It's time for a new TV deal

‘By all measures, TV was a superb technology for its time,’ wrote American George Gilder in 1990. ‘Indeed, its presence and properties defined the time. But now its time is over.’

Eight years later, Australia’s communications minister Richard Alston thought otherwise. He announced a new kind of TV—Digital TV. It would offer ‘a quantum leap in television technology … providing the capacity for the humble TV set to become a central information point in every home’. Metropolitan services began on 1 January 2001.

When Bills proposing changes to Alston’s regime were introduced a fortnight ago, Senators were told ‘Conversion to digital is the most fundamental change in broadcasting since the introduction of television itself 50 years ago’.

So is this medium dead or alive? Clearly very much alive, if you count the roughly three hours a day the average Australian spends watching it.

But if you look at the take-up of Alston’s new kind of TV, you might think George Gilder was closer to the mark. In March, five years after its introduction, less than one in five Australian households had bought a set-top box to receive free-to-air digital TV, although there are many models now available for under $200.

It’s not that they aren’t interested in using their TV’s for digital things. Around a quarter now get pay TV, and most of those are digital subscribers, though it is much more expensive than free-to-air digital TV. The $200 that comfortably buys a set-top box and ongoing access to all free-to-air digital services transmitted in an area, gets only a few months of Foxtel’s or Austar’s digital basic packages.

Three-quarters of households have got DVD players, also readily available for less than $200, and happily spend more money buying or renting discs.

That’s the kind of take-up rate needed for digital TV if the Government was to meet its original timetable for shutting down the analogue TV transmissions we’ve been watching for 50 years. But we’re nowhere near it.

What went wrong? First, some underestimated the strength of free-to-air television, as a leisure activity and a business, in a country where three commercial competitors and two public broadcasters provided a wider range of services than many countries enjoyed before multi-channel pay TV arrived.

Second, the government placed too many restrictions on what those allocated spectrum for digital TV could do with it, and didn’t do enough to ensure people other than incumbent broadcasters got the chance to offer new services.

Third, consumers were not as easily seduced as policy-makers by the promise of a Digital Revolution. They sized up the options and their relative prices and made sensible choices.

Free-to-air digital TV, Australian-style, has been a turkey. A bit of high definition programming, though rarely in sport; an extra TV channel each from the ABC and SBS, put together on shoestrings; some radio-on-your-TV; limited interactivity. In Melbourne, there is still no single on-screen program guide covering all networks—the basic building block of any sophisticated TV system. And if you do move to digital, you lose access to the community channel, Channel 31, because it’s only transmitted in analogue.

The Bills now before the Senate propose changes. Some will help—removing restrictions on the programs the ABC and SBS can carry on their extra channels; allowing commercial networks to run separate programs in high definition and standard definition from the beginning of next year, and to introduce another channel from 2009.

More changes, to be included in further legislation, are designed to get to air two wholly new services. One will offer ‘datacasting and narrowcasting’ services to households, although we still don’t know exactly what these will include. The other will transmit mobile TV to people, though new handsets will be required to receive both the video content already available on 3G phones, and the new mobile TV services, which will use different technology.

There is still not enough in this that allows the potential of digital TV to be fully explored. No more broadcast TV to households, just datacast and narrowcast. No major live sport on the new multi-channels. The government is still trying to micro-manage the use of uncertain technology.

But it is not nearly so careful about who gets to use it. It is allowing the powerful players who are already well-positioned in the multi-channel future, including Foxtel and its shareholders, Telstra, News Limited and PBL (owners of the Nine Network), to acquire more spectrum. At the same time, it is proposing liberalisation of ownership rules, whose impact is certain—more consolidated power in an already concentrated media landscape.

The Government is being too radical on ownership but too cautious on digital TV. It is time to stop tip-toeing around TV’s future, crafting complex new deals between media players, the logic and impact of which will be lost on anyone with a lazy few dollars to spend at Harvey Norman or Clive Peeters.