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13 September 2018

Swiss DTT shutdown beginning of end for digital terrestrial

The Swiss government’s decision to allow the country’s public broadcaster SRG to cease digital terrestrial transmissions at the end of 2019 has naturally prompted speculation that other countries will follow, especially in Europe. But the Swiss move can be seen as a premature sunset for DTT which will survive for well over a decade in countries where it is popular and well established, including the country’s immediate neighbors Austria and Germany. Those two countries have recently reaffirmed their commitment to digital terrestrial as they migrate to the more advanced and higher capacity second generation DVB-T2, which generated a bonanza in set top sales there during 2017.

The immediate fate of DTT in a given country then depends largely on its penetration and the reliance on it for public service broadcasting in particular. The UK is another case where DTT is set to survive for many years through its Freeview service, which delivers 70 channels over the air and is actually gaining in popularity. It so happened that during August 2018 the rise in Freeview viewing spiked as a result of an acrimonious dispute between the country’s dominant MSO Virgin Media owned by Liberty Global and UKTV, with the latter’s channels Dave, Drama, Home, Really and Yesterday being blacked out. Freeview is the dominant source of TV programs in 11 million UK homes, 44% of the 25 million total, and is available in 17 million because so many TV sets have the DTT tuners built in.

DTT is also set for a long stay of execution in most of Southern Europe. While average penetration for DTT on the main TV is 27.7% across the 27 European Union member states, in Croatia, Greece, Italy and Spain it is above 50%. In these countries as well as the UK the most likely date for final DTT switchover is around 2030 when it would be time to move onto to a third generation of DTT, but when instead video transmission may finally be combined with mobile, as part of 5G services.

Switzerland is certainly very much a special case partly because the mountainous terrain is less favorable to DTT signal propagation. Just 1.9% or 64,000 of Swiss homes now use DVB-T for primary TV reception according to SRG.  The rest use either IPTV, cable or DTH, with SRG recommending that homes affected by switch-off opt for the latter as it offers much better reception while also being free to air.

Another factor is that SRG faces growing pressure to cut costs as it remains funded by a license fee, which will remain in force after 71.6% of the country’s voters rejected the No Billag initiative to abolish the license fee in a referendum held in March 2018. This was instrumental in the move to cease DTT and concentrate on offering a clear alternative to commercial TV, which itself incurs costs.

The most likely candidates to follow the Swiss move in the near future are those countries where DTT penetration has already slumped to low levels and the alternatives of high speed broadband, cable TV and satellite dominate. In both Belgium and the Netherlands satellite is largely a backup option but broadband and cable have swept the board with DTT most likely on the way out in the next few years. In Belgium the angel of death is already hovering over DTT with Dutch language public broadcaster VRT pulling the plug on its DVB-T broadcasts on December 1, 2019. This affects VRT’s three main channels Eén, Canvas and Ketnet, currently available free-to-air across the country, which just 45,000 people still watch over DTT, while costing over €1 million a year to sustain. VRT said it will reinvest the money on its free-to-use VRT Nu online platform which has 1.125 million registered users.

Sweden and Finland might then be next in Europe to abandon DTT, but for a different reason, because of a strong swing towards 4G LTE as a source of video content on smartphones and tablets. It is true that Sweden has been migrating from first generation DVB to DVB-T2, but it has been scaled back due to the falling demand. The original plan had been to deliver a greatly increased number of HD channels over DVB-T2 but after consulting with broadcasters the country’s transmitter company Tracom revised its estimate downwards and now with reduced capacity DTT will merely maintain existing services. As Tracom conceded, the number of recipients with DVB-T2 support is significantly less than had been hoped or anticipated.

The Swiss move has also prompted some anguish in the US over the future of DTT there which had looked secure for the foreseeable future. After all great efforts have been made in developing the third generation of the prevailing North American DTT standard, ATSC 3.0, aiming to leapfrog other DTT versions with support for UHD at 2160p 4K resolution at 120 frames per second and targeted advertising.

It has been designed with mobile convergence around 5G in mind much more than say DVB-T2, while also facilitating hybrid TV combining OTT and broadcast using MPEG DASH delivery of video over broadband. In fact, the DASH Industry Forum (DASH-IF) developed a DASH interoperability profile specifically for ATSC 3.0.

Against this background the immediate future of DTT in the US looked secure. After all ATSC 3.0 had gained traction elsewhere, including South Korea which launched terrestrial ATSC 3.0 services in May 2017 in preparation for the 2018 Winter Olympics.

However the major US networks such as NBC, CBC, ABC and Fox are not compelled to broadcast their channels over DTT and could if they wish, offer their premium content exclusively to cable and satellite operators. Furthermore, while the Federal Communications Commission (FCC) approved regulations for broadcast stations to voluntarily offer ATSC 3.0 services, they must still be offered alongside a standard ATSC digital signal. There will be no mandatory transition to ATSC 3.0 as was the case with the transition from analog NTSC to ATSC in the first place. There is therefore a get out for the networks if they do not believe the investment in ATSC 3.0 migration is justified by the likely penetration.

On the other hand there is the phenomenon of massive US churn, which has had the side effect of slightly boosting DTT viewing over the last few years. This is because more homes are relying on free to air combined with one or more SVoD offerings, so networks will be reluctant to concede this important route to the main TV.

In Asia Pacific there is also a very mixed picture, with some countries actually stepping up their commitment to DTT suggesting that it may hang on there, longest of all, although that has the potential to change quickly. India is an interesting case with the fate of DTT there in the balance but possibly on the verge of a rebound. The background there is that broadcasting had grown rapidly and been stimulated by a number of satellite operators and the digitization of cable, which was largely completed in a four-phase process by March 2017.

That left terrestrial broadcasting as the only medium that had not been digitized, leading the Telecom Regulatory Authority of India (TRAI) to issue a consultation paper recommending the country go ahead with digitization of DTT.

The paper noted that most of the data in India was provided through mobile connections and that DTT had the potential to take some of the load off cellular networks. Intriguingly it suggested that mobile phones supporting DTT could have an integrated chip or even a dongle for DTT access. This has been tried before and has huge battery implications if placed directly into the phone.

TRAI has advocated a three-phase plan for DTT migration modelled somewhat on the earlier cable digitization, starting with big cities, then smaller urban areas and finally the whole country by 2023, although that sounds ambitious.

The upshot of all this is that while the Swiss switch off does herald the demise of DTT in some countries over the next few years it is far too soon to write if off globally and its fate will vary widely depending on factors including terrain, population density and legacy. However no-one new will get rich by providing content over DTT alone, that’s for sure.