Digital Terrestrial Television
Transition Strategy for Brazil
Kiev, Ukraine, 13-15 November 2000
Jarbas José Valente
Superintendent, National Telecommunications Agency, Brazil
Contents
3 Introduction
3 Today’s television broadcasting in Brazil
3 Horizontal and vertical market structure
3 Steps toward transition
3 The economic analysis on the digital terrestrial
television transition
3 Conclusion
Introduction
This presentation has the main purpose of
providing an in-depth examination of the
transition strategy that Brazil intends to pursue in
the introduction of Digital Terrestrial Television
Broadcasting (DTTB) services while phasing out
the rendering of analogue television broadcasting
services.
Today´s television broadcasting in Brazil
3 Brazil’s broadcasting services are characterised as those freely
and directly delivered to the public in general;
3 Includes Radio and Television Broadcasting;
3 The ownership of a broadcasting company is allowed only to
Brazilian citizens or those naturalised over a period of time
more than 10 years;
3 Networks are mostly under private ownership but some nongovernmental and public entities also hold the control of a few
of them.
Today´s television broadcasting in Brazil
TV density on Brazilian Territory
Less than 60%
60 to 70%
70 to 80%
80 to 90%
More than 90%
Today´s television broadcasting in Brazil
Existent Stations in Brazil
STATION
Quantity
Generator
333
Relay Station (Biggest) (5 kW)
748
Relay Stations (Smallest)
(250W)
7,840
Total
8,921
Today´s television broadcasting in Brazil
Digital Planning
Difficulties:
3 Database on TV spectrum allotment;
3 TV (VHF and UHF) Spectrum Congestion;
3 Differences between digital transmission power and analogue
transmission power to cover a particular area;
3 Differences in the configuration of TV networks.
Priorities in carrying out the Digital TV Planning
3 The TV in spectrum allotment database must be updated;
3 The worst cases, in terms of areas with TV spectrum congestion,
must be identified;
3 Possible TV channels to be used by digital transmission must be
defined;
3 Studies must analyse each possible TV channel, defining maximum
power, restrictions, etc.
Horizontal and vertical market structure
6.000
5.440
5.000
4.570
4.100
4.900
4.000
2.980
3.000
Revenues from
advertising by all
stations
2.020
2.000
R$ Milhões
1.000
0
1993
1994
1995
1996
Average 1998: US$ 1.00 = R$ 1,21
1997
1998
Fte: Zenith Media
Horizontal and vertical market structure
Revenue of the main broadcasters in Brazil
520
Total
4.900
150
250
R$ milhões,
1997
250
250
880
2.600
0
500
1.000
1.500
Average 1997: US$ 1.00 = R$ 1,1164
2.000
2.500
Others
CNT
Record
Bandeirantes
Manchete
SBT
Globo
3.000
Fonte: Globopar, análise da equipe, 1998
Horizontal and vertical market structure
Percentage
egions
Percentage of
of the
the broadcasters
broadcasters revenue
revenue following
following the
the Brazilian
Brazilian rregions
40,00%
35,00%
37,30%
30,00%
25,00%
20,00%
15,00%
15,40%
10,00%
11,90%
9,70%
9,10%
5,00%
7,90%
6,90%
1,90%
0,00%
1)
3)
5)
7)
South
São Paulo (Capital)
Rio de Janeiro
Southeast (RJ and SP excluded)
2)
4)
6)
8)
Center-west
São Paulo - Interior
Northeast
North
Source: Radio e TV magazine, 1998
Horizontal and vertical market structure
Geographic coverage of the main broadcasters
41
69
CNT
92
Record
Bandeirantes
72
Manchete
97
SBT
100
0
20
40
60
80
100
120
Globo
Fonte: Mídia Dados 97
Horizontal and vertical market structure
% Age classes that view broadcasting programming
50/65
40/49
30/39
20/29
15/19
95
96
96
97
98
92
93
94
95
96
97
98
99
100
Fonte: Mídia Dados 97, análise de equipe
Horizontal and vertical market structure
% Social classes viewing broadcast programming
70
95
98
99
99
0
20
40
60
80
E
D
C
B
A
100
Fonte: Mídia Dados 97, análise de equipe
Steps towards transition
4 Resolution nr. 69, from 23/11/98
4 Approval of the Procedures to be followed during the Digital TV testing
4 Main outputs deriving from the testing
4 Definition and Presentation of the Technical Report (field and laboratory analysis);
4 Definition and Presentation of the Marketing and Technical Report;
4 Public Consultation - Digital TV standard;
4 International Agreement;
4 Technical Regulation for the Provision of Analogue TV and Relay TV Services;
4 Consolidation of the Basic Plans on Analogue TV, Relay TV and TVA;
4 The choice of the Digital Terrestrial Television Broadcasting Standard;
4 Technical Regulation on Digital TV;
4 Basic Plan for Digital TV (main stations);
4 Basic Plan for Digital TV (complete version);
4 Contribution to the question 11/2, SG2 of the ITU-D (The Decision-Making Process on
Digital TV at ANATEL).
Steps towards transition
Key issues to be addressed in the choice of DTV Standard:
3 Screen Format;
3 Interactivity;
3 Mobility;
3 Television and Personal Computer Convergence;
3 Telecommunication and Television Convergence.
What to take into account in the decision making - Strategic
Factors:
3 Universal access to information for all social classes;
3 National integration and the preservation of the regional identity;
3 Latin American integration;
3 Technological co-operation;
3 Rapid economic development;
3 Rebirth of the parts and components industry.
Steps towards transition
What to take into account in the decision making - Technical
Factors:
3 The digital television service must be, at least, equivalent to the
currently distributed analogue television service;
3 Digital and analogue systems must have an adequate coexistence
during the transition period;
3 Flexibility for introduction of new applications must be taken into
account in the long-run.
3 Implications of the digitalisation process on different TV
networks:
3 The digital television service offered in different networks must be
compatible;
3 The integration of programs and functionality between these
different networks must be considered;
3 Must carry rules should be duly applied.
Steps towards transition
What to take into account in the decision making - Economic
Factors:
3 Impact on the Broadcasting Industry Value Chain;
3 Determinant factors for the promotion of the digital television;
3 Cost to the Broadcasters;
3 Cost to the Consumers;
3 Potential market of each digital television system.
What to take into account in the decision making - Social and
Cultural Factors:
3 The role played by the television in the life of the citizens;
3 The convergence from the cultural point of view;
3 Expectations of the users on the digital television;
3 Others cultural and socials factors.
Steps towards transition
What to take into account in the decision making - Scenarios under
analysis by Anatel:
3 Scenario I - HDTV programming only and low interactivity
3 Scenario II - SDTV programming only
3 Scenario II a - Multiples programs
3 Scenario II b - SDTV interactive
3 Scenario II c - SDTV with free and paid services
3 Scenario II d - SDTV with free and pay TV services and others
telecommunication services
3 Scenario III - Hybrid model
3 Scenario III a - SDTV / HDTV
3 Scenario III b - SDTV shared with Educational Stations
3 Scenario IV - Mobility in any of the last Scenarios
Steps towards transition
Cost to be considered by Broadcaster - Studio
3 MPEG Converter
3 MPEG Multiplex
3 Digital Camera
3 Digital VTR
3 Monitors
3 Servers
3 Etc.
Total cost for Studio is between 200,000 and 1,000,000 US$
Source: CPqD.
The economic analysis on the
digital terrestrial television transition
Cost to be considered by broadcasters for Relay Station
3 Infrastructure
3 Tower
3 Housing, power supply, air conditioner
3 Reception
3 Satellite antenna
3 Satellite receptor
3 Microwave link
3 Transmission
3 Transmitter 250 W
3 Transmitter 5 kW
3 Antenna 250 W
The economic analysis on the
digital terrestrial television transition
The current Brazilian Television Plan
Licensed
Planned
already
included
Planned
new
inclusions
Total
TV
RTV
TVA
Total
333
8,588
25
8,946
654
2.060
-----
2,714
4,500
8,500
-----
13,000
5,487
19,148
25
24,660
The economic analysis on the
digital terrestrial television transition
Marks to TV video quality during
simulations to the public
Regions
Marks to current
TV video quality
Marks to current TV
video quality with a
conversor
Marks to Digital
TV video quality
Center-west
3,9
6,8
9,4
South
3,8
6,6
9,3
Southeast
4,0
6,9
9,5
Northeast
4,4
6,8
9,2
North
3,8
6,5
9,1
The economic analysis on the
digital terrestrial television transition
Per Capita Income (in US$)
Less than 2,000 US$
2,000 to 4,000 US$
4,000 to 6,000 US$
More than 6,000 US$
National Average is around US5,020
The economic analysis on the
digital terrestrial television transition
TV Sets industrial sales
2.500.000
2.000.000
1.500.000
2.150.000
2.000.000
1.700.000
2.100.000
2.000.000
1.300.000
1998
1999
2000
1.000.000
1.000.000
500.000
0
1º Quad.
2º Quad.
3º Quad.
Source: ELETROS
The economic analysis on the
digital terrestrial television transition
VCR’s industrial sales
700.000
680.000
660.000
690.000
600.000
500.000
400.000
360.000
430.000
395.000
1998
1999
2000
340.000
300.000
200.000
100.000
0
1º Quad.
2º Quad.
3º Quad.
Source: ELETROS
The economic analysis on the
digital terrestrial television transition
TV Receiver Market - Mercosur
Country
Homes (1,000)
TV sets (1,000)
Brazil
37,000
53,768
Argentina
8,900
10,600
Uruguay
970
1,750
Paraguay
700
530
10,570
12,880
Sub-total Mercosur (except Brazil)
The economic analysis on the
digital terrestrial television transition
3 Brazilians are keen on high technology appliances;
3 Brazil’s consumer electronics industry, along with Mercosul,
encourages the local production of equipment;
3 Most of the international TV equipment suppliers
(Americans, Europeans e Asians) are presently established
in the country;
3 The local production of equipment is an important factor to
balance Brazil’s international trade in electronics goods,
parts and components.
The economic analysis on the
digital terrestrial television transition
The analysis
considered
of
the
Transition
Costs
for
Consumers
3 Interviews;
3Statistics model;
3 Assumptions: prices, opportunities, etc.
Transition Costs for Consumers
3 The cost must be adequate to the Brazilian Society;
3 The consumers equipment must allow a variety of configurations to
meet the needs of the Brazilian Society, such as:
3 Higher interactivity;
3 Lower interactivity;
3 Full multimedia applications and services, etc.
Conclusion
Thus, considering the summary of the Brazilian Television Market
presented here in terms of today’s television broadcasting, horizontal
and vertical market structure, steps toward transition and the
economic analysis on the digital terrestrial television transition, the
Brazilian administration believes that owing to sharp intra- and interregional differences in the consumption power of the Brazilian
population, prices and features, of set-top boxes and other related
equipment, are likely to have to adapt to the reality of the Brazilian
market, in this sense the participation of the Brazilian population has
been of great importance in the process .
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