Academic journal article Journal of Information, Law and Technology

Converging Regulation for Convergent Media: An Overview of the Audiovisual Media Services Directive

Academic journal article Journal of Information, Law and Technology

Converging Regulation for Convergent Media: An Overview of the Audiovisual Media Services Directive

Article excerpt

1. The Impact of Convergence on the Broadcasting Industry

Arguably the epicentre of today's converged environment is the broadband internet network. This has led to broadband delivered broadcasting, or IPTV as it is more commonly known, as well as allowing the creation of broadcasting via mobile phones. Convergence means operators need to respond to the new environment in order to take advantage of new opportunities and avoid losing revenue. Forsyth and Heath (2007) have argued '[t]he era of scheduled TV channels is fast coming to an end' as on-demand programming becomes the norm as viewing trends follow the general shift to a 24/7 mobile society, evidenced by the rise of 24 hour news channels and uptake of services such as Sky+. (1) The impact of convergence has seen new opportunities, such as the more efficient distribution of services within a channel's existing capacity but most 'notably [Digital Terrestrial Television], and the delivery of audiovisual services through new technological platforms [which] have expanded the presence of such services on the market reinforcing the well-known phenomenon of fragmentation of supply.' (2) However, some business models have also faced hard tests from the resulting fragmentation of audience share. Although, it should be noted that, the impact of convergence has not only been limited to operators; there have also been major implications for how the industry is regulated.

1.1 Convergence and the implications for broadcasters

Convergence has created significant economic pressures as the audience fragmentation leads to a reconfiguration of the landscape. This is particularly so when coupled with the rise in ICT availability and usage by the European population. We now have a multi-channel environment, with a greater public use of videos and DVDs, (3) and whereas traditional channels, such as ITV1, could regularly attract audience figures of 15m plus for some shows, now on a good night they might attract 9.2m viewers (Forsyth and Heath 2007). The effect of this competition is that advertisers will no longer pay the same amounts for restricted advertisement slots that yield less exposure. ITV1 saw advertising revenues fall 12.4 percent in 2006 (even with the Football World Cup on its schedule), while 2007 saw a further fall, albeit only 4.4 percent. (4) Meanwhile European Internet advertising grew 40 percent to 7.2bn [euro] in 2007. (5) As IPTV take up, particular on-demand services, grows so will this figure at the expense of traditional TV ad-spots.

These economic pressures, enhanced by the wave of new broadcasting entrants from the telecoms sector, combined with the ability to offer converged services have 'challenge[d] the sustainability of traditional business models in the sector.' (6) Traditional commercial broadcasters have responded by opting to launch on-demand services although approaches have varied. ITV, perhaps reflecting its current viewer/advertising problem has opted for a free service to attract viewers but charge higher rates for advertisements. (7) Channel 4 however, launched its service with some charges. Latest shows, and the channel's own 'classic' content can be viewed for free, other shows cost 99p while movies cost 1.99 [pounds sterling. (8) The irony is that the broadcasters arguably in the direst positions now could well be in the strongest position in the future. Ofcom has predicted Channel 4 will operate at a loss by 2010 and out of money by 2012. However, as the channel is content rich, meaning it has an extensive archive of popular programmes which it own the rights to; they are better placed to benefit from the arrival of an on-demand environment. This is particularly the case when compared to rivals such as BskyB which, other than sport, (9) produces very little of its own content (Forsyth and Heath 2007, p20).

This lack of own content could be behind BskyB's different response to convergence. As the BBC reports, the one way nature of satellite broadcasting means it is harder to provide a 'true on-demand service. …

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