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  • Satellite TV and the waning of the Global Village

    The following is a slightly edited version of a contribution I made to the newsgroup, on the issue of satellite TV and the promised disappearance of national boundaries in Europe.

    A couple of weeks ago, there was an exchange on the perennial topic of scrambling and European access to UK satellite channels. As usual, it took the form of a whining "why can't I have one too", to which I must confess to have contributed.

    However, the topic is too interesting to let it go at that. In particular, if we see it in light of the expectations and fears that satellite TV awoke only four or five years ago, it is somewhat ironic to see the course of the development. It is, to put it this way, the revenge of the particular over the global.

    At that time, satellite TV was seen as perhaphs the most forceful factor in the "globalization" of human culture, both in postive terms and in negative. Adherents cheered the breaking down of cultural and political restraints. Now, nobody could tell us what we should and should not watch, we could follow political events where they occured, see the same culture and entertainment as our neighbours abroad, and have a width of choice impossible in each individual country. The TV set would open up to the "global village", or at least the European one, we could see Russian or Greek TV as well as the Russians and Greeks themselves.

    This was also the view by those who feared for the submersion of the various national cultures into one hybrid "entertainment culture", by force dominated by America. In particular in smaller countries like mine, this was official policy, one saw Norwegian language and culture as being under attack from the skies. However, one "could not close the borders of the airwaves", so this "attack" from the uncontrollable influx of entertainment and low culture from the Clarke belt must be met by supporting a "Norwegian alternative" (an argument used with great vigour and some success by Norwegian film makers and artists). This was the defence of the "particular" against the "global".

    Where are we now?

    Today, this seems all very distant. Instead of the openness of the global village, we see the world of satellite TV closing in on itself along the old national boundarires, scrambled and inaccessible. Granted, this process is not complete. The Germans make a big exception, and even beside them, there are about 45 unscrambled channels in the Ku-band alone over Europe. However, most of these are either in less used languages (Scandinavian, Turkish, Arabic, Greek), or technically less accessible (the French in the Telecom band). And even for these, the tendency is towards increased scrambling, not greater openness.

    Scrambling has, as we know it, two reasons. One is to get income to the provider through subscription, the other is to limit access of the channel to a particular country or countries. Thus, the satellite world, instead of being united, is in the process of being split along the same national lines as the old surface TV was: UK satellite channels can only be seen in the UK, Scandinavian ones only in the North, the French in France. Thus, it seems that both the hopes and the fears of the "globalizing" effect of the satellites were in vain. It is the victory of "particularism" over "globalism".

    Of course, it is not quite the same as before. For one thing, satellite channels are not run by the state, as the old monopolies used to be. But for most of us, that is of lesser importance than the programming. Also, at least in the smaller countries the "packages" we are invited to subscribe to contain some international channels, like Discovery and Children. But there is a tendency to "nationalize" even those, with dubbing or fixed subtitles.

    And it may be getting worse. The latest European proposal for digital TV say that scrambling and subscription in the suggested new Simulcrypt method should be restricted to one agency per country, so that all subscription channels in that country should be available on a single card. In practice, the existing dominant services, BSkyB in the UK and Canal+ in France would be given this agency. If so, their monopoly will become official, and any satellite channel that wants to offer subscription to UK or France, etc., will have to negotiate with them. Hopefully, the EU is not going to accept this de facto monopolization, but the services in question are pushing hard for it to become official policy.

    So, in effect, the distinction between the openness of satellites and the closed world of cable is shrinking. More and more, the difference becomes one of receiving six Turkish channels of TV shopping and game shows or not.

    What happened?

    There are probably many reasons for this defeat of globalism. But some that merit mention are;

  • The absence of a European advertising market. Logically, a pan-European market should offer advantages many times that of the single country, but it has been demonstrated that advertisements are national, partly because products are national; prices certainly are, and people's sensitivity to ads vary so much from country to country that the pan-European effect is marginal or even negative. Thus, from an advertising point of view, global (European) TV is irrelevant, and it is quite believable that they have asked e.g. Sky to limit its diffusion to Britain alone.

  • This means that the publicity revenue of the satellite channels are only that which they can get in their "target" country, in competition with national surface TV stations. As they are not yet able to attain figures comparable to the latter, their revenue is comparably smaller, and the need for scrambling to get subscription income greater. There is nothing much to be done about this, thus scrambling in order to get subscription money will probably be with us until the satellite channels can compete with surface stations in audience, at which time they probably be neither willing nor able to forgo the subscription revenue.

  • Another motivator for scrambling is the cable companies. They see satellite distribution as a direct competitor for their services, and have every interest in containing it. Thus, a director of one of the leading US cable companies, TCL, said in an interview recently [TéléSatellite, January 1995], concerning their interest in the British BSkyB corporation, that their aim if they entered, was to turn 70 per cent of the country's satellite viewers over to cable. Today, many cable companies have to pay the satellite broadcasters for the right to distribute their programs. They often refuse to do so, as long as the dish owners can see the channels for free. So many broadcasters scramble their services for a nominal fee, simply in order to be allowed onto cable. This is the case e.g. with the LCI news channel in France, where legislation is clearly in favour of cable over satellite.

  • However, the probably major reason for "limitation by scrambling" is the distribution of transmission rights. Those who hold the rights to films and TV series, Hollywood in short, sell those rights on a nation-by-nation basis. Thus, the channel that wants to buy the rights to broadcast a film in France pays in principle the same amount whether it is an open channel, seen by 60 millions, or a closed one with 50 000 subscribers. For this reason, paying for the rights to send films in the 20-odd countries that can receive Astra is prohibitive, and restriction of viewing to one country the result. Unlike the market size argument above, this seems neither natural nor fair. It would be understandable if the companies were competing for exclusive rights to send a movie. In that case, the size of the real audience would not matter, as the exclusivity is given for the complete nation/market. However, this does not normally seem to be the case. In Scandinavia, where we have competing movie channels, most films are screened on both channels, and often soon after on a non-subscription channel. Certainly, a channel going for a pan-European service would not need to have exclusivity all over Europe, nor would it be in the interest of the consumer (us) to have programs restricted to one channel only.

    Thus, for non-exclusivity, there is no logical reason why distribution rights is not paid for on the basis of real audience, which in the case of subscription channels is easily established. It would be in the channels' interest, as they would be paying on the basis of their actual subscriber base, rather than a theoretical national market, and they could thus easily expand their target to the greater European market. Assuming that the channels actually have a net income on each new subscriber, this could only be to their interest (the British channels would also have less to fear from the pirate card market, which would be severly undercut if legal cards were available throughout the continent). The consumer gains, because he gets a wider choice, as well as real competition between different satellite companies, rather than today's national monopolies: With such a regime, it would be easier - not easy, but easier - to set up "independent" channels on a pan-European or local scale.

    Who would lose? Hollywood, perhaps. I do not know the figures used for the sale of rights, but it is reasonable to assume that Hollywood sticks to the current outmoded model because either (a) Europe is so small that its particular case is not worth changing established practices, or (b) it is feared that they could not on a "real audience" model charge the prices, and thus generate the income, they do today, even if they were selling rights to a larger number of European channels. It is probably not hubris to consider (b) to be most likely. [A wish to isolate the very profitable British market - native English speakers ­ from the rest of Europe will probably also play a part here.]

    A policy for satellite users in Europe

    Thus, we can imagine of a policy to support. We, the consumers, should favour a globalization of the satellite market. We will continue to see free, unscrambled TV from national providers like the minority languages, "export channels" like TV5 and news channels, but can probably not expect unscrambled high-quality channels showing films and competitive entertainment. Rather than fighting that, we should push for goals such as these:

  • A pan-European market for satellite TV, that is, the basis for distribution rights should be the real audience, not national markets. Thus, subscription should be available on the basis of, "whoever can receive the signal, can subscribe to the service".

  • Rejection of national private monopolies in ownership or distribution of satellite TV, as the Simulcrypt paper suggests.

  • Real competition between satellite channels / packages. Only in this way will the subcription rates, which today probably are unnaturally high, come down. This can, it seems, only happen on a larger market that the national ones. Is there any chance of such policies being realized? The EU has not been terribly efficient so far; it is probably hampered by the lack of resolution by some governments in opposing their national "dominant service" (no names mentioned...). But they can perhaps be moved by public opinion? Also, Hollywood is not completely independent of Europe; many European companies (Canal+....) have interests there, and it is likely that an efficient European pressure would make the sit up and listen. In any case, it might be worth a discussion in this forum.

    Knut S. Vikør [Home]

    Knut S. Vikør.
    July 1994 / April 1995

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