Part 2: EUROPEAN DIGITAL TV – EXPLAINING FRAGMENTATION


Part Two:

In a complex “disruptive technology world” there is an exacerbation of many issues some relevant in business terms starting from choice of technology, which supplier, what business model and how to sustain growth.  Companies and Countries are adding to their own business issues  as they put up the façade of supporting Standardisation work whilst they are all vying to sell proprietary product to the Digital TV industry and thus adding to the problem of fragmentation.  Everyone is trying to become the next “Microsoft” by ensuring that they have a foothold in the market with some sort of unique offering that ties them in to the customer and that will make them margin high, cash positive, revenue strong.   That is certainly what my CFO wants and what most investors want to hear!

So as the DTT Broadcasters hesitate to step up to any true Multi-Media offering the CE manufacturers who were once beholding to the Broadcasters see themselves in 2009/2010 in a dominant market position.  Why is that?  Broadband Speed!  Whilst the Broadcasters hesitate to offer interactive & hybrid systems in order to grow or even just to retain market share they are faced with CE Manufacturers “going it alone” over the Internet.  DTT Broadcasters hear from all and sundry that the TV world is fully moving to Internet access viewing and that they should all go “via the wire” as well as the aerial:  due to old business models at the TV level they should in effect allow CE manufacturers to put out their Broadcaster Content on Connected TV portals into the retail market.  The CE manufacturers are telling the Broadcasters that they will “lose out” if they do not put their content onto those Connected TV portals because nobody watches linear TV anymore!  The Broadcasters do not know if this “On-Line TV” is going to be a success and so some have, and some have not made the step – more fragmentation.  CE manufacturers also offer up their own access to VOD catalogues and are becoming Internet Broadcasters.  The Broadcasters slow to react are worried about take-up of Digital TV are “taken in” by this marketing ploy, are disrupted by the hype.    Of course marketers at the CE manufacturers have understood the market dynamics with all its disruption.  Their standard “selling TV Sets business” can no longer define a “Pan European TV” to obtain economies of scale.  Each country requires different transmission systems or a mix of two or more (analogue, SD, HD & 3D), middleware is different, CA is different and as in Italy different per Broadcaster.  So it is clear that they will either move away from, or go back to being “dumb terminal vendors” and the latter is not in their mindset.  CE manufacturers want to dominate today, believing that they dictate the market direction!  So Content and Portals over the Internet seems like an interesting business model for them to follow and that is where they are heading.  The relevant question here perhaps is this:  In Digital Terrestrial Television What or Who is the real “Market Driver”, is it the DTT Broadcaster who buys and produces the Content or the Consumer Electronics Equipment TV Manufacturer who has the consumers eyeballs?  It is not really the Transmission System or Software but that plays a big part?   It is most certainly not the Consumer who has to follow this ever changing and overly complex scenario.

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