Digital Migration; business opportunities

Now that the earlier post has addressed the background of whole digital migration, it is better to explore opportunities. It is good to care about public good but if there is a way to benefit, I say take it.

For background, a digitised signal can allow for up to ten TV channels (standard definition) to be broadcast, and a single analogue channel would require the whole frequency.

So, what are these opportunities?

1. Software development

One of the things that media owners will have to do is provide content in an encoded way and develop algorithms that can provide more space for the content. The developers will have to come up with innovative ways to squeeze more content within a single channel.

Payment of content will be per megabit and therefore the winners will be the companies that can squeeze more content within a smaller space (in simple terms) Western immigrants are probably ready with proposals and it would be nice if Kenyan developers are well versed with this technology and can provide the services. For instance, media owners will be looking for ways to utilize the bandwidth and pay less like in cases where  a TV broadcaster can decide to increase the compression and quality of most of its TV channels for a particular event, so as to make some extra space available for a bandwidth-hungry High Definition  broadcast of that specific occasion.

Because this is business, media owners will be looking for innovative ways to deliver with low operational expenses. If you can deliver this, then you are in business.

2. Content generators/distributors

I have argued in a previous post that content will be the winner. There will be companies whose business is to produce content e.g community theatres, schools, etc You have a choice to either distribute or sell this content or you can give it to another company to distribute it for you, think of the middle men.

For instance, we could decide as a village to produce a cooking show, then sell it to either the media houses or through an intermediary. It will depend on capital outlay and negotiation skills. If your core business is production, you can leave distribution to other companies that have sharks and vulture like characters to maximize the profits.

Remember, CCK says 60% has to be local content, where do you think the media will get this content? Lets get to work 🙂

3. Media personalities, owners etc

If one digital frequency can hold 10 standard channels, think of how many TV personalities and media owners we can have. There will be job opportunities and an expansion of the sector.

Some channels will be regurgitating old content but if you have unique content, you will have advertisers because the content will be hyperlocal and targeted. Even counties will need people to run their stations.

4. Digital Dividend allocations

The analogue frequencies will be allocated and if we are not careful, this will go to the old cartels. It is important to get on board with CCK discussions, yes, they take them to Karen where there are no Matatus but we got to try.

It will be important for CCK to set aside free frequencies for rural services and you will not be allocated if you were never part of it. Remember history is written by the victors and if you are not there, you may never know how allocation was done.

5. Renting old media masts

With digital transmission, media owners will have to decide if to sell the infrastructure as scarp metal or rent it out to others who may find alternative uses. If you can find a way to make use of these masts, start polishing proposals for later on in the year when the dust settles.

 

6. Pay per view services

With the available bandwidth, this would be a chance to target disgruntled DSTV and local TV viewers fed up with repeated content and cheap shows from South America, Asia and India. Yes, there will be still space for them but if you can target livestreaming of movies and TV shows, there is a market.

Look at what Able Wireless has done- they have affordable streaming service. CCK doesn’t require licensing for such services.

 

If you have any other ways to make money with digital migration, please share, those are the only ones I could think about.

 

rebecca

January 6th, 2014 View Profile

“Journalism is printing what someone else does not want printed: everything else is public relations.” ― George Orwell

Comments

  1. Gichu

    Reply

    Hi,
    Great article.
    I however some comments to make.

    Part 1 – Sw Dev

    Developing algorithms for reducing bandwidth consumption is not really something that can be considered an opportunity.

    There are already ratified standards that deal with compression of digital signals. These standards are handled by the Moving Picture Experts Group (MPEG).

    The digital STBs that have been certified and approved by CCK are designed for the MPEG4 standard

    The average good quality Mpeg4 SD channel will use an average of 2Mb/s worth of bandwidth while HD channels will consumer an average of about 8-10Mb/s worth of capacity.

    The only avenue to reduce bandwidth utilisation is to play around with resolution of the video picture.

    But, if you squeeze it down too low, then the video quality of your channel will be quite poor and in most cases will turn users away from your channel.

    You can actually get a good real life taste of this from the comfort of your laptop.
    Try to watch a youtube video at 144p or 240p on your laptop and set the display to full screen.
    Then compare how the quality changes as you select higher resolutions, i.e 360, 480 and then the HD resolutions of 720 and 1080.

    Notice the quality when you get to 480 and above. Higher resolution means more bandwidth. More bandwidth (Mb/s) means better quality.

    There is already technology in existence that tries to optimize the picture quality to use as little bandwidth as possible, but in reality there are always limits to how much you can squeeze it down.

    4. Digital Dividend allocations

    Yes, the analogue frequencies will be re-allocated. But they will only be allocated to the licensed signal distributors (i.e. SIGNET, PANG, and whoever gets the 3rd license). The rest of the spectrum is freed up to allow for LTE to be deployed.

    Thats the reason the new model changes the game plan. If you want to offer a regional service, then all you need to is talk to the distributor that has coverage in that region. No need to lobby CCK to set aside rural frequencies. CCK has already gone the extra mile of setting different tarrifs for transmission outside Nairobi.

    There is no legal room to allocate these other frequencies to the old cartels (unless through corruption, or if the old cartel gets the 3rd distribution license).

Leave a Reply