Government letting TV viewers get screwed

February 14th, 2008 at 1:23 pm by David Farrar

Chris Barton nails the issue perfectly in the Herald on the ridicolous situation of consumers being forced to buy multiple devices just to view all the free to air channels.

There are simple things the Government could do right now to dramatically improve the lot of broadcast consumers. “Must carry” rules could stop the nonsense that’s going on between Sky and TVNZ and give both consumers and the Government immediate benefit. If Sky was required to carry Freeview TV6, the soon-to-be launched TV7 and Sports Extra (a simple channel tuning exercise on the Sky box) and Freeview was required to carry Sky’s Prime channel, consumers would get a much fairer deal.

Hear hear.

How else to explain the ridiculous situation many consumers face right now – that if they want to get all the free-to-air digital channels in New Zealand, they have to buy two set top boxes when one would do?

The Government needs to intervene also in setting open access standards for set top boxes to stop further anti-competitive tactics through the use of incompatible electronic programme guides and other lock-out mechanisms. Even Freeview is guilty of this anti-diversity behaviour.

Some of its accredited set top boxes – the Zinwell and re-badged Dick Smith box – are locked down to prevent customers tuning in other free-to-air satellite channels as they become available. It shouldn’t be allowed. Or, at the very least, prospective buyers should be told: “This box will not allow you to pick up other freely available satellite channels in New Zealand.”

Yes I bet that isn’t in the marketing campaign.  If a channel is free to air, one should be able to tune your device to receive it.

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17 Responses to “Government letting TV viewers get screwed”

  1. East Wellington Superhero (1,151 comments) says:

    It’s not stupidity. It’s the govt’s desire to control.

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  2. sonic (2,818 comments) says:

    Calling for more government regulation David?

    Interesting.

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  3. Andrew W (1,629 comments) says:

    Can’t agree, if they want to got with seperate systems that’s their business, it’s market competition. what would be worse is if they got together, as ‘competitors’ in other industries do to screw the consumer.

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  4. big bruv (13,923 comments) says:

    Supporting a corrupt govt that continues to screw the people Sonic?

    Interesting.

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  5. PhilBest (5,125 comments) says:

    Orwellian.

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  6. PaulL (5,987 comments) says:

    The government needs to regulate that anyone is entitled to carry a “free to air” channel if they so wish. They don’t need to force any provider to carry them all if they don’t want to. But surely there is a massive opening in the market right now – if one of the providers chose to carry ALL the free-to-air, then everyone would buy that box. We don’t need regulation to achieve that.

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  7. David Farrar (1,898 comments) says:

    When one company is owned by the taxpayer, and funded by the taxpayer, yet is forcing un-necessary costs on viewers, damn right I want Government action.

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  8. PaulL (5,987 comments) says:

    True, that’s a good argument. I have no problem with a government rule that any company that wants taxpayer subsidy must carry all free-to-air channels. That would be entirely appropriate, and would not be “government regulation”, merely conditions on the funding that is offered.

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  9. sonic (2,818 comments) says:

    So your giving Sky a free pass David?

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  10. damocles (83 comments) says:

    The issue isn’t as simplistic as Chris Barton would have us believe. Lest we forget, the whole purpose of Freeview is to enable us as a country to make a full transition to digital television. The ONLY way to encourage us to switch to Freeview is to provide content that isn’t available anywhere else.

    While I personally would love to receive TVNZ6 and the soon-to-launch TVNZ7 via Sky Digital, they’re not available through that service. And it’s not because Sky don’t want to carry the channels — it’s because TVNZ say no.

    And TVNZ can only take that position because the two channels are completely subsidised and commercial-free (though with some sponsorship allowed). As a result there’s no commercial pressure to deliver large audiences to keep advertisers happy — the channels can fulfil their purpose, to attract consumers to this free-to-air digital service so that we can speed up the digital switchover.

    For once, the Government has got at least part of the process right — exclusiveness and scarcity to attract audiences, without fiscal pressure.

    What they should also do is follow the lead of the US Government, who next week will be sending out $40 coupons to enable US consumers to purchase simple (cheap) converter boxes to turn digital signals into analogue for old-style TVs.

    An initiative for Maurice W to offer in his soon-to-be-realised position as Minister of Broadcasting, perhaps?

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  11. PaulL (5,987 comments) says:

    Surely the aim of turning off analogue would be met whether people received their channel from Sky Digital or from Freeview. Perhaps, given the govt is subsidising freeview, they should also subsidise Sky Digital to deliver all FTA channels, and then see which one people choose to buy? They’d also, of course, have to direct TVNZ to make the channels available.

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  12. damocles (83 comments) says:

    Sky Digital’s current penetration stands at around 40% of NZ homes, and it grows at around 1-1.5% per year. Based on that rate, half the country’s homes still won’t have digital by 2012 — the take-up for a paid service is just too low. We don’t have thirty years to manage the switchover — analogue is already dead.

    The objective with services like Freeview is to lure as many viewers as possible over to the digital side through content, requiring only a one-off fee. Eventually, analogue will be switched off entirely here in NZ, as it already has been in an ever-growing number of countries — the hope is that only a small segment of the Kiwi community will need to be subsidised into digital set-top boxes at switchover time.

    Without a compelling content story — and a free-to-air offering — too many viewers will remain wedded to analogue. We’ll never convince them to subscribe to a Pay TV service — too expensive.

    Besides, as we’ve seen to our neverending cost with Telecom, it is simply a very bad idea to allow any single private company to be the only gateway into the home.

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  13. MikeE (555 comments) says:

    Wouldn’t it be better to argue to remove taxpayer funding?

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  14. ben (2,380 comments) says:

    This situation has come about because the government decided to deliver Freeview via a set top box. From what i can tell they did so in spite of the costs and have no prospect of earnings a return.

    It makes no sense whatsoever to then use that economic stupidity as a reason to start regulating Sky. That is a case of regulation begetting regulation of the worst type.

    It is an extremely serious step to trample a company’s property rights as what is being proposed here and the hassle of having two set top boxes in my view isn’t even close – not by a long shot – to justifying it.

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  15. Barnsley Bill (983 comments) says:

    David, you are sounding more like a socialist every day. I have been reading for years your apparent disdain for private property rights with regard to Telecom. Now you are undermining the private property rights of Sky TV.
    freeview was another labour party vanity project. Why should sky subsidise this any further than taxation?

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  16. PaulL (5,987 comments) says:

    My understanding was that TVNZ were choosing not to make the channels available. They were doing that because they were trying to maintain unique content.

    To get people to go to digital, yes it is important to have content that isn’t available on analogue. And also important to have better quality of picture, something that many digital broadcasters choose to ignore, because quality eats bandwidth and doesn’t sell any additional advertising.

    However, TVNZ aren’t competing against Sky. It makes no difference to the reduction of the analogue market whether people go to Sky or Freeview – there is no good reason for TVNZ to withhold these channels from Sky, thereby trying to force people to buy two boxes. If government policy is creating that situation (I think it is, govt is trying to push people off analogue, but presumably measuring TVNZ based on boxes sold, not on people who stop using analogue) then the policy should be changed.

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  17. Rex Widerstrom (5,354 comments) says:

    Government’s role is to set standards. In the US, I believe, trains in one state used to run on a different gauge of rail to those in another.

    Similarly, the NZ government changed the separation between FM stations from 10MHz to 9MHz (forcing all broadacsters, state and private, to incur costs in retuning transmission equipment and rebranding their callsigns) to permit better use of the available FM band. That’s a regulatory decision designed to benefit the consumer (more choice of stations) as well as opening up a finite resource to a larger number of competitors. I see nothing wrong with that.

    The government should have regulated the transmission model for digital TV at the outset, requiring that all new STBs sold be capable of receiving all digital content. Broadcasters who wished to protect content could of course encode it as Sky does at present.

    Thus the competition would have been who could provide the best STB with the most features for the best price rather than requiring people to stack box on top of box.

    But the horse has already bolted (who advises them on TV regulation?!) and I agree Sky should not have to suffer because of the government’s poor planning.

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