The value and optimal management of channel position and prominence on

electronic programme guides

Jeremy Klein, Technologia

Jonathan Freeman, i2 media research

Ray Lambert (Birkbeck College)

Communications Review, Seminar SeriesSeminar 4: Driving investment and growth in the UK’s TV content industries

Monday 16 July, 9.30-14.00, DCMSPanel session 2: How can we drive growth in broadcasting through regulatory change?

Terms of reference• HMG Policy goals:– investment in UK content– access for consumers–market vitality

• HMG:–potential for EPG to be used as a way to lever

in additional investment in UK content

Terms of reference• How well is the current system of regulating

EPGs working?• Is there a need to update the system of

regulation?• Can EPG position be extended as an instrument

of policy?–e.g., to promote UK-originated content

Key findings (1)• EPG Prominence confers economic value– If there is a practical way of achieving a desired

outcome, EPG a potentially strong policy lever– However, any changes must be carefully considered

as high impact on industry• Overall, current system acknowledged to work well– Platforms have developed their own approaches– Secondary market in EPG positions on Sky– Ofcom called to adjudicate just twice since 2004– 75% of PSB channels have absolute prominence

Key findings (2)• Some indications it could work even better– Freeview (DMOL) not formally subject to EPG rules

under Comms Act– Positioning for non-PSBs– Prominence of HD and some BBC channels on Sky– Lack of logical structure sub-optimal for consumers

Key findings (3)• Future proofing– Currently, only linear EPGs are regulated– Search and personalised recommendation

(based on social network and behavioural analytics) increasing in importance• e.g, TiVo (main screen), Zeebox (2nd screen)

– So, ‘prominence’ regulations will lose influence in the future

Outside scope of regulated EPGs

“The principle of regulating in order to give prominence to PSBs will be just as valid and therefore efforts should be made to find points

of leverage in order to implement prominence regimes in future EPGs however different they are from current linear EPGs”

PSB broadcaster

“The sheer diversity and particularity of future EPGs will render them impossible to regulate in any sensible way. Ultimately it will be content that matters, and viewers will want search and browse

techniques that deliver the content they want rather than be told by a regulator what they should prefer”

Platform operator

Methodology• Interviews with broadcasters, platform

operators, Ofcom, and a TV manufacturer• Analysis of viewing figure data• Commissioned report from Canis Media on

the operation of the secondary market in slots on the Sky platform

Current situation wrt EPG regulation• EPGs and LCNs regulated via:• Communications Act 2003• Ofcom EPG Code of Practice 2004• (DTG’s D-Book)

• Objectives of legislation:• ‘Appropriate prominence’ for PSBs• To avoid unfairness or misuse of monopoly power in the

allocation of EPG/LCN slots• To encourage usability features for disabled people and

people with hearing and/or visual disabilities

• All platforms (Freeview, Virgin, Sky, Freesat) have published EPG codes

Our report proposed four options:Option Benefits Costs/risks(1) Doing nothing Avoids instability and

consequential risksFails to address areas of weakness in current arrangements. Fails to pre-empt technology developments and regulation will gradually lose ’bite’.

(2) Clarifications of scope and terminology

Addresses known areas of weakness in current arrangements and pre-empts changes to the technologies employed to search and browse content.

Does not enhance use of EPGs as a policy lever. Even minor tinkering might unbalance a system that works. Also, potential legal challenges from channel owners and platform owners.

(3) A flexible but bounded first tier

Achieves some additional use of the EPG as a policy lever but within constraints designed to limit instabilities to the system as a whole

May be difficult to implement, and danger of unintended consequences. Also, potential legal challenges from channel owners and platform owners.

(4) Major overhaul Potential for full alignment of broadcasting policy with EPG regulation

Little stakeholder support, potential legal challenges, large risk of unintended consequences, large risk of discouraging investment.

Option 1: doing nothing• Pros:• Current system not broken• Maintains stability• Does not risk unintended consequences

• Cons:• Does not address known weaknesses• Weak definition of ‘appropriate

prominence’• Technology developments weaken effects

of regulation over time

Option 2: clarify scope and terminology• Pros:• Addresses known weaknesses• Tighten definition• Enhance consistency• Anticipate technology change (‘hooks’)• Strengthen consumer interest?

• Cons:• Difficulty in redefining prominence• Does not enhance use of EPG as policy lever• Changes can have unintended consequences• Risk of legal challenge

Absolute prominence

Relative prominence

Other prominencemechanisms

e.g., Via option 2, refine definitionOver-riding prominence

PSBs

Non-PSBs

First Tier

Non-PSBs

Local TV

High UK origination

Current situation Option 3

Option 3: a flexible but bounded 1st tier

Option 3: a flexible but bounded 1st tier• Extends use of EPG as a policy lever• Maintains stability for majority of EPG• Allows concepts of PSB, Local etc to evolve

• Changes can have unintended consequences• Uncertainty could reduce investment in UK

• Difficulty defining and measuring UK content• distribution – production

• How long should a high slot be awarded for?• Channels evicted/ demoted? To where?• Reallocating a high slot costly to demoted channels

• EU/UK origination• Risk of legal challenge (affected platforms and/ or channels)

Pros

Cons

Option 3: e.g., commercial risks• Project modelled insertion of a channel at

position 6 in the Sky General Entertainment genre• Value of new slot - £16m• Value lost by demoted slots – £12m

• Commercial value to EPG position, and strategy built around EPG position• an asset that tends to be supported by

investment in content and/ or marketing

Transfer of value from incumbents to new entrant

Option 4: a major overhaul• e.g., Deregulation (limit regs to 1-5 only)• e.g., Regulation to enforce market in EPG posn.• e.g., Regulation of full EPG line-up• Pros:• Potential for full alignment of broadcasting

policy with EPG regulation• Cons:• Instability – bad for industry and consumer• No stakeholder support• Risk of legal challenges

Interviewees: problems with any change• Risks to stability• Could discourage investment• Difficulties measuring UK-origination• Multi-channel broadcasters• No obvious constituency of support

Thank you.