Due to bureaucratic and political reasons, incapacity and rushed decision-making, taking major steps without prior consultations with all entities broadcasting contents, digital air in Macedonia is both underutilized and unattractive for private broadcasters. Commercial broadcasters complain about the extremely high prices and monopoly, while the public broadcaster, comfortably lulled in its imaginary power and elitist protection by the ruling party, is unable to move forward because the process was politicized.
Written by: Teofil Blazevski
Republic of Macedonia, three years after having introduced digitalized telecommunications, is unable to reap any benefits from this process. When referring to the Republic of Macedonia, we primarily mean the citizens, but also the state. The only benefit enjoyed by viewers, at first glance, is the higher number of “channels” and “crystal clear image”. However, these are false benefits, because not all citizens have access to higher number or channels nor do they all have “crystal clear image”. This is supported by the fact that the concession holder of “digital frequencies” – the operator One, transmits images to its users in SD resolution, and the fact that its market share is lower than one quarter of all TV subscribers.
Most importantly, neither citizens nor commercial radiobroadcasters have utilized the advantages of signal digitalization, in particular because it seems that the entire process had been rushed, without due consideration of all voices of the concerned public.
This is the general image obtained after scraping deeper under the surface of the digitalization process and listening to people that are well knowledgeable of this process and are or have been stakeholders therein.
BROADCASTING IN SD RESOLUTION
At the moment, three years after the process, we have the following situation: majority of commercial broadcasters at national or regional level are transmitted terrestrially by the operator One – daughter-company of Telecom Slovenia, which operates both multiplexes by means of concession contract with the state. The signal is digitally transmitted in SD resolution, on the account of the price and the limited capacity, while One disposes with the technology called Digital Video Broadcasting – Terrestrial (DVB-T). This technology is considered outdated as it implies lower signal compression (image and sound) compared to the new DVB-T2 technology and allows maximum flow of 22 Mbit/s (22 megabits per second) per multiplex.
One of the two multiplexes operated by One can “pack” maximum of 11 television channels in SD resolution or only three channels in full high definition, i.e. FULL HD resolution, in particular knowing that according to all standards SD resolution requires minimum of 2 Mbit/s, while HD resolution requires minimum of 6 to 8 Mbit/s.
Hence, the five televisions with national concession being terrestrially broadcasted through limited resources (aerial radiofrequencies) are being charged for signal transmission rate of 2 Mbit/s, which is sufficient to broadcast in SD resolution. In case of dynamic scenes such as, for example, sports broadcasts, this does not satisfy the need for quality image, on the account of which signal transmission rate through One is dynamic, i.e. transmission of megabits per second for one channel is increased on the detriment of quality transmission of other channels, explained some of our interlocutors.
In other words, the two multiplexes operated by One cannot service the market with image of better quality, because the technology they use is outdated. According to our interlocutors, this is so because at the moment when One submitted its bid, as late as the third tender procedure announced by the Agency for Electronic Communications, it was already in possession of previously developed signal transmission network for its TV platform BoomTV, with DVB-T transmission technology.
HD RESOLUTION IMAGE IS AVAILABLE THROUGH CABLE AND OTHER OPERATORS
Last analysis made by AEC for the fourth quarter of 2015 clearly shows the main holder of the “activity” TV signal transmission to end users:
This shows that commercial broadcasters both, on national and regional level, are more interested in being transmitted by cable operators, primarily due to the absence of any costs (they avoid payment of high fees, in their opinion, to One), while broadcasting through unlimited resources (cable) allows televisions that have invested in HD technology to enable viewers quality image. Hence, HD channels of some televisions in Macedonia are most often made available through cable operators or Internet platform televisions.
Thus, given the market circumstances presented above, what was the purpose of rushing to initiate full signal digitalization in 2013, when the deadline for such endeavour set by EU bodies back in 2006, in Geneva, was 2015? The crucial question is what did citizens of Macedonia gain both in terms of technology innovations and in terms of programme offers that would be ideal for multinational and multicultural society, such as the society in the Republic of Macedonia?
MRTV – A GIANT ENTANGLED IN DAILY POLITICS
The answer must be separately addressed to the public broadcaster and the private broadcasters, because the nature of their respective operation, including their rights and liabilities, are different.
Unlike commercial broadcasters, Macedonian Radio and Television does not have costs for digital television transmission through terrestrial transmitters. MRTV transmits the final signal to its users through one of the two multiplexes intended to be used and non-commercially operated by the public enterprise Macedonian Broadcasting (MB), which has been given at its disposal a total of three multiplexes. This means that MRTV disposes with much bigger capacity for signal transmission, and correspondingly benefits from much bigger possibility for various programme offers, creation of so-called sub-channels, i.e. specialized-programme channels, as well as other advantages allowed by the digital signal. But this has not happened in practice for almost three years in a row.
This raises additional brows knowing that from the regular allocations in the amount of several millions of euros it receives as assistance from the state budget on annual basis (around 4 million euros only in compliance with Article 105 of the Law on Audio and Audio-Visual Media Services), significant portion of funds is intended for development and completion of the digitalization process. For evidence, please refer to the 2016 Financial Plan, for example, where it is indicated that 20 million MKD or more than 324,000 euros will be spent on completing activities related to purchase of digitalization equipment, plus several millions MKD enlisted under the depreciation column where digitalization equipment is also enlisted.
Representatives from MRTV did consider this matter. At the meeting of MRTV’s Program Council held by the end of last year, the management had proposed this council to reconsider and adopt decision to establish new programme channels at MRTV, initially as an experiment, justifying its proposal that such endeavour would increase diversity of offers. At that time (November 2015), the plan anticipated establishment of three new channels under MRTV, those being: MTV3 – music and entertainment channel (plus sports), MTV4 – documentary channel and MTV5 – children channel.
However, the management had forgotten one thing – MRTV is a public service to all citizens of the Republic of Macedonia and, in compliance with a law, is financed by them, and have also failed to make due account of programmes in languages spoken by minority communities that are time-sharing the second programme service at MRTV. Heated discussion had ensured at the said meeting, whereby some representatives of Albanian ethnic background initially requested the second channel to be designated for broadcasting programme in Albanian language only, the third channel to be designated for broadcasting in languages spoken by other minority communities living in Macedonia, and establishment of new channels to be reconsidered afterwards. This discussion had been followed by voting, where the management’s proposal was initially adopted, and after requesting authentic interpretation from the Parliament of the Republic of Macedonia, voted in accordance with the Badinter principle of double majority, etc., the ultimate result implied a request made by the management to have the recently adopted decision at the Programme Council’s meeting revoked.
Hence, yet again citizens have not gained anything. Moreover, no consideration has been made (this is not indicated in documents we were given insight in) of the possibility to choose subtitled or audio-translation for the new channels, or for any of the existing channels for that matter. The conclusion is inferred that sufficient attempts have not been made, for instance, to enable multi-ethnic viewing of all programmes offered by MRTV, which would have been an actual benefit for all viewers.
This was also indicated by Goran Gavrilov, owner of the broadcasting company emitting the national radio Kanal 77, recognized as excellent connoisseur of relevant legislation and technical capacity:
“Having disposed with this resource for more than three years, except for the digitalization of image, MRTV has done absolutely nothing that would imply benefit for the audience. I do not believe the reasons thereof had been of economic nature, as the entire infrastructure had been built with assistance from AEC (Agency for Electronic Communications, equipment and signal maintenance is pursued by PE MB, and falls on the burden of citizens, by means of payment of the broadcasting levy, revenue from advertising represents a significant investment of funds that should be re-invested, purchase of studio digital equipment was assisted by the Budget of the Republic of Macedonia, USAID, and by the Netherlands… Hence, all these conditions, enabled by various factors and, at the same time, enhanced with increased collection rate of broadcasting levies with the assistance of PRO (Public Revenue Office), have created a solid basis for successful digital start of MRTV“ says Gavrilov.
However, he is convinced that MRTV should be a leader in this process and in conquering new technologies, with the ultimate goal being benefits for all, both citizens and the state:
„Nevertheless, MRTV, as leader in media technology standards in Macedonia, must also be a champion in digitalization in terms of highly productive technology, adding new contents and services to meet the audience’s needs“ says Gavrilov.
As regards these matters, including the technical aspects, for example, whether MRTV broadcasts signal in HD resolution through the multiplex, not only through the cable operators carrying it, we addressed the responsible people at the public broadcaster and asked for their opinion. Nevertheless, in spite of neatly sent e-mail to the editor-in-chief of the first programme service and the manager of the sector on TV/RA technology, as well as the several calls made to the former, we were unable to obtain any answers.
COMMERCIAL TELEVISIONS WITHOUT PLANS TO IMPROVE THEIR OFFER
If MRTV, with so many funds and no costs for transmission owed to MB, does not manage to push forward programme development and utilization of benefits brought by digitalization, why would anyone expect the financially weaker commercial broadcasters to reconsider enriching their offers and utilizing benefits of the digital signal?
Main reason they indicated implies that under conditions of significantly decreased share of the marketing cake in Macedonia which, in their opinion, does not exceed 20 million euros per year (without the money from governmental campaigns that are currently discontinued), and unnecessarily high costs for broadcast and terrestrial signal transmission through the multiplexes operated by One (discounted fees amount to around 105,000 euros annually for SD resolution), there is simply no perspective for reconsidering specialized channels, 3D broadcast, multi-language translation of their programmes, let alone purchase of technology that would allow viewers to select the camera.
Money and the market have been enlisted as probable reason for non-existing advantages from digitalization development also by Dejan Georgiveski, director of the Media Development Centre (MDC):
“The main reason is the fact that in our country the market, at the time of transferring to digital signal, was already saturated with media and is characterized by low sustainability, considering the revenue available from advertising. Estimates range from 20 million euros under the worst case scenario, to maybe 40 million euros under the best case scenario. That renders entry of new broadcasters difficult and uncertain, with little chance for success. Otherwise, in the case of well-regulated markets, digitalization has proved to be successful exactly in the field of new services and new channels, in particular specialized-programme channels“ says Georgiev.
Georgiev referred to the Netherlands and the United Kingdom as examples supporting his claim.
“The Netherlands, in addition to the public broadcaster with three channels, has two commercial TV broadcasters, each carrying three channels, where the marketing cake is measured in billions of euros. Similarly, in the United Kingdom which, prior to the digitalization, had four national TV networks, BBC with its two channels, ITV, Channel 4 and Channel 5, with their regional branches, regional channel in Wales and 18 licenses on limited services (mainly concerning local broadcasting). In our country, as I mentioned, due to the market’s unsustainability, lack of possibilities for investment return, and in general, politically motivated decisions on developing the broadcasting activity, I do not expect this to happen in any foreseeable future“ says Georgiev.
Goran Gavrilov was also of the standing that Macedonian audience has not gained anything more than “a slightly sharpened image”, and identified reasons thereof in the price and the market.
“Private media replaced their studio equipment with SD technology or HD technology, and some of them even purchased FULL HD equipment, however, despite having studio conditions for high definition resolution or certain interaction, they are still transmitted in SD resolution by the provider One.
What are the reasons for that? It is as simple as this: the price agreed between AEC and One. Annual fees for signal transmission in SD resolution amount to more than 90,000 euros, while in the case of HD resolution they amount to around 300,000 euros. Regional TV stations pay around 35,000 euros for SD resolution.
Economic inability of the fragmented television market comprised of extremely high number of TV services aired and carried by cable operators, has exhausted the ability of televisions to pay this fee and therefore quantity is the factor that determines quality to be received by the broad public.
Ultimately, the audience gained many domestic channels in SD resolution in the digital air, without HD resolution, without bilingual possibilities, without 3D, without interaction. Comparison of contents is not even worth mentioning, as the market power allows only payment of signal transmission.
At the same time, cable operators and MaxTV as Internet platform offer the possibility and service for transmission in HD resolution on their digital packages, in particular because investments were made in optic cables and as part of “Fibre to the Office“ and “Fibre to the Home“ projects. Therefore, in the long run, they might be the leaders of digitalization with several services, which has nothing to do with the digital air“ says Gavrilov.
He warned about the emergence of new technologies that might render the digital air even less attractive, referring to global providers such as IP and OTT platforms, known through the US-based company Netflix, which is making its way on the market in Southeast Europe and offers movies and series with subtitles translated specifically for that market.
Such technologies may pull in the media, thus rendering the digital air without perspectives due to bureaucratic reasons – says Gavrilov, reminding that in European countries, in addition to subsidizing receipt of digital signal for socially endangered families, the state had also subsidized new technologies at the televisions for the purpose of producing quality signal.
UNDER THESE CONDITIONS, QUESTIONS CONCERNING CONTENT OFFERS ARE CONSIDERED “AVANT-GARDE”
Similar opinion is shared by Bisera Jordanovska, who until recently was the long-standing director at TV Alsat-M. She believes that the rushed process and non-involvement of private televisions when prices had been arranged, as well as the increasingly smaller piece of the marketing cake, makes digitalization unattractive for private televisions, in terms of pluralism of programme contents.
“Broadcasters, when reduced to strictly commercial operations, are in the mode of never-ending survival battle. In such circumstances, questions concerning the content offers in the context of digitalization are somewhat “avant-garde”.
Of course, options for an offer of better quality do exist. For example, the possibility to select subtitles in several languages or the two-channel audio. Having in mind the population structure in the country and the bilingual concept of, for example, TV Alsat-M, under normal market conditions, utilization of all possibilities is inevitable, but in reality money or lack thereof is the key factor. In that, it is not only a matter of additional costs towards the operator One.
If the broadcaster wishes to air a particular show with subtitles or synchronized in both languages, that would imply much higher costs for license rights, because Macedonia has that feature where one and the same show series are sold on the same territory, but separately for Macedonian and Albanian language.
Televisions most probably assess that the higher cost cannot be commercially justified or recovered by means of advertisements. Reasons thereof, inter alia, include the fact that an overly high number of broadcasters are fighting for a piece of the ever smaller marketing cake.
In that regard, analysis of the state of affairs in the media space should be defined much broader, because digitalization had only perpetuated and deepened affairs already existing on the market“ says Jordanovska.
Representatives from TV Telma also believe that problems are created both by the provider and the marketing cake, i.e. the money. Dimce Slaveski, responsible for technology at this television, said that viewers – at least in terms of the signal – have not gained anything more, while “the most defeating aspect” is the limited signal transmission.
“As regards the offer for the viewers, one can freely state that there were no improvements made in terms of signal quality compared to what they received before.
The most defeating aspect of the digitalization is the limited transmission capacity of the multiplexes – 22 Mbps /MUX or 44 Mbps for the both. This is due to the use of outdated technology DVB-T at times when developed countries use DVB-T2, which provides up to 40 Mbps. In other words, the operator One does not have the capacity to transmit signals in HD resolution“ says Slaveski.
As regards the opening of specialized channels, Slaveski was of the standing that such endeavour would necessitate establishment of an independent entity (broadcasting company) and acquisition of adequate license from the Agency for Audio and Audio-Visual Media Services (AAVMS). In the case of enabling subtitles in another language “there are no limitations, except for the financial ones”. Slaveski believes that fees paid to One are high and that a new method of fee calculation must be in place.
“Fees paid by televisions to the operator One, especially when compared to costs for full servicing of the analogue terrestrial network, are at least five times higher. Fees should be set on the basis of actual transfer of data for each television individually“ says Slaveski.
He added that costs incurred by TV Telma so far implied investment in encoder for airing digital signal and adjustment of the same prior to handing it over to One, but costs also included previous investments in existing link-enabling and transmission equipment on which TV Telma had spent more than 1.5 million euros and 70 percent of which can be used in the digital network.
However, the remaining 30 percent of investments had not been compensated to individual broadcasters. This was confirmed by Gavrilov and Jordanovska, who said:
In the case of certain televisions that have significantly invested in a network of transmitters such as, for example, TV Alsat-M, only few years ago, this had been an indirect financial blow, because the company did not have the opportunity to realize its business plan as the investment in question was based on the duration of the license set at 10 years.
NO BREATH OF FRESH AIR FROM THE DIGITAL AIR
The conclusion inferred on the basis of interviews conducted with these interlocutors, but also on previous debates held at various gatherings organized on this topic, is almost defeating. The signal, i.e. image aired by the operator of terrestrial digital multiplex – One, was not improved; there is no media pluralism in terms of more broadcasters joining One, on the contrary, the process is reverse; there is no pluralism of media contents; there are no specialized sub-channels; there is no 3D; there is no interaction with viewers; content production was not made cheaper, etc.
Before the start of this process, somewhere in 2009 and ending on 1st June 2013, the state tasked the then current Broadcasting Council (currently the Agency on Audio and Audio-Visual Media Service) with drafting a strategy. The First Strategy, which anticipated, inter alia, absence of monopoly over the multiplexes, had not been accepted and no justifications had been made thereto, only to follow with the adoption the Second Strategy, where it has been stipulated that Macedonian Broadcasting will dispose with two multiplexes and the remaining two will be given under concession for commercial use.
Rushing into the process and negative consequences thereof were elaborated in detail by our interlocutors. Bisera Jordanovska said that in the final stage of the process nobody asked the commercial broadcasters for their opinion.
“At the very beginning, the group of national broadcasters had several meetings with the heads at Macedonian Broadcasting, to explore the possibility for airing through the said multiplexes, but in the process that followed this option was excluded by the Government.
In reality, competent bodies were much too late in raising this issue. Televisions were faced with an already made decision to shut down the analogue signal and disassemble their transmitters and transfer to DVB-T or to choose another means of transmission (unlimited resource). The state entrusted the company One with the obligation to operate the two multiplexes and conduct digitalization. National televisions, in order to remain terrestrial, had no other choice but to sign contracts with this company“ says Jordanovska.
Goran Gavrilov also said that the state and competent bodies demonstrated an utterly uninterested behaviour in terms of the needs of private broadcasters, notably by referring that “it is your own private matter”.
As a result, Macedonian citizens did not gain anything, the state collected revenue in the amount of tens of million euros on the account of custom duties and taxes for new TV sets, concession fee collected from “One”, sales of digital dividend on the telecommunications market for development of 4G technology for transmission of Internet data. In other words, with the exception of the one-time payment to the state, the television signal digitalization process did not bring benefit to anybody, the least to the citizens.
(This article was developed in cooperation with the Metamorphosis Foundation, as part of the project “Digitalization of Broadcasting in the Republic of Macedonia”, financed by the Independent Journalism Programs from London.)