Digital Migration Offers Mixed Bag Of Opportunities

There is lots if singing and dancing about digital TV (literally). The CCK launched a series of road shows to educate consumers about this new form of technology and how it will affect them. Consumers should be largely happy. For just less than three thousand shillings they will greatly improve the quality of pictures on their screens. They will also be able to obtain digital information like TV guides from their TV.

If you are a large broadcaster, the singing and dancing should pass you. For starters the barriers of entry to TV broadcasting have just been brought down significantly. While the pioneers of the TV industry had to create investments in masts and towers, the current entrants will literally walk in to a signal aggregator with an internet connection to deliver their programming.

The headache of how the signal is distributed will largely rest with these aggregators. Even worse is the fact that for each analogue signal, nearly 8 will become available for broadcast. Whereas regulators had difficulty licensing and issuing frequencies, there will be plenty to go around. For large broadcasters this means trouble.

Entry costs down and frequencies freely available will mean a constant stream of competitors. These will also be buying content in the same market as exiting players, which means that non proprietary programming is likely be pricier as demand increases. Anyone who has been following the movement of the English premier league can attest to what happens when there more takers for content.

Existing broadcaster also have to invest in new equipment. Expensive HD cameras will become necessary as well as technology to encrypt signal before delivery to aggregators. While advertisers who may resent big broadcasters for inflexibility and market control may smile at the prospect of competition upsetting the apple cart, things are not quite that straightforward.

More stations will fragment existing audiences further. As rate cards rarely come down in this market, smaller audiences in existing stations will mean higher prices for each contact bought. It is likely that the huge ratings we have seen recently will decline as more broadcasters enter the market.

Making media decisions without objective data will also become an impossibility. As it is, making decisions in a market of about 20 TV stations is hard enough, making any station or programming choices in a market of 160 will be a new science . Media research will be a new and necessary cost to many traditional advertisers who previously knew instinctively where they wanted their advertising  and bought it that way.

The migration to digital TV will therefore carry some hidden risks and costs for advertisers and existing broadcasters. While the agenda for digital conversion is a global one, governments around the world will be dealing with a mixed bag. Many will have additional spectrum resources for more stations as well as new uses.

Cheekier ones will like the fragmentation that will result, especially where private broadcasters have run tyrant over public opinion.

Frank is Lead consultant at FMC and CEO at Sponge a mobile agency.
Frank.Maina@spongegroup.com