Oscars, Golden Globes, SAG awards etc. The channel’s renewed program includes the best and most awarded American series and shows in combination with behind the scene footage and backstage news, which are broadcasted for the first time in Greek TV. FILMNET2 is a channel the program of which includes the best of Filmnet’s blockbusters, scheduled on different hours of the day than the ones of Filmnet. The programme of Filmnet2 is characterised by specials as well as selected premiers scheduled once a week. FILMNET3 broadcasts only for 7 hours a day, from 7pm-2am, and its programme includes 2 films daily. What is more, every night the channel will shows the most popular series that have received success abroad. To capture practically all types of audiences, at midnight, the channel’s programme switches to ‘erotica’ for adult viewers.

SUPERSPORT is the first sports channel in the country. A pioneer of its kind, as it was elected the best sports channel in Europe that is enthusiastically viewed by thousands of Greeks. It daily fights for the provision of news and the richest sports events to its subscribers. Supersport broadcasts some of the most interesting matches like: The Greek football cup, The Greek National football league, the Greek national league for basketball, the most popular European teams in the Champions league, coverage of the English premier League, the Italian Campionato, the German Bundesliga, the Spanish Primera Division as well as other football matches from the Latin Americas. Furthermore, it is responsible for broadcasting important sporting events like Wimbledon tennis tournament, ATP Masters series, the NFL and NHL and many others. Meanwhile the channel is trying to embrace more sports from all around the world, while it honours athletes of the most and/or less popular sports, by hosting their activities. Finally, experienced reporters and well established sportscasters are ready for the fastest and most reliable briefing for everything that is taking place in the sports field that could capture the audienceâ&#x20AC;&#x2122;s attention. SUPERSPORT2 is a second sports channel offered by NetMed Hellas, which for 24 hours a day broadcasts sporting events from Greece and the rest of the world. NOVA subscribers can enjoy a range of sports full of action, emotions and drama amongst the most popular of them. More live games are covered in the channel either from domestic or European championships. It also offers exclusive coverage from the Man Utd channel, as well as live horse racing.

SUPERSPORT3 broadcasts between September and May (championships run during this period) and shows mainly live football, basketball, tennis as well as other sports. It mostly broadcasts during the weekend as sports events normally take place on Saturdays and Sundays but also on Champions League nights (Tuesday and Wednesday) increasing subscribers options with more live games. SUPERSPORT 4, 5, 6 offer more sophisticated options, as they are designed to satisfy needs of smaller but more demanding sporting viewers. It broadcasts particular sporting events in a really extensive coverage. Such events are the Rugby World Cup, Cricket, the Snooker Championships, Le Mans 24h. etc. Outsourced Productions domestic or abroad Having covered in detail the full range of NOVAâ&#x20AC;&#x2122;s in-house productions, we will now try to present the large number of outsourced productions either domestic or foreign which is part of the programmes of the service. In the list below, we will try to categorise all channels on offer by NOVA (the * symbol distinguishes the channels produced by NOVA). Sports: Eurosport, Eurosport2, Motors TV Films: MGM, TMC Documentaries: Discovery, Animal Planet, Travel Channel, National Geographic, The History Channel Kids: Jetix, Cartoon Network

Music: MAD TV, MTV, VH1, MAD Music, MEZZO Entertainment: E! Entertainment, Fashion TV, ANT1 Gold News Networks: GBC, CNN, BBC, Bloomberg, TV5, Euronews, CNBC Free-to-air Greek Terrestrial Channels: Parliament, ET1, NET, ET3, ANT1, MEGA, STAR, ALTER, ALPHA, MACEDONIA TV.

In total the entire NOVA bouquet consists of 45 channels offering viewers a large choice of programmes to match their preferences and likes. It is evident that the service is becoming more affordable as it attracts more and more clients: it is personally believed that before too long NOVA will remove any installation costs as well as charges related with the necessary equipment, which are expected to be offered for free. This assumption is based on the comparison of other European DST providers which incur all the relevant to equipment and installation costs. Furthermore, the interactive services offered by NOVA are expected to broaden likewise other European DST networks. We also think that NOVA should re-introduce they payper-view service that failed to succeed during its initial introduction. The upgraded technology allows viewers to access films in a much more efficient way and the availability of films on offer can be extended to a small video club operation. Using an example from NTL (one of UKâ&#x20AC;&#x2122;s DCT networks); they have created pay-perview movie database with as many as 150 films on offer at any time, with just the touch of

a button. This can, to some extend, be compared with an especially convenient video club, where customers have the opportunity to choose any film (each film valued at a different price according to the year of its production) from the comfort of their own home, being able to play, pause and rewind the film for 24 hours once they have made the purchase. NOVA should think about implementing a similar service for Greek viewers. Up until now, NOVA has managed to sustain a monopoly in both DTV and pay-TV market. However, as of Jan 2006 and with the introduction of a new DTT service from ERT Digital, NOVA will no longer have the comfort of a monopoly as they were for such a long time. The competition arising from the new service will benefit consumers and NOVA’s bouquet will have to remain rich in content and attractive to viewers whilst becoming even more competitive in terms of price. NOVA will have to use the experience they have gained over the years and use it to remain market leaders. As any analogue terrestrial frequencies in the Greek market will be switched off by the year 2012, it is expected that all the TV households will have to switch over to digital. It is clear that a race for winning as many subscribers possible by 2012 has already begun. The competition will be tough, as ERT Digital’s package requires viewers to pay only a one-off cost for purchasing a set-top box, with no subscription costs involved. Thus, NOVA will have to convince viewers that only their premium service can justify the monthly subscription, provided that it will stay on reasonable levels. NOVA has managed to overcome competition in the past, when in 2000 ALPHA Digital (ADS) appeared in the Greek market as a second DST provider; although quickly forced to shut down due to NOVA’s dominance. This time, competition form ERT Digital will be

very different and much harder. Not only because the used technology transmits signals terrestrially and evades the need for a dish receiver (as a result initial costs for installing the required equipment to receive a digital signal are substantially lower), but also because ERT Digital is mainly funded by the state broadcasters ERT and will receive full support from the government. NOVA and its service in the Pay-TV area has existed for over a decade now and although the switch over to digital initially created some difficulties it is still going on a steady course for some time now. Of course the times of monopolies have come to an end and it will be interesting to see how NOVA adapts to this new form of competition. The next few years will determine how the service will manage to handle harsh competition.

Conclusions

With the detail analysis of NOVA TV in Greece our research on the project has been concluded. We believe that the reader is now in the position to understand the concept of digital TV, as we tried to give adequate information on DTV, not only as a general concept, but also in the context of the European and Greek frameworks.

DTV is unquestionably the technology and the platform through which all TV broadcasters will be sending their signals in the years to come. A phase-out process of the analogue technology is in progress and it is expected that within the next decade the domination of digital will be beyond any doubt. The research examined the three technologies that dominate the DTV market at the moment which are: Digital Satellite (DST), Digital Cable (DCT) and Digital Terrestrial (DTT). DTV networks around the world employ one of those technologies, which have significantly managed to enhance the benefits of the viewers. Crisp images, improved sound and interactive services are some of the great advantages of the new technology.

Although the digital platform is still running the first stages of its life, there are signs that a fourth technology will be ready to emerge before too long; IPTV (Internet Protocol TV). IPTV is considered as the future of DTV and it is believed that its anticipated massive success will not come from the advantages of some especially advanced new technology, but simply because IPTV will be in the position to provide each and every dwelling with the benefit of Triple Play. Viewers will be able to receive a signal through a broadband

Internet connection, thus on top of TV an Internet portal and a phone line will be available, all in the same package.

DTV is very similar to pay-TV, as the majority of networks require subscription fees. However there is a trend in many of a market to introduce DTT as the replacement of the analogue signal. Viewers can receive a digital signal as long as they are equipped with a digital receiver (set-top box). Thus there is no question on whether DTV will eventually phase out the free-to-air signals. The concept of free TV will not be jeopardised with the switch over to digital.

In North America DTV has managed to penetrate TV households almost completely. Up to now, this was not the case in Europe and this is a conclusion to which we came after having investigated the current situation within Europe. It is faire to say that in terms of household penetration the European continent is lagging behind. Of course the situation varies between the European nations. Unquestionably, the UK has the highest dispersion of digital technology. It is obvious that the degree of DTV spread by country follows the one of economic prosperity. However, as Europe invests towards a better Information Society the implementation of the new technology is predicted to highly improve very shortly. All member states of the European Union have entered a programme that sets a schedule for the digital switch over. By 2012 most of the major countries will shut down their analogue TV frequencies and will enter into a new era.

The digital broadcasting technology that is currently dominating European DTV markets is that of satellite. Cable is the second most popular and terrestrial is the least favoured. All indications show that cable technology will eventually catch up with that of satellite and together they will be the 2 technologies that will prevail. What is more, household penetration for DTV has been experiencing an upward trend ever since it was introduced in 1996. Thus it is believed that the target to improve Europeâ&#x20AC;&#x2122;s position in the â&#x20AC;&#x2DC;Information Societyâ&#x20AC;&#x2122; by switching over to digital will be inevitably accomplished. What is also important for the EU convergence is the need for the implementation of strategies and policies that will be focusing upon nations that have fallen behind in terms of investments in advanced technologies. It is especially vital that all 25 countries of the enlarged EU can reach as early as possible to an acceptable and equivalent level in terms of applying new technologies. For this reason the European programme for achieving the switch over was a major priority, which was addressed in combination with a well-structured plan. According to the plan each nation will have to enforce appropriate legislations on which DTV platforms shall operate upon. The successful enforcement of such legislations also attempts to limit the dominance of exclusive strong players within the markets and will allow the formation of new DTV scenery as well as a smooth transition into it.

Although a digital switch over seems exciting and brings a certain degree of austerity in the way that Europe is looked at, it is important to take into consideration some of the costs that are associated. Viewers across Europe have so far enjoyed the right to watch TV by receiving the analogue signal for free. Of course also digital signals can be received for

free, but it is important to consider the costs that viewers will have to endure in order to purchase the necessary equipment. The burden of these costs though seems to be constantly declining as technologies for receiving digital signals are becoming widely spread. The awareness of European viewers towards this new technology is steadily increasing and with the appropriate support from public authorities as well as private organisations their reliance and confidence towards new digital technologies will further increase.

In this project we also examined the Greek DTV market as a more intergraded part of the study. Greece is a small country with average economic prosperity but striving to keep up with the evolution of the Information Society. It is logical that the infrastructure, which was prerequisite for the staging of the Olympic Games in 2004 helped Greece to close up on other European more technologically advanced countries. The availability of DTV has existed in Greece since 1999 when the service of NOVA TV was firstly introduced to the Greek public. Ever since it has struggled to survive and attract a larger users base. That was achieved despite the fact that the required technological upgrades necessary to receive the digital signal where too expensive for the average Greek consumers.

The digital

transmission in Greece was possible through satellite technology as cable infrastructure is â&#x20AC;&#x2DC;virtually inexistentâ&#x20AC;&#x2122;.

The Greek government should be praised for introducing the appropriate legislation on which DTV platforms could operate at a very early stage (1998). Greece was the second country after the UK to establish such legislation within the EU.

The early years of DTV in Greece were not easy. Although initial statistics had shown a rising demand of Greek consumers towards innovations and new services, however the concept of DTV experienced a relatively slow growth rate, as the overpriced equipment did not appeal to masses. It was only 7 years after its first operation that DTV started to penetrate into more homes than ever before. The key factor that positively contributed to this end was the huge price reduction of the equipment.

This moment, with the introduction of a DTT service on offer as of Jan 2006 the DTV market will stop being a monopoly. The competition is likely to have a very positive impact on consumers as the race between the two DTV service rivals is expected to further reduce the subscription fees. As Greece has scheduled the full switch over to digital by 2012, it is fair to assume that since there are still many viewers at stake, both of the current providers NOVA and ERT Digital will fight hard to get as big chunk of market share as possible.

NOVA is considered to be the more expensive solution, as initial costs for the purchase of the equipment and the monthly subscription charge are not especially low. On the other hand ERT Digital can be viewed with the single purchase of a set top box and no additional costs whatsoever. NOVAâ&#x20AC;&#x2122;s service must clearly make a distinction from ERT Digital by offering viewers a much larger selection of programmes available, something that they have clearly demonstrated since 1999, proving their ability to utilise superior technologies and expanding programme offers.

As we have entered the year 2006, both NOVA and ERT Digital are ready to follow the example of other European DST providers. The situation of DTV in Europe is not very different than the one in Greece. As Greece seems to dynamically position itself into the Information Society and is successfully keeping up with developments, the final outcome of the Greek DTV will beyond any doubt be successful.

References Literature and Articles

• http://www.researchandmarkets.com/reportinfo.asp?report_id=225274&t=o&cat_id=15 • P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing • P.Iosifidis (1998), Development of Digital TV in Europe (Greece), IDATE annual reports • P.Iosifidis (1999), Development of Digital TV in Europe (Greece), IDATE annual reports • P.Iosifidis (2000), Development of Digital TV in Europe (Greece), IDATE annual reports • P.Iosifidis (2000), The “Derby” of sport broadcastings, article from “To Vima” daily national Greek newspaper • P.Iosifidis (2002), Broadcasting Football on DTV: First the UK, now Greece, Intermedia Journal, Vol 30, No 5 • P.Iosifidis (2001), Digital Challenge: the media and democracy, Conference speech held by the University of Athens, Department of Media and Communications • P.Iosifidis (1999), Regulating digital TV: a case study, Intermedia Journal, Vol 27, No 1 • P.Iosifidis (2002), Developments in European Digital Television, Business Briefing, www.wmrc.com/businessbriefing/pdf/broadcast2002/reference/09.pdf • P.Iosifidis (1998), Digital Television in Europe: present and future, Conference presentation in the University of Athens

Websites • http://www.doriforikanea.gr/ (satellite news in Greece) • http://www.hellas-sat.net/index.php?cat=108 (satellite developments in Greece) • http://www.multichoice.gr/eng/ (Multichoise Hellas) • http://www.eett.gr/gr_pages/index2n.htm (National Greek Comity of Telecommunications and Post) • http://www.yme.gr/ (Greek Ministry of Transport and Communication) • http://www.syned.gr/en/netmed.html (SYNED Group) • http://www.ofcom.org.uk/ (Regulator authority for the UK communication Industries) • http://en.wikipedia.org/wiki/Main_Page

APPENDIXES

APPENDIX 1

APPENDIX 2

Availability of Digital Television Platforms Across Europe (End of 2002)

Country Austria Belgium Denmark France Finland Germany Greece Iceland Italy Luxembourg Netherlands Portugal Spain Sweden U.K.

Satellite

Cable

Terrestrial

●

● ● ● ● ● ● ● ● ● ● ● ● ●

● ● ● ● ● ● ● ● ●

● ● ● ●

Source: P.Iosifidis, J.Steemers, M.Wheeler, (2005), European Television Industries, bfi publishing p.109

Appendix 3

NOVA STRUCTURE