Jeremy Klein of Technologia, Jonathan Freeman of i2 media research and Ray Lambert of Birkbeck College - presentation on "The value and optimal management of channel position and prominence on electronic programme guides". TV content seminar, 16 July 2012, part of the Communications Review. Find out more at http://dcmscommsreview.readandcomment.com/tv

1. The value and optimal management of
channel position and prominence on
electronic programme guides
Jeremy Klein, Technologia
Jonathan Freeman, i2 media research
Ray Lambert, Birkbeck College
Communications Review, Seminar Series
Seminar 4: Driving investment and growth in the UK’s TV content industries
Monday 16 July, 9.30-14.00, DCMS
Panel session 2: How can we drive growth in broadcasting through regulatory change?

2. Terms of reference
• HMG Policy goals:
– investment in UK content
– access for consumers
– market vitality
• HMG:
– potential for EPG to be used as a way to lever
in additional investment in UK content

3. Terms of reference
• How well is the current system of regulating
EPGs working?
• Is there a need to update the system of
regulation?
• Can EPG position be extended as an instrument
of policy?
– e.g., to promote UK-originated content

4. Key findings (1)
• EPG Prominence confers economic value
– If there is a practical way of achieving a desired
outcome, EPG a potentially strong policy lever
– However, any changes must be carefully considered
as high impact on industry
• Overall, current system acknowledged to work well
– Platforms have developed their own approaches
– Secondary market in EPG positions on Sky
– Ofcom called to adjudicate just twice since 2004
– 75% of PSB channels have absolute prominence

5. Key findings (2)
• Some indications it could work even better
– Freeview (DMOL) not formally subject to EPG rules
under Comms Act
– Positioning for non-PSBs
– Prominence of HD and some BBC channels on Sky
– Lack of logical structure sub-optimal for consumers

6. Key findings (3)
• Future proofing
– Currently, only linear EPGs are regulated
– Search and personalised recommendation Outside
(based on social network and behavioural scope of
analytics) increasing in importance regulated
EPGs
• e.g, TiVo (main screen), Zeebox (2nd screen)
– So, ‘prominence’ regulations will lose influence
in the future
“The sheer diversity and particularity of future EPGs will render
them impossible to regulate in any sensible way. Ultimately it will
Platform operator
be content that matters, and viewers will want search and browse
techniques that deliver the content they want rather than be told by
a regulator what they should prefer”
“The principle of regulating in order to give prominence to PSBs will
PSB broadcaster be just as valid and therefore efforts should be made to find points
of leverage in order to implement prominence regimes in future
EPGs however different they are from current linear EPGs”

7. Methodology
• Interviews with broadcasters, platform
operators, Ofcom, and a TV manufacturer
• Analysis of viewing figure data
• Commissioned report from Canis Media on
the operation of the secondary market in
slots on the Sky platform

8. Current situation wrt EPG regulation
• EPGs and LCNs regulated via:
• Communications Act 2003
• Ofcom EPG Code of Practice 2004
• (DTG’s D-Book)
• Objectives of legislation:
• ‘Appropriate prominence’ for PSBs
• To avoid unfairness or misuse of monopoly power in the
allocation of EPG/LCN slots
• To encourage usability features for disabled people and
people with hearing and/or visual disabilities
• All platforms (Freeview, Virgin, Sky, Freesat) have
published EPG codes

9. Our report proposed four options:
Option Benefits Costs/risks
(1) Doing nothing Avoids instability and consequential Fails to address areas of weakness
risks in current arrangements. Fails to
pre-empt technology
developments and regulation will
gradually lose ’bite’.
(2) Clarifications of scope Addresses known areas of Does not enhance use of EPGs as a
and terminology weakness in current arrangements policy lever. Even minor tinkering
and pre-empts changes to the might unbalance a system that
technologies employed to search works. Also, potential legal
and browse content. challenges from channel owners
and platform owners.
(3) A flexible but bounded Achieves some additional use of May be difficult to implement, and
first tier the EPG as a policy lever but within danger of unintended
constraints designed to limit consequences. Also, potential legal
instabilities to the system as a challenges from channel owners
whole and platform owners.
(4) Major overhaul Potential for full alignment of Little stakeholder support,
broadcasting policy with EPG potential legal challenges, large risk
regulation of unintended consequences, large
risk of discouraging investment.

10. Option 1: doing nothing
• Pros:
• Current system not broken
• Maintains stability
• Does not risk unintended consequences
• Cons:
• Does not address known weaknesses
• Weak definition of ‘appropriate
prominence’
• Technology developments weaken effects
of regulation over time

11. Option 2: clarify scope and terminology
• Pros:
• Addresses known weaknesses
• Tighten definition
• Enhance consistency
• Anticipate technology change (‘hooks’)
• Strengthen consumer interest?
• Cons:
• Difficulty in redefining prominence
• Does not enhance use of EPG as policy lever
• Changes can have unintended consequences
• Risk of legal challenge

12. e.g., Via option 2, refine definition
Over-riding prominence
Absolute prominence
Relative prominence
Other prominence
mechanisms

13. Option 3: a flexible but bounded 1st tier
Current situation Option 3

14. Option 3: a flexible but bounded 1st tier
• Extends use of EPG as a policy lever
• Maintains stability for majority of EPG Pros
• Allows concepts of PSB, Local etc to evolve
• Changes can have unintended consequences
• Uncertainty could reduce investment in UK
• Difficulty defining and measuring UK content
• distribution – production
Cons • How long should a high slot be awarded for?
• Channels evicted/ demoted? To where?
• Reallocating a high slot costly to demoted channels
• EU/UK origination
• Risk of legal challenge (affected platforms and/ or channels)

15. Option 3: e.g., commercial risks
• Project modelled insertion of a channel at
position 6 in the Sky General Entertainment
genre
Transfer of
• Value of new slot - £16m value from
incumbents
• Value lost by demoted slots – £12m to new
entrant
• Commercial value to EPG position, and strategy
built around EPG position
• an asset that tends to be supported by
investment in content and/ or marketing

16. Option 4: a major overhaul
• e.g., Deregulation (limit regs to 1-5 only)
• e.g., Regulation to enforce market in EPG posn.
• e.g., Regulation of full EPG line-up
• Pros:
• Potential for full alignment of broadcasting
policy with EPG regulation
• Cons:
• Instability – bad for industry and consumer
• No stakeholder support
• Risk of legal challenges

17. Interviewees: problems with any change
• Risks to stability
• Could discourage investment
• Difficulties measuring UK-origination
• Multi-channel broadcasters
• No obvious constituency of support

18. Thank you.