Paul Norris: Digital revolution a long time coming

Opinion

We are a digitally deprived nation. We don't have high-definition television. The only digital TV channels are those on Sky, a service you have to pay for.

Interactivity is at a primitive stage. We don't have interactive commercials and the only video on demand consists of short news clips. We don't have any digital video recorders that can pause live programmes, learn our viewing habits and record 60 hours of favourite shows. Only 3 per cent of us have broadband high-speed internet and the service is often anything but high-speed.

All this is very Third World compared with the countries leading the digital revolution. In the United States, all the networks are transmitting prime-time programmes in high definition. Sales of high-definition sets and digital video recorders are taking off. Cable conglomerates vie with phone companies to bundle services offering television, internet and hundreds of programmes and movies on demand.

In Britain, viewers can get more than 100 channels on Freesat, free-to-air with no subscription. During the Olympics, digital viewers could access five different feeds from the venues, not to mention pages of information and statistics. Many programmes have an interactive element, and there are games and opportunities to bet.

The BBC is offering programmes from its enormous archive, which viewers can download and put to any non-commercial use.

Meanwhile, New Zealand wallows in a pervasive air of paralysis.

Almost three years ago, the Government invited the broadcasting industry to form a group and come up with a plan to make the transition from analogue to digital. But the broadcasters cannot agree among themselves, and instead engage in a ritual dance with Government officials about access to new frequencies and who should pay. Sky continues to attract new subscribers and moves into profit after a decade of losses.

Television New Zealand, as the public broadcaster, accepts a responsibility to take the initiative and lead the transition. It also wants to establish a rival platform to that of Sky.

It tried to launch a digital service as long ago as 1999, in a joint venture with a British cable company, but the newly elected Labour-led Government took fright at the amount of capital required and sent TVNZ packing.

TVNZ's next plan was a satellite deal with TelstraSaturn (as it then was), under which it would offer free-to-air channels on the satellite and TelstraSaturn would develop a pay TV service. But this plan collapsed in 2001 when Saturn's parent in Australia got into financial difficulties.

For the past year or so, TVNZ has been working towards the launch of a Freesat service, offering all the free-to-air channels (TVOne, TV2, TV3, C4, Prime and Maori TV), together with some new channels to tempt viewers (an archives channel perhaps, or a news channel or the best of the regionals).

TVNZ already has its own channels up on its own transponder on the Optus satellite (you can see them if you go to the trouble of finding a decoder or set-top-box). It has been negotiating with set-top-box manufacturers to supply hundreds of thousands of suitable boxes. It has recruited a digital programme manager from Europe.

It has also been in tortuous discussion with CanWest (the owner of TV3 and C4) and Prime, trying to persuade them that the TVNZ plan is really an initiative on behalf of all broadcasters and that they should put their channels up on this free-to-air satellite platform.

But this latest initiative seems just as doomed as the previous attempts. Neither CanWest nor Prime will agree to the plan; they are apparently content with present arrangements, with their channels available on Sky.

Because these channels are encrypted, and can be seen only by Sky subscribers, the channel owners do not pay Sky for carriage. If CanWest and Prime went unencrypted on the TVNZ satellite, they would have to pay.

Enter the Government, notably hands-off until this point but now alert to the fact that TVNZ's satellite initiative could be bad news for BCL, the transmission company that was formerly part of TVNZ but is now a self-standing state-owned enterprise expected to make profits for the Treasury.

BCL has been arguing for an alternative form of digital transmission, DTT or digital terrestrial, which is basically a digital form of the over-the-air transmission we have now, received by a UHF aerial and a set-top-box.

What is at stake here is the business of building the new transmission network, worth an estimated $30 million to BCL. If TVNZ's Freesat took off, there could be no need for DTT at all.

The Government has recently indicated that it does not support TVNZ's satellite initiative. TVNZ is isolated, with support from neither its shareholder nor its industry partners, and BCL is emerging as the victor at this stage. The focus of the digital strategy, such as it is, will turn to a DTT solution rather than a satellite solution.

But that is not the end of this tangled tale. As anyone living in a remote area knows, New Zealand's shape and terrain make over-the-air television transmission particularly challenging. The DTT plan put forward by BCL will reach only 85 per cent of the population. It will not extend to those in the more remote areas beyond the reach of BCL's 22 main sites.

So a solution will have to be found for the last 15 per cent of viewers. Once the digital transmission is complete, the Government intends to switch off our present analogue system and sell the frequencies for other purposes. It would be unthinkable for some 15 per cent of viewers to have no television service at all.

Satellite is the obvious answer for all remote areas. There will have to be some form of Freesat to complement DTT and fill in all those areas DTT cannot reach. But any satellite offering will cover the whole country in any event, with the possibility of far more channels than DTT can ever provide. Which raises the question - if we must have satellite, why is there any need for the DTT option at all? Is it not simply an unnecessary investment?

There is the further question of whose Freesat - TVNZ or Sky's? Sky could easily mount a Freesat offering of, say, 30 channels, potentially more attractive than any DTT package. In Britain, Sky uses its Freesat offering of 100 channels to lure viewers into its full subscription service.

But it may not be politically acceptable to have the only digital platform in Sky's hands. So we could be back to where this story really began - the saga of the TVNZ satellite. Or if this, too, is unacceptable, perhaps BCL or a consortium would have to manage the platform.
Where to from here? Overseas experience is that two factors are vital for digital to take hold. The Government must lead and set the strategy, and there must be new services to attract viewers. At least the threat to BCL seems to have stirred the Government into action, but the prospect of new services seems as distant as ever.

The balance of power is surely reflected in the fact that the next breakthrough will be the launch of the first hard-disc digital video recorder in New Zealand later this year; just another coup from Sky.

* Paul Norris is the head of Christchurch Polytechnic's broadcasting school and co-author of the recent report Public Broadcasting in the Digital Age: Issues for New Zealand.