In the last two years, two events have occurred that affect television broadcasts as we know them; I am referring to DTT or digital terrestrial television. This means broadcasting the signal through limited licenses (ten multiplexes in the case of Catalonia) and via radio waves.
The first event was the speech given by Tim Davie, Director General of the BBC, on December 7, 2022. It marked 100 years and 23 days since the first broadcast of the channel. In his speech, Tim Davie reflected on the role of the BBC in UK society and its funding through a fee paid by citizens whenever they purchase a TV receiver. He claimed the BBC’s role as a driving force in the audiovisual industry and as a catalyst for growth, supporting over 50,000 jobs and 14,000 suppliers.
Despite this assessment, Tim Davie also acknowledged that times have changed and consumption habits are not the same. The internet, and more specifically social media, have shaken things up, and there is a need to look to the future. For this reason, it is necessary to transform the BBC as well and to set sights on 2030, announcing that over the next decade, a complete transition to digital will be required, leading to the shutdown of DTT broadcasts.
The other event, which has gone unnoticed by many, is the World Radiocommunication Conference 2023 in Dubai. This conference was supposed to validate the third digital dividend, reallocating DTT frequencies to mobile telecommunications by 2030. In other words, the disappearance of DTT in six years. Fortunately for all of us, lobbying pressure halted the decision, postponing it to the next conference, which will be in 2031. But it doesn’t take a genius to see that communication networks increasingly require more frequency allocation in a growing array of devices, now including the boom of IoT (Internet of Things).
As can be seen, we were on the verge of losing DTT, likely without most professionals even realizing that this outcome was being decided in December 2023. We can breathe easy for a few years, but tough times are ahead, and it is highly probable that this will eventually happen in the next decade.
So, what scenario will local televisions face in 2031 if this decision is made? Essentially, they will lose (or have already lost) one of their current competitive advantages: the minimal competition they have within the radio spectrum. Some may argue that this is not true, that there is a lot of competition and it is fierce. So let’s imagine what the battle could be like in an environment not controlled by licenses (like DTT). This is what is known in the business realm as a red ocean: full of sharks fighting over the same prey and tearing each other apart. Quite a vivid description.
“Digital transformation is not about applying technology, but about changing and adapting processes to reinvent the business model. From here, technology will work its magic.”
This alternative to DTT broadcasts is the digital world, or the online world, as it may be called. Offering content via the internet—a news portal, on-demand TV, an OTT, and primarily social media or other innovations like voice assistants such as Alexa. However, this environment is uncharted territory for television stations. They have never fully entered it because it means duplicating a lot of work and, therefore, increasing costs. Distribution windows multiply, and processes are very manual, especially if one wants to maintain minimum standards of quality and informative rigor.
On the other hand, this digital territory is full of native media that come from other types of companies, such as local magazines or simply sole proprietorships dedicated to publishing content. These digital-native media are unregulated, are not required to verify information, do not concern themselves with the quality of images or videos they distribute, and thus have a significant advantage over television stations, which are constrained by regulations and codes of conduct.
Finally, we are witnessing the boom of so-called FAST channels, which are a version of thematic channels funded by advertising, broadcasting over the internet grouped on platforms, like those included in Samsung TVs. In this specific case, a user can find more than 130 channels added to their DTT channel list that directly compete with traditional television. This is a clear example that the television has ceased to be an appliance for watching linear channels and has become a content aggregator that receives material through various means, such as radio waves or internet connections.
Therefore, traditional media cannot wait seven, eight, or ten years to confront these new digital-native players that are already competing in a field that has until now been a monopoly of television stations. It is urgent for local television to position itself with the public, and many are already starting to do so. We could talk about the digital transformation of local TV. Not only because of the change in technology, but also due to the redefinition of internal processes necessary to reduce costs and compete with actors that are already digital. With very different business models and, in the case of local media, they also have a connection with the citizens. For example, the magazines from bakeries that, through social media, are starting to build a strong rapport with the people in their town or city.
Initiatives like La Xarxa+ (the OTT promoted by Xarxa Audiovisual Local that aggregates content from 54 television channels and 110 radios and makes it available to citizens through an internet platform) are key to this transformation. But it is also necessary for each media outlet to compete side by side with its digital competitors in its town or city. The good news is that they have the content and credibility. The rise of so-called fake news and its detection by consumers opens a significant window of opportunity for media that prioritize rigor and good journalistic practices. The bad news is that they must change the way they do things and adapt, just as the BBC announced two years ago, to the new world that is already here.
In conclusion, as I began, these are the objectives that Tim Davie has set for the BBC:
- Urgently move towards the internet.
- Rapidly transform the BBC to take a leadership role in the digital market.
- Proactively invest in the BBC brand as a global leader.
- Advance more swiftly in regulation to ensure the success of this move towards digital.
Replace BBC with the name of your television station and ‘global leader’ with ‘local leader,’ and you will have the foundation to outline your strategy for the next five years. And remember, digital transformation is not about applying technology, but about changing and adapting processes to reinvent the business model. From here, technology will work its magic.
Carles Rams, CEO and Co-founder of Ebantic
