Market Insight

HD DTT licences awarded in Spain but decision sparks legal dispute

November 02, 2015  | Subscribers Only

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Principal Research Analyst, Service Providers & Platforms

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The Spanish government has awarded six new DTT channel licences. The October 2015 award included three HD channel licences, which were won by commercial broadcasters Mediaset Espana, Atresmedia and football club Real Madrid. The remaining licences, for SD channels, went to Grupo Secuoya, 13TV and Radio Blanca.

All six new DTT licensees are required commence transmission by April 2016 at the latest. By this time, their networks must cover 50% of the Spanish population, with coverage to increase to 96% by April 2018.

As a result of the awarding process, Mediaset Espana will own a total of seven DTT channels (Telecinco, Cuatro, FDF, Divinity, Boing, Energy, plus its new HD channel) and Atresmedia will own six (Antenna 3, La Sexta, Neox, Nova, Mega, plus its new HD channel).

Two major Spanish media groups, Prisa and Vocento, were excluded from the process and are challenging the government’s decision—both groups have launched an appeal before the National Committee of Markets and Competition (CNMC) while Prisa has also taken the case to the Supreme Court of Spain and the European Commission. Vocento revealed that it is also considering lodging a complaint with the Competition Directorate of the European Commission. Both groups claim that the awarding of new HD DTT licences to Mediaset Espana and Atresmedia will hurt competition in the free-to-air TV market, by strengthening the new licensees’ duopoly. Prisa has also claimed that the decision is in breach of two articles of the EU Treaty (Articles 102 and 106) and therefore creates a risk of abuse of a dominant position.

Our analysis

Prisa and Vocento Group’s reaction to the awarding of the three HD channels licences serves to further prolong Spain’s digital-switchover saga. Analogue switch-off took place in April 2010, yet the five years since have seen a series of legal battles: media companies have challenged the government’s decisions in Spanish and European courts; DTT networks operators have sued the government for breaching the principle of technological neutrality; the European Commission has sent the Spanish government to the European Court of Justice for violating the state-aid legislation; and the Spanish Supreme Court, in 2014, ordered the closure of nine DTT channels because their licences were deemed to be illegal.

All this legal wrangling points to mismanagement of the digital-transition process on the part of the last two governments. The main reason for this is that the interests of both the governments and the major commercial broadcasters were served by applying the framework established for analogue terrestrial TV to the new digital-terrestrial era. This favoured the established commercial broadcasters as it raised the barriers to entry for new players—in 2010, the government awarded a full multiplex to each of the six national commercial broadcasters (Antena 3, Gestevisión Telecinco, Sogecable, Veo TV, NET TV and La Sexta). This decision was subsequently declared null and void by the Spanish Supreme Court as it contravened the applicable Audiovisual Law. However, the commercial broadcasters have managed to retain five of the six multiplexes awarded to them, even after the six original operators became four, following the mergers of Mediaset Espana (Gestevision Telecinco) with Cuatro (Sogecable) in 2010 and of Antenna 3 with La Sexta in 2012 (to create Atresmedia).

The current government has been criticised in the Spanish press for favouring the two largest commercial broadcasters, Mediaset Espana and Atresmedia. The main criticism is based on the government’s intention to compensate the two groups for the loss of five channels in 2014, following a Supreme Court order. As a result of the Court’s decision, Atresmedia was forced to close three channels (Nitro, Xplora and La Sexta 3) while Mediaset Espana was requested to closed two (La Siete and Nueve). As Spain is heading for general elections in December 2015, the government has been accused of political manipulation of the awarding process, as a means of garnering favour in the two groups’ coverage of the electoral campaign.

Prisa and Vocento’s claims that Mediaset Espana and Atresmedia have established a duopoly in the Spanish free-to-air TV market are well-founded. According to IHS Advertising Intelligence data, the two groups controlled between 80% and 85% of TV advertising revenues between 2010 and 2015. They are also the dominant broadcasters on the DTT platform—with the two new HD channels, Mediaset Espana and Atresmedia will control 13 of the 21 national DTT channels (62%).

Spain’s DTT market continues to be tarnished by legal challenges, political manipulation and EU institutions’ (primarily courts) intervention, and further episodes in the long-running saga appear likely. 

 

Geography
Spain Western Europe
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