From Colin Mann in London

The UK's trading watchdog, the Office of Fair Trading has referred the proposed video on demand (VOD) joint venture between BBC Worldwide Limited, ITV plc and Channel 4 – also known as Project ‘Kangaroo’ – to the Competition Commission (CC) for further inquiry. The CC now has 24 weeks to consider the issues, and collect evidence on the key issues.

The proposed JV is intended to combine the parties’ retail activities, creating a common website of UK TV content accessible on demand to consumers. It will also bring together the parties’ wholesale activities, which consist of syndicating the content rights to third parties that offer VOD services.

According to the OFT, concerns arise because the concentration of important and competing libraries of UK TV programming included in the project may give distorting market power to the joint venture, enabling it to charge higher prices in syndicating content to wholesale customers, and potentially raise download-to-rent (DTR) and download-to-own (DTO) prices paid by VOD consumers, or limit the range of ways in which viewers can watch the parties’ content on demand.

The OFT said it had “carefully considered all evidence as to whether the joint venture would face enough competition from other sources,” such as one or more ways of watching the same UK TV content elsewhere (say, by video recording off the TV, or DVD rental or purchase), watching competing content (such as hit U.S. TV series, Hollywood and other films), or a combination of watching different content in a different way.

In order to try and avoid the reference, the parties did offer remedies, but the OFT did not consider their scope sufficient to resolve its concerns in a clear-cut fashion.

In response, the project partners said they were “naturally disappointed by the decision from the OFT and are frustrated that it will delay the launch of Kangaroo, however all parties remain committed to what the venture offers.” They remained confident that when properly subject to more detailed scrutiny by the Competition Commission, it would conclude that the joint venture will provide wider choice for consumers and be seen as a pro-competitive force in the market place. “Our aspiration is that Kangaroo will offer a wealth of British content and provide an example of UK innovation and collaboration for the benefit of consumers and advertisers alike,” they claimed.

ITV said the referral to the UK Competition Commission of a new video-on-demand service was likely lead to a delay in its launch. “The reference process is likely to take several months and the service is therefore unlikely to launch on the previously anticipated timetable.”

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Permira to take NDS private

In a surprise move News Corp has made a deal to become the minority shareholder in its conditional access subsidiary NDS. Two newcos backed by private equity house Permira will take the business private.

The plan is the Permira newcos will own 51 per cent while News will keep 49 per cent. The deal has been struck at a 21 per cent premium to the companies Nasdaq share price. News Corp had owned 72 per cent, with the balance in float, but the ownership structure made it difficult for News to access the cash NDS generates – it presently has nearly $700 million cash at hand.

The deal has been negotiated with News Corp and NDS management, and will now go before a special independent committee of the NDS board. News Corp.’s take from the deal will be $1.7 billion in cash and debt, the company said.

News Corp. said the deal represents an “attractive alternative” for public shareholders to cash out of an “illiquid investment at an attractive price.”

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Sky questions BBC programme bids

BSkyB has said that the BBC should not be allowed to bid for Hollywood films or US TV series and that Channel 4’s claim of a potential £150 million (E187.5m) funding gap is “open to challenge”, in its submission to Ofcom’s second review of public service broadcasting.

BSkyB said the BBC was obliged to focus on areas the market was not serving well, “where there is a real deficit in provision”. “The BBC should step back entirely from other areas. In particular, there is no justification for the BBC using public money to outbid commercial broadcasters for Hollywood films and US series,” the company added.

BSkyB said the fact the BBC was spending £100m a year on acquired programming and “appears to be increasingly aggressive in this area” is a “clear signal that its existing remit and governance structure is fundamentally flawed”.

The satellite broadcaster is also sceptical of Channel 4’s claim that it cannot continue to deliver its PSB obligations without the equivalent of as much as £150m a year in support. “This proposition is open to challenge. After all, its revenues have continued to grow overall, by nearly 25 per cent over the past four years, even as competition has increased,” Sky said.

The satellite broadcaster’s argument is that there is “no evidence of an impending crisis” in the provision of UK public service broadcasting and that the debate has “consistently failed” to take into account the role of multichannel TV and the Internet in providing high-quality content.

Sky also said the assumption that ITV and Five should be able to drop their public service broadcasting obligations as the value of analogue spectrum subsidies dwindle, needs to be looked at more closely.

“After all, spectrum used for terrestrial television broadcasting, including gifted digital terrestrial television [Freeview] capacity, is scare and remains highly valuable, as Ofcom points out frequently,” the satellite broadcaster said in its submission.

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Portugal Telecom tops DTT tender

From Branislav Pekic in Rome

Portugal Telecom has been placed first by the commission that evaluated the bids for the DTT platform for pay-TV channels.

Portuguese telecommunications sector regulator Anacom announced on June 27th that Portugal Telecom obtained 85 out of a total of 100 points, while Sweden's Airplus TV was awarded 57 points. The technical and financial criteria weighed in with 60 per cent, while the TV offer corresponded to 40 per cent.

The two competitors now have 10 working days to respond to these findings. Only after the consultation period is over will a final decision be reached, although in the majority of the public telecommunications tenders in Portugal, no changes resulted.

In its bid, Portugal Telecom promised national coverage in 18 months, the commercial launch of the service in April 2009, a pay-TV offer that includes new thematic channels, VOD and PPV. The operator plans to subsidise the acquisition of set-top boxes for low-income families, citizens with special needs and charities.

The result of the tender for the free-to-air DTT multiplex will be announced on July 24th but no surprises are expected, as Portugal Telecom is the sole bidder.

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Record-breaking TV deal for SPL

The Scottish Premiere League has agreed a landmark four year deal with Setanta Sports for live domestic broadcasting rights.The £125 million (E166m) deal will extend the current partnership from the start of season 2010/11 through to the end of season 2013/14. 60 games will be covered live each season for broadcast across the UK and Ireland.

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Court upholds FCC on cable rules

A federal appeals court has upheld the Federal Communications Commission’s authority to make rules intended to increase cable television competition in the US.

Local governments had filed legal challenges to agency rules the FCC said would speed the approval process for new competitors, cap fees paid by new entrants to local governments, and ease requirements that competitors build systems that reach every home. The lawsuits said the FCC overstepped its authority.

A three-judge panel ruled unanimously for the FCC. It said the agency showed the local franchising process was ”unreasonably impeding competitive entry into the cable television market.”

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In-Flight DBS revenue $900m+ by 2012

The market for in-flight live direct broadcast video revenue is projected to grow to $913 million in 2012, according to research by MultiMedia Intelligence. With revenue of $87 million in 2007, live in-flight video promises impressive growth.

“The current environment of increasing fuel prices and downward pressure on fares has been painful to the airline industry,” according to Amy Cravens, contributing analyst with MultiMedia Intelligence. “The result has been that airlines have been aggressively pursuing new revenue streams. In-flight live direct video broadcast services are ‘a no-brainer,’ offering a value service to passengers and new revenue to the P&L.”

Even with the current constraints in the airline industry, usage revenues are still anticipated to nearly double in 2009. The majority of video deployments are with a single player, LiveTV, with Panasonic being their largest competitor.

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OpenV obtains licence

OpenV, China’s largest Chinese-language Internet TV and Video content provider has obtained from the State Administration of Radio, Film and Television a Licence for Publishing Online Audio-Visual Programmes. Industry experts believe that the issuance of the Video License will accelerate standardisation of the online video industry while promoting market growth.

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Sigma for Adcom STBs

Sigma Designs, a provider of digital media processing and wireless system-on-chip solutions, and Advanced Communications (Adcom), a Japanese communications technology company, have confirmed that Sigma’s integrated SMP8654 media processors will be used to power Advanced Communications’ IPv6 STBs currently being deployed by throughout Japan.

The companies have also entered into a collaborative relationship to develop IPTV set-top boxes for the Japanese market based on Sigma’s SMP8654 media processor and Adcom’s iSense IPTV software platform solution.

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Two Way and Virgin gaming channel

Virgin Media Television has agreed a deal with Alderney-based betting specialist, Two Way Gaming, which will see the broadcaster launch a sister channel to the long-established Challenge. The new channel, Challenge Jackpot will be broadcast on Virgin Media's UK cable network. The channel's output post-midnight will also be broadcast on Virgin1 and Bravo2, extending its reach to Freeview and satellite viewers. Challenge Jackpot will be a gaming channel allowing viewers to watch or play along with a variety of casino games.

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Oki audience rating

Oki Electric Industry has developed the “Audience Rating Information System” for IPTV, which will be offered to the Japanese market. The system collects viewership data to enable broadcasting companies to improve their services.

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Widevine secures Viginta’s DTT video service

Widevine Technologies has announced that leading Lithuanian multichannel television, telephone and Internet service provider Viginta has selected Widevine Cypher to secure content delivered over DTT, hybrid QAM (cable) and IPTV deployments. This marks the first time downloadable conditional access and DRM has been implemented in a one way DTT network, drastically reducing the time and cost associated with maintaining consumer device security.

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Monday 30th June

News Corp: European pay-TV spree?

BBC web video device?

BBC DVB-T2 tests prepare for HD on Freeview

25 bids presented on Italian DTT tender

IPTV providers must push PPV and VOD

Tiscali portal launches EPG

FLO approves conditional access standard

Demand for new content driving growth of African pay-TV

NBC streaming data for advertisers

Teleste receives Digicable order

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News Corp: European pay-TV spree?

James Murdoch, head of News Corp TV in Europe, is said to be considering bids that would bring Premiere of Germany and Digital+ of Spain into the group's European pay-TV family. The two satellite broadcasters together would cost more than E4 billion analysts say.

Although News Corp is already a shareholder in Premiere and has been mentioned in connection with Digital+, a bid for both is a stretch and the story in the WSJ had no named sources, however the WSJ is now owned by News Corp, so one can assume its sources are well informed. The story will certainly be useful in testing market and regulatory reaction in the countries concerned.

In Germany News Corp already owns 25.01 per cent of Premiere and is looking to install its management. In Spain, media conglomerate Prisa is considering selling its Digital+ unit. The sale process is likely to begin by the end of July. Other possible bidders include Vivendi, Spanish cableco ONO, and Telefónica.

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BBC web video device?

The BBC is developing plans to bring its web video iPlayer catch-up service to television screens, in a move that would take its online ambitions to a new level and pit the corporation against technology groups such as Apple.

Mark Thompson, BBC director-general, told the FT it was “looking very hard at” forming an alliance to introduce “a very simple standard” for getting online video from computer screens on to standard televisions.

Similar devices such as Apple TV have been on sale for some time but have not gained a mass following. “There are many things out there in the market, but what we haven't yet got is a simple standard, to mean that you can get services like iPlayer and Kangaroo,” said Thompson.

As the BBC has demonstrated with Freeview and iPlayer, its universal reach and unmatched promotional power can take products that have been peripheral (like On Digital or numerous internet video players) and make them universal.

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BBC DVB-T2 tests prepare for HD on Freeview

The BBC has begun DVB-T2 test transmissions today, from the Guildford transmitter southwest of London, in preparation for HD on Freeview. The transmission facilities are provided by National Grid Wireless and Arqiva as part of their support for the DVB standardisation process and the UK project for the launch of DVB-T2 services.

This follows the approval by the DVB Project of the DVB-T2 specification and this will be the first time signals compliant with the DVB-T2 specification will be broadcast. DVB-T2 is the next generation digital terrestrial transmission standard for new HDTV services on Freeview. Currently, Freeview services use the DVB-T standard which was defined more than 10 years ago. DVB-T2 can provide significantly more capacity and this will be essential for HDTV services to be launched on Freeview, currently planned for the end of 2009. The DVB forecasts the use of DVB-T2 will result in capacity gains of up to 45 per cent. Ofcom is counting on the extra bandwidth released by development of the standard to put its HD plans into action.

Justin Mitchell, leader of the DVB-T2 modem development team at the BBC, said: “We are delighted that our team in collaboration with our partners has been able to deliver such a key piece of technology in such a short timescale. This is a big step forward in enabling the introduction of full HD terrestrial on Freeview by the end of 2009.”.

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25 bids presented on Italian DTT tender

From Branislav Pekic in Rome

A total of 25 bids have been submitted for as many TV channels on the tender organized by Italian telecommunications regulator (AgCom) to award 40 per cent of capacity on five Italian digital terrestrial TV multiplexes.

The bids were submitted by 17 companies, and a special commission will now evaluate the bids before announcing the winners on August 23. A total of 12 TV channels will be awarded on one multiplex belonging to state broadcaster RAI and two multiplexes each operated by commercial broadcasters Mediaset and Telecom Italia Broadcasting.

The list of bidders reads like a who's who in broadcasting. The Disney group has requested one channel, while Jetix Europe, in which it has a 75.7 per cent stake, has requested another. Turner, ESPN and QVC have each requested one channel, while the NBC Universal group is seeking two channels, one of which is likely to be used by movie channel Studio Universal. Experienced European pay-TV operators, Sweden's AirPlus TV and the UK's Top Up TV, have also submitted bids, with the former requesting six TV channels.

Italian companies and broadcasters taking part on the tender are thematic channel producer Sitcom, financial information publisher Class Editori, the Consorzio Alphabet consortium (made up of Elea-De Agostini group and Interattiva), Anica Flash (cinema and entertainment info), Rete Blu (belonging to the Italian Catholic Church), sports rights broker Infront Italy, as well as local TV channels Telelombardia, Antenna 3 Nord Est and Altitalia TV.

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IPTV providers must push PPV and VOD

Although consumers are increasingly prepared to have some form of pay-TV in their household, getting more consumers to order and then regularly view pay per view (PPV) or video on demand (VOD) remains a key challenge for service providers, according to a recent survey by Gartner.

In the fourth quarter of 2007, Gartner surveyed 5,800 consumers, covering 18 countries and territories, and found that approximately three-quarters of all worldwide respondents had some form of pay-TV in their households, yet less than one-quarter of all respondents purchased either PPV or VOD content within the past year.

The research indicates that globally, the average consumer spends 22 hours per week viewing entertainment television; of which 16 hours per week is spent watching TV and six hours watching DVDs or videotapes. Furthermore, 39 percent of all survey respondents had downloaded some form of video content (moves, TV shows and video clips for example) in the past three months.

Gartner maintains that tapping into this established behavior and providing alternate solutions to satisfy demand is essential in earning incremental revenue for IPTV. “Consumers already value DVD and videotape purchases and rentals, so getting them to transfer this behaviour or habit over to IPTV subscriptions is a key strategy in developing revenue,” said Amanda Sabia, principle research analyst at Gartner. “Providers need to ensure that ordering and navigation processes for PPV and VOD are easy to understand and user friendly. They should also offer competitive pricing, free trials and a wide range of titles, making sure they include various unique and most-recent versions.”

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Tiscali portal launches EPG

Tiscali has launched its Electronic Programme Guide (EPG) available through its portal. The EPG is designed to be an essential TV guide and planning resource for users of any digital TV service – including Tiscali's own Tiscali TV, Virgin Media, Freeview and Sky.

The Tiscali guide is the first online listings service to include full details of over 170 channels and TV content available through on-demand channels like 4OD, giving viewers the chance to search through listings of every TV show or film stored on each.

The guide enables users to personalise the service to the channels and features they are most interested in. Users can select the channels they want to view, set reminders, pick favourite shows and receive recommendations based on their personal preferences. The service also includes interactive elements allowing users to rate programmes and comment on them.

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FLO approves conditional access standard

The FLO Forum, a body of more than 95 supporting global wireless industry leaders and dedicated to the open standardisation of FLOTM (Forward Link-Only) technology for mobile multimedia broadcast, has taken another step forward with the approval by the Telecommunications Industry Association (TIA) of the Forward Link Only Open Conditional Access (OpenCA) Specification.

The completion of the OpenCA Specification, published as TIA-1146, creates a standards-based environment that enables multiple vendors to implement content security systems within the FLO architecture. The specification is the eighth FLO standard approved by the TIA, following the publication of TIA-1130 Forward Link Only Media Adaptation Layer Specification earlier this year.

The OpenCA specification provides a standard interface for conditional access (CA) systems to interoperate, ensuring that FLO network operators have the flexibility to use multiple CA solutions. Through the standard interface, they can replace an entire CA system seamlessly with another system, or run multiple systems concurrently in a “Simulcrypt” setting. This provides operators with greater control to respond to changing security demands or business model requirements. The framework also enables content providers to offer a wider choice of premium mobile content while reducing the risk of piracy, and thus helping to create a compelling end-user mobile TV experience.

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Demand for new content driving growth of African pay-TV

African digital TV consumers are seeking more localised content from the pay-TV industry, and operators are answering the call by developing business models to meet this growing market's demands, according to IMS Research.

Sub-Saharan consumers previously limited to only South African content can now enjoy local programming from other countries because of the rise of new national and pan-regional African pay-TV operators such as HiTV and Gateway. Competition between major DTH operators is resulting in channel line-ups that offer international, country- and language-specific broadcasting to appeal to larger African audiences.

Over the years, African consumers‚ interest in international content has shifted toward a focus on local and national programming. Operators such as Nigeria's HiTV and Trend TV, which are seen as more culturally in touch with the tastes of African TV viewers, have been proactive about marketing local programming. Growth of content production facilities dedicated specifically to native content has made new programming available, and as a result Africans no longer need to rely on European or American programming for entertainment. Interest in sports content in particular influences demand for services such as Gateway‚s GTV, one of the only services authorised to broadcast English Premiere League football in Africa.

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NBC streaming data for advertisers

NBC Universal has announced its NBC TV network will next month become the first to make programme-specific streaming data available to advertisers, who will be able to compare demographics from such US hit shows as Heroes and The Office. Data will be provided to advertisers by Nielsen Online’s VideoCensus measurement system.

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Teleste receives Digicable order

Teleste has been selected by Digicable Network in India to deliver their new compact IP-based digital television platform. The value of the initial order is E12 million. Digicable will provide an advanced portfolio of digital interactive television services over a Head End in the Sky (HITS) satellite distribution network. The solution provided by Teleste will provide both IPTV and DVB-C based television.

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