COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(92) 154 final 
Brussels, 5 May 1992 
Proposal for a 
COUNCIL DECISION 
ON AN ACTION PLAN FOR THE INTRODUCTION 
OF ADVANCED TELEVISION SERVICES 
IN EUROPE 
(presented by the Commission) 
CONTENTS 
A. Explanatory Memorandum 
1) Background and Strategic Context. 
2) The aim of the Proposal for a Decision and the Approach taken. 
3) Conclusion. 
B. Draft Proposal for a Council Decision on an Action Plan for the Introduction of 
Advanced Television Services in Europe 
C. Annex - Action Plan Objective and Summary 
1) Objective 
2) Approach adopted 
3) Outline Description of the Service Chain and Preliminary Identification of 
Potential Sources of Costs 
4) Targets to be Achieved 
5) The Funding Approach to be Adopted 
6) Indicative Internal Allocation of Funds 
7) Principles and Criteria for Implementation 

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A. EXPLANATORY MEMORANDUM 
1. BACKGROUND AND STRATEGIC CONTEXT 
On the lOth February 1991, the Council unanimously adopted a Common Position on 
a Council Directive on Standards for Satellite Broadcasting of Television Signals <*> 
following a proposal from the Commission. 
The main points of the Directive may be summarized as follows: 
i) only HD-MAC may be used for HDTV transmissions which are not fully digital; 
ii) only D2-MAC may be used for non-fully digital 625 line television transmissions 
by satellite in the 16:9 format; 
iii) all 16:9 television receivers must incorporate a D2-MAC decoder and all other 
television receiving equipment must incorporate at least a standardized socket; 
iv) provision is also made for the obligatory use of D2-MAC by 4:3 services starting 
after 1 January 1995, subject to the adoption by Council of a Commission 
proposal on financial support for such services. 
This Directive, which sets the regulatory environment of standards for satellite 
television broadcasting in Europe is one part of a two pronged approach by the 
Community to encourage the orderly transition in Europe to advanced television 
services including HDTV. 
The other element is an agreement, enshrined in a Memorandum of Understanding 
(MOU) between the involved economic actors in this field - broadcasters, equipment 
makers and cable and satellite operators - with a view to the provision in Europe of a 
wide range of advanced television services in the D2-MAC standard, particularly in its 
16:9 format, in the period to 1996. 
The strategic context is set by the recognition by the Community that it is in the best 
interests of the European consumers to follow a path toward HDTV based on the 
criteria of compatibility and evolution, together with the recognition that HD-MAC is 
the appropriate HDTV transmission standard in this regard and that D2-MAC offers 
the best available path towards the development of HDTV, with wide screen 16:9 D2-
MAC as the main step in this direction. 
During its meeting of 18 and 19 December 1991, the Council of Telecommunications 
Ministers, in giving its assent to the common position on the Directive, expressed its 
conviction that only a global strategy including accompanying measures together with 
appropriate financial means, will assure the success of European advanced television. 
In this connection the Council took note of the intention of the Commission to submit 
to it and to the European Parliament, at the latest by 30th of April 1992, a set of 
measures, financial and otherwise, on the basis of an appropriate article of the Treaty 
in order to attain the objectives announced in articles 2 and 8 of the Directive. 
<» OJ. 
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At the same meeting the Council invited the Commission to intensify its negotiations 
in relation to the MOU with a view to having its signature simultaneously with the 
final adoption of the Directive. 
Also, at the above meeting the Council invited the Commission to take, without delay, 
the necessary measures to facilitate the immediate implementation of the numerous 
initiatives which had already been announced for the satellite broadcasting of 
television programmes using D2-MAC 16:9. 
The European Parliament, in its deliberations on the proposal of the Commission for 
the Directive also expressed its clear conviction that accompanying financial measures 
would be required for the successful achievement of the objective. 
This present document incorporates a proposal for such a financial measure. 
2. THE AIM OF THE PROPOSAL FOR A DECISION AND THE APPROACH 
TAKEN 
Exhaustive consultations over an extended period of time with the concerned 
economic actors: the broadcasters, the equipment makers, the operators of cable and 
satellite infrastructure, and the programme makers, have identified a clear interest by 
many parties to move at the earliest time to the provision of advanced television 
services by satellite and cable in Europe using the D2-MAC standard, particularly in 
its 16:9 format, and the HD-MAC standard. 
The television service chain begins with origination and ends with reception by 
consumers on their receivers. It is a complicated chain involving many creative and 
technical operations and several different industries. The approach must treat the 
whole chain of operations, not individual functions out of context, because the 
consumer commits to the outcome of the whole process, rather than any individual 
aspect. This has led to the adoption of a service perspective, since services embody the 
sum of operations. A television service consists of a schedule of individual 
programmes under the editorial control of a broadcaster. 
2.1 Additional Costs 
The above mentioned consultations have identified the additional costs to the parties 
which would be involved in the provision of these advanced services particularly in the 
start-up phase. These costs include: 
i) Costs of Broadcaster's Operations including Studio Upgrading and Satellite 
Transmission. 
Broadcasters, who have not already done so, may need to upgrade their studio 
equipment to the requirements of the new service. 
Many operators, for commercial reasons, and in order to continue to serve their 
existing customers who have equipment working on another standard, will wish, 
at least for an initial period, to simulcast the advanced service in parallel with 
the conventional service. This will involve additional costs associated with 
satellite transmission. Other sources of additional costs include D2-MAC 
encoding and encryption, conditional access and subscriber management for 
subscription services. 
ii) Costs for Cable Redistribution. 
Operators of cable TV networks may wish to have the capability to offer 
advanced television services to their customers. In order for cable systems to 
use satellite received signals in this connection, the cable head-end must have 
additional equipment (per channel) which is capable of receiving the MAC 
satellite signal and transforming it in such a way as to be suitable for 
transmission through the cable network. Special facilities for decrypting, 
encrypting conditional access and subscriber management may also be required 
at the head-end. In addition certain upgrading of the cable network itself may 
be necessary in order to allow the 16:9 D2-MAC signals to be distributed to 
viewers. 
There may therefore be additional capital costs for cable operators wishing to 
offer the advanced television services to their subscribers. 
iii) Cost of Programme Production and Conversion. 
The advanced services are capable of offering enhanced picture and sound 
quality compared with conventional services as well as the new wide-screen 16:9 
format. In order to ensure that the full potential of the new system is realized 
therefore the advanced services will require to be fed with programme material 
of a higher quality in both picture and sound and in the new wide screen formal. 
In order to achieve this higher quality both for D2-MAC but more particularly 
for HD-MAC transmissions, both in-house and independent production will 
have to progressively upgrade, technically, over the coming decade, and 
programme production techniques will have to develop to take full advantage of 
the potential of the new technical possibilities. 
Programme makers and as a consequence broadcasters will therefore face 
increased costs, at least in the early stages, for original programme production 
or the conversion of existing material from another format. 
2.2 Proposed Approach 
The conclusion reached, following the above mentioned consultations, is that (Aim to 
the fact that the European television service provision industry is suffering significant 
financial pressures at the present time, the transition from conventional to advanced 
services is likely to happen only slowly in the absence of a measure of financial 
incentive to cushion the start-up costs. 
The proposal now made therefore in to adopt an Action Plan covering the period up 
to the end of 1996 and having the objective of accelerating the development of the 
market for advanced television services by satellite and cable based on the D2-MAC 
standard, particularly in its 16:9 format and the HD-MAC standard. Community 
funds, in the amount of 850 million ECU, would be made available to provide 
incentives for the achievement of this objective. 
The funds would be directed towards covering part of the costs identified above, 
namely: 
i) costs relating to broadcasters's operations including studio upgrading and 
satellite transmission 
ii) costs relating to cable redistribution 
iii) costs relating to programme production and conversion, and 
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The allocation of these funds will be governed by the principle of double degressivity in 
the following sense: 
a) In order to encourage the early start-up of the targeted advanced services, those 
projects starting earliest will receive the greatest levels of funding. 
b) In line with the policy that Community funding is to cushion the economic 
consequences in the start-up phase, the funding allocated to projects will be 
progressively reduced each year the incentive is in place. 
The Commission will be responsible for the execution of the Action Plan and for 
ensuring that Community funds are correctly spent and are directed effectively and 
efficiently towards the stated objective. 
In this connection the Commission will establish close collaboration with the structure 
resulting from the signing by the market actors of the Memorandum of 
Understanding. 
A set of general principles and criteria which must govern the implementation of the 
Action Plan are included in the Annex to ensure that relevant Community policies are 
followed. 
It has also been considered appropriate to specify, in advance, indicative targets for 
the impact of Community funds as a guide-line for the implementation. These targets 
which require the achievement by the end of 1996 of: 
i) a critical mass of satellite television services, using the D2-MAC standard, 
particularly in its 16:9 format, or the HD-MAC standard; 
ii) a significant and constantly increasing number of cable TV networks carrying 
high quality 16:9 D2-MAC services to their customers; 
iii) a significant and increasing volume of programming in the 16:9 format and with 
high technical quality both in picture and sound. Such programming to be 
broadcast in the above mentioned services; 
are considered to be achievable following the detailed consultations already 
conducted. 
CONCLUSION 
The attached Decision aims to prepare the way for the Europe-wide introduction of 
advanced television services during the next five years. The proposals are based on 
extensive dialogue with all the relevant actors in this field. The Council is invited to 
adopt the attached Proposal for a Decision. 
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B. PROPOSAL FOR A COUNCIL DECISION 
ON AN ACTION PLAN FOR THE INTRODUCTION 
OF ADVANCED TELEVISION SERVICES 
IN EUROPE 

PROPOSAL FOR A 
COUNCIL DECISION 
on an Action Plan for the Introduction 
of Advanced Television Services 
in Europe 
The Council of the European Communities, 
Having regard to the Treaty establishing the European Economic Community and in 
particular Article 235 thereof; 
Having regard to the proposal from the Commission; 
Having regard to the opinion of the European Parliament (*>; 
Having regard to the opinion of the Economic and Social Committee <2>; 
Whereas the Community, through Council Decision 89/337/EEC <3>, Council Decision 
89/630/EEC <4> and Council Directive <5> recognized the strategic importance of High 
Definition Television (HDTV) for the European Consumer Electronics Industry and for 
the European Television and film industries, and established the strategy framework for 
the introduction of European HDTV; 
Whereas Council Directive P> set a regulatory framework of standards for satellite 
television broadcasting including HDTV. 
Whereas it is in the best interest of European consumers to follow a path to HDTV, based 
on the criteria of compatibility and evolution, in order to avoid discontinuities and 
duplication of investments; 
Whereas HD-MAC, which has been chosen as the European transmission standard for non 
fully digital HDTV, conforms to those criteria of compatibility and evolution and D2-MAC 
offers the best available path towards the development of HDTV, with wide screen 16:9 
D2-MAC as the main step in that direction; 
Whereas article 8 of Council Directive 
 requires that that Directive be accompanied by 
commercial measures based on the signing, by the parties concerned, of a Memorandum of 
Understanding (MOU) coordinating the actions of the various signatories and where 
<» O.J. 
<2> OJ. 
<3> O J. N° L 142,25.5.89, p. 1 
<4> O J. N° L 363,13.12.89, p. 30 
<5> OJ. 
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appropriate by simultaneous measures designed to support the creation of a European 
market for the D2-MAC and HD-MAC standards; 
Whereas, following the widest possible consultation, a number of economic actors in the 
television service provision market intend to sign a Memorandum of Understanding in 
which they make commitments to offer advanced television services throughout Europe 
using D2-MAC in its 16:9 format; 
Whereas the objectives of the strategy for the introduction of HDTV in Europe are an 
integral part of the Community audiovisual policy and whereas they must take into account 
other objectives of this policy within the perspective of the development of Europe's 
audiovisual capacity, which comprise structural objectives such as the development of the 
independent production sector or the development of production in countries or regions 
with more limited audiovisual capacity; 
Whereas in order to ensure the introduction of European advanced television articles 2 and 
8 of Council Directive require a global strategy including accompaning measures 
together with appropriate financial means and measures to encourage the production of 
programmes; 
Whereas financial incentives are initially required to ensure the accelerated development 
of the advanced television service market in conformity with the strategy indicated above, 
by contributing to the reduction of the additional start-up costs involved; 
Whereas it is appropriate to set targets for the impact of Community funding of the early 
market development of advanced television services; 
Whereas it is appropriate to specify certain basic principles which must underlie the 
implementation of the Action Plan including criteria to be used in the selection of projects; 
Whereas the Treaty does not provide, for the action concerned, powers other than those of 
Article 235; 
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HAS DECIDED AS FOLLOWS: 
Article 1 
An Action Plan to ensure the accelerated development of the market for advanced 
television services by satellite and cable based on the D2-MAC standard, particularly in its 
16:9 format, and the HD-MAC standard, is adopted for a period commencing on the date 
of adoption of this decision and concluding on 31st December 1996. 
The targets set for the Action Plan are the achievement during the period mentioned above 
of: 
i) A critical mass of satellite television services, using the D2-MAC standard, 
particularly in its 16:9 format, or the HD-MAC standard. 
ii) A significant and constantly increasing number of cable TV networks carrying high 
quality 16:9 D2-MAC services to their customers. 
iii) A significant and increasing volume of programming in the 16:9 format and with high 
technical quality both in picture and sound. Such programming to be broadcast in the 
above mentioned services. 
Community funds will be directed towards the achievement of these targets by means of 
incentives covering parts of the additional costs incurred by broadcasters, programme 
makers and cable TV network operators, in the provision of the above mentioned advanced 
television services. 
A summary of the Action Plan and its implementation procedures is set out in the Annex 
which forms an integral part of this Decision. 
Article 2 
1. The execution of the Action Plan will be undertaken by the Commission. In this 
connection the Commission will establish close collaboration with the mechanisms 
resulting from the implementation of Article 8 of Council Directive <n. 
2. Basic principles which must govern the implementation of the Action Plan including 
criteria to be used in the selection of projects are given in the Annex which forms an 
integral part of this Decision. 
3. The Commission shall ensure, by means of appropriate control mechanisms, that the 
Community funds are properly allocated and are used to achieve Community 
objectives as specified in this Action Plan. 
<» OJ. 
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Article 3 
An annual report will be submitted by the Commission to the European Parliament, to the 
Council and to the Economic and Social Committee, evaluating the implementation of the 
Action Plan and the allocation of Community funds. 
A final report, in the same terms, will be submitted to the above institutions at the 
conclusion of the Action Plan. 
Done in Brussels, (date) 
For the Council 
The President 
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C. ANNEX - SUMMARY OF THE ACTION PLAN AND ITS IMPLEMENTATION 
PROCEDURES 
1. OBJECTIVE 
The objective of the Action Plan is to ensure the accelerated development of the 
market for advanced satellite and cable television services in Europe using the D2-
MAC standard, particularly in its 16:9 format, and the HD-MAC standard. 
2. APPROACH ADOPTED 
i) Accelerated development of the market for advanced satellite and cable 
television services requires that all the elements necessary to bring those 
services into consumers' or viewers' homes be in place. Television is a 
complicated medium, encompassing and merging many technical and creative 
functions, with both and cultural and commercial outcomes. Its functions are 
controlled by different sectors within the audiovisual, telecommunications or 
electronics industries. Their endeavours form a service chain stretching from 
origination to the receiver in the home. 
Consumer commitment - whether of time or financial resources - is not to any 
of these individual functions or to the industries that support them, but to the 
end result, the services that are made possible by the chain of operations. These 
will be of different types, in the case of a general interest service, or of similar 
type if the service is a specialised, thematic one. They may be funded in 
different ways: by licence fee, advertising or by subscription. 
The approach for accelerating the development of the market for advanced 
satellite and cable television services must therefore have a service focus. It 
would be misguided to adopt a piecemeal approach, addressing individual parts 
of the television service chain independently in ad hoc style. They must all be 
addressed within a service perspective; this will condition the approach adopted 
in the Action Plan. 
ii) Proposals will be sought for offers to provide on the market television services 
in the D2-MAC standard, especially its 16:9 format, or the HD-MAC standard. 
To validate the service approach, proposals must include all the elements in the 
service chain necessary to reach the consumer. They should embrace the 
following: satellite distribution means; cable distribution means (if necessary); 
access to suitable programme material and receiver availability in the target 
market. Proposals will therefore be integral service projects where all these 
aspects have been taken into account. 
It is expected that each service proposal would be presented by a project 
consortium and led by a broadcaster, since broadcasters have editorial control 
over services. Consortia would include some or all of the following actors: 
satellite operators; cable television network operators; equipment 
manufacturers. 
Members of a consortium would be expected to have signed a project contract 
between themselves to provide the proposed service, subject to the availability 
of Community funds. The acquisition or commissioning of programmes from 
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sources independent of the project broadcaster will be the object of separate 
contracts between that broadcaster and the programme maker or rights holder. 
3. OUTLINE DESCRIPTION OF THE SERVICE CHAIN AND PRELIMINARY 
IDENTIFICATION OF POTENTIAL SOURCES OF COSTS 
The introduction of advanced satellite and cable television services will impose 
additional costs upon participants along the Service Chain. Many of these costs relate 
to transition. For instance, broadcasters may for commercial reasons need to 
simulcast the advanced service in parallel with the conventional 4:3 PAL or SECAM 
service in the early stages of market development. Programme production may 
initially take longer or become more complicated, until staff adjust and improved 
equipment reaches the market. Despite their transitory nature, these costs are 
significant because they hold back market development. The costs have a collective 
dimension because of the complexity and interdependence implicit in the Service 
Chain. 
The Service Chain and potential sources of additional costs are described under three 
general headings: 
1. Broadcaster's operations including studio upgrading and satellite transmission 
2. Cable redistribution 
3. Programme production and conversion. 
3.1 Broadcaster's Operations including studio upgrading and satellite transmission 
In order to provide a broadcast service, the broadcaster needs to put together a 
schedule of programmes. These programmes may be produced in-house or 
commissioned or acquired externally (see section 3.3 below). For in-house production, 
the broadcaster may decide (if it has not already been done) to upgrade his studio to 
work in components (either analogue or digital). Furthermore he may wish to upgrade 
his equipment including cameras, recorders, telecines, etc., to cope with 16:9 D2-MAC 
requirements. 
He may in addition wish to upgrade, to a dual aspect ratio environment, his signal 
processing and post production equipment such as vision mixing, special effects, 
editing equipment, "pan and scan" facilities (to derive 4:3 from 16:9), standards 
conversion equipment, etc.. 
Although there may well be "learning" costs due to the change of production practices 
in the transition from a 4:3 to a 16:9 environment, the broadcaster may find that once 
the necessary capital investment has been made, his actual costs per programme for 
in-house production are no higher than for a PAL 4:3 service. This situation is 
however unlike to remain valid for HD-MAC services where the much higher picture 
quality levels will impose additional production costs. 
Assuming the existence of a programme, either live or recorded, this section describes 
the additional processes the broadcaster and other relevant actor must employ in 
delivering it to the viewer. 
i) The signal must be encoded in D2-MAC using a dedicated encoder before 
transmission. 
ii) If necessary, for instance in the case of a subscription service, the signal is to be 
encrypted. This will occur at the encoder. 
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This encoder/encrypter may be located either adjacent to the broadcaster's 
studios or at the satellite uplink station depending on practice. 
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The acquisition of an encoder/encrypter (per channel) is a necessary cost 
entailed in the broadcasting of D2-MAC services. 
For HD-MAC services HD-MAC encoders/encrypters will similarly be 
required. 
iii) Regardless of where the encoder is located, in the case of distribution by 
satellite, there will be costs incurred by the broadcaster in transporting the 
signal from the studio to the satellite uplinking station and for uplinking it to 
the satellite. Where the signal is to be distributed directly to the viewer by cable 
without the intermediate use of a satellite, these costs are for the transport 
between the studio and the cable head-end. 
iv) In the case of satellite distribution the next step is the access to a satellite 
transponder capable of delivering the uplinked signal either direct to the 
viewer's home for a DTH (direct to the home) service and/or to the cable head-
ends for cable redistribution to the viewer's home. The cost incurred is the 
rental of a satellite transponder. 
v) Assuming that he is not already equipped to receive satellite television, the 
viewer will have to acquire a suitable dish antenna to receive the 16:9 D2-MAC 
services. He will also require either an add-on satellite tuner to convert the 
signals into a form that his existing 4:3 TV set can display or a new 16:9 TV set 
that is already suitable for DTH satellite reception. In both cases, decryption 
facilities and possibly other new consumer equipment (e.g. a VCR) may also be 
needed. 
3.2 Cable Re-distribution 
Cable systems can receive D2-MAC signals at their head-ends either from satellites or 
in some cases directly from the broadcasters' studios. 
i) In order for a cable system to distribute a signal broadcast by satellite to its 
subscribers, the satellite signal will have to be received by a satellite dish at the 
cable head-end and normally demodulated from F.M., which is the modulation 
system used in the satellite links, and subsequently remodulated to A.M. which 
is normally used on cable networks. In addition, depending on practice, it may 
be necessary to decrypt and reencrypt a received encrypted signal prior to 
transmission through the cable. There may also be a requirement for 
conditional access/subscriber management system at the cable head-end. The 
acquisition of the necessary head-end equipment required to perform the above 
tasks will be a cost to the cable operator. 
ii) Even when the television signals at the head-end (whether they come directly 
from the studio or via satellite), are prepared for distribution through the cable, 
there may be a requirement for reconfiguring the cable system itself in order to 
distribute the signals. This requirement, if any, will vary from cable system to 
cable system depending on the practices in operation and the technology used 
in the system. The costs of such reconfiguration, necessarily incurred in order to 
distribute the D2-MAC signal, will correspondingly vary. 
iii) The subscribers to cable TV networks distributing D2-MAC 16:9 signals will 
have to acquire either an add-on adapter to convert these signals into a form 
that their existing 4:3 TV set can display or a new 16:9 TV set that already has 
an input suitable for these signals. In both cases, decryption facilities and 
possibly other new consumer equipment (e.g. a VCR) may also be needed. 
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3.3 Programme Production and Conversion 
The broadcaster assembles a schedule of programmes to provide a service. This will 
consist of programmes produced in-house, using the broadcaster's own facilities and 
programmes sourced externally. Externally produced programmes may be simple 
acquisitions of finished programmes or new programmes commissioned by the 
broadcaster. 
All broadcasters will draw on these programme sources, with wide variation in the 
balance between internal and external sources. Completing a programme schedule 
suitable for a 16:9 D2-MAC service will present different cost implications to the 
broadcaster, depending on whether the programme is produced in-house or sourced 
externally. 
3.3.1 Existing Programmes 
Broadcasters will have access to certain existing programmes which are already in a 
form suitable for a high quality 16:9 D2-MAC (e.g. post-1952 feature films made after 
effective introduction of wide screen aspect ratios in the cinema). 
The additional costs relate to copying the production in the 16:9 format on to video 
tape using a telecine machine (this is known as the "re-mastering" process). 
3.3.2 New Programmes from External Sources 
Where a broadcaster commissions an external (independent) programme maker to 
produce a programme, there will initially be some additional costs incurred by 
producing that programme in 16:9 and to a higher technical quality specifications. 
These will be transitional and relate to production techniques and practices, currently 
adapted to 4:3 production and exploitation. 
3.3.3 New Programmes Produced In-house 
A broadcaster wanting to produce programmes in-house may, depending on the 
sophistication of his studio equipment, incur additional costs as above, on a 
programme by programme basis. 
3.4 Framework Conditions 
It should be emphasized at this point that nothing in the above description of the 
Service Chain, including its production element, should be taken as implying a prior 
preference, in the context of the Action Plan, between options available to 
broadcasters. Broadcasters must themselves, in preparing projects to be incorporated 
into the Action Plan, take their own decisions on the matter in the light of their own 
perception of requirements. There will, of course, be requirements of the Action Plan 
itself, apart from the overriding objective of launching a significant number of new 
advanced services. These include: a high and growing amount of 16:9 programmes per 
service, and high technical quality of picture and sound. But how the broadcasters 
achieve this is left to them. 
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TARGETS TO BE ACHIEVED 
In the context of the objective stated in paragraph 1 above, it is appropriate to set 
indicative targets for the impact of the Community funding which will be used to 
accelerate the market development, as follows: 
the achievement during the life of the Action Plan of: 
i) A critical mass of satellite television services, using the D2-MAC standard, 
particularly in its 16:9 format, or the HD-MAC standard. 
ii) A significant and constantly increasing number of cable TV networks carrying 
high quality 16:9 D2-MAC services to their customers. 
iii) A significant and increasing volume of programming in the 16:9 format and with 
high technical quality both in picture and sound. Such programming to be 
broadcast in the above mentioned services. 
5. THE FUNDING APPROACH TO BE ADOPTED 
i) The funding will go to projects which will provide a complete service as 
described in section 2 above. In other words, it is not intended to fund, 
separately, individual elements of the Service Chain in the case where such 
elements are not an integral part of the complete chain. 
ii) No funding will be made available for consumer equipment, either for satellite 
or cable reception. This is a matter for the market and it will be in the interests 
of equipment makers themselves to price their offerings sufficiently attractively 
to stimulate consumer demand. 
iii) In relation to cable TV networks, the most obviously fundable element is the 
necessary head-end equipment as described in section 3.2 above. Certain other 
elements of cost in the reconfiguring of networks may also be included in the 
scope of the Action Plan provided that such investments are : 
a) cost effective 
b) specifically required for the targeted advanced service, and 
c) where the impact of such investments is judged to be of major importance to 
the achievement of the Action Plan objective 
iv) Broadcaster's costs as indicated in section 3.1 above and including 
encoding/encryption, signal transport and up-linking and satellite transponder 
rental, are, in principle, included in the scope of the Action Plan. The amounts 
paid will be a portion of the costs, additionally incurred by broadcasters 
providing the advanced services. 
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v) In the case of in-house programme production it should be emphasized that 
whereas the complete re-equipping of television studios is not included in the 
objectives of the Action Plan, nevertheless, certain studio investments could be 
within its scope provided that they are : 
a) cost effective 
b) specifically required by the broadcaster providing the advanced services for 
the purpose of such service provision. 
c) where the impact of such investment is judged to be of major importance to 
the achievement of the Action Plan objectives. 
Broadcasters with plans for in-house production who choose to seek 
Community funds for the upgrading of their studio facilities to 16:9 working 
must recognize that this choice will limit their scope to be funded for making 
individual programmes. 
vi) Concerning independent producers, the aim is to ensure they can respond 
adequately to broadcasters' requirements for a wide range of attractive 
programmes in adequate volume, made to the appropriate technical quality. 
Independent producers will in many cases incur additional costs to meet the 
broadcasters' requirements for quality and format. These additional costs are 
within the scope of the Action Plan and a portion of such costs may be 
reimbursed. 
Some existing television programmes and most feature films are exploitable in 
16:9 but are currently available only in 4:3 versions. These must be converted to 
16:9 if they are to be acquired for widescreen D2-MAC transmissions by 
broadcasters. These additional costs are within the scope of the Action Plan and 
a portion of such costs may be reimbursed either to the rights holder, if he 
undertakes the task, or to the broadcaster. 
vii) Summarizing the above, the broad areas at which Community funding will be 
targeted are identified to be: 
a) Broadcaster's operations including studio upgrading and satellite 
transmission 
b) Cable Redistribution 
c) Programme Production and Conversion 
viii) The allocation of these funds will be governed by the principle of double 
degressivity in the following sense: 
a) In order to encourage the early start-up of the targeted advanced services, 
those projects starting earliest will receive the greatest levels of funding. 
b) In line with the policy that Community funding is to cushion the economic 
consequences in the start-up phase, the funding allocated to projects will be 
progressively reduced each year the incentive is in place. 
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6. INDICATIVE INTERNAL ALLOCATION OF FUNDS 
The indicative percentage breakdown of Community funding is as follows: 
i) Broadcaster's operations including 
studio upgrading and satellite transmission 60 - 70 % 
ii) Cable Redistribution 5 -15 % 
iii) Programme Production and Conversion 25 % 
It is intended to retain a certain level of flexibility to vary these percentages should the 
requirements of the Action Plan, as it evolves, dictate it. 
7. PRINCIPLES AND CRITERIA FOR IMPLEMENTATION 
Project proposals will be evaluated using procedures with an independent element 
which will take account, inter alia, of the following general and specific conditions. 
7.1. General Principles - Equitable Distribution 
The set of successful projects must: 
i) show a spread of projects between entities to avoid undue concentration or the 
creation of monopolies or cartels; 
ii) have a wide geographic distribution in order to ensure the Community 
dimension; 
iii) involve, to a reasonable degree, programme producers independent of the 
broadcasters in the projects; 
iv) comply with Community competition rules. 
7.2. Specific Criteria for Selection 
Other things being equal, priority for Community funds should be given to 
commercially viable projects which fulfil the following criteria: 
i) a high percentage of 16:9 content; 
ii) a large audience; 
iii) high technical quality levels; 
iv) scope for transfrontier services; 
v) scope for the reasonable involvement of programme producers independent of 
the broadcasters. 
- 19-
7.3 Criteria for Programme Support 
Both in-house production by broadcasters and external production are within the 
scope of the Action Plan. 
Community support for programme production and conversion will be closely linked 
to the new 16:9 services, but able to benefit the whole sector. 
To qualify for Community support on a programme by programme basis, producers of 
new programmes, and rights holders of certain existing programmes exploitable in 
16:9 but requiring re-mastering, must have an order for the programme from at least 
one of the broadcasters involved in implementing the Action Plan, who undertakes to 
broadcast the programme in 16:9 D2-MAC or HD-MAC. The technical quality of 
these programmes must be such as to allow their exploitation in 16:9 D2-MAC 
services in the short term and also in HD-MAC services in the medium term. 
Flexible mechanisms will be set up to respond to the specific needs of different kinds 
of programmes, including additional production costs for "stock" programmes with an 
extended life (e.g. drama series; cultural events etc.) and conversion or remastering of 
existing programmes exploitable in 16:9. 
These will be open mechanisms which will operate on the general criteria set out 
above together with specialised selection and funding criteria for each mechanism. 
The detail of these specialist criteria remains to be developed and will be published in 
the Official Journal within three months of the adoption of the present decision. They 
will function automatically and without any value judgements on the creative 
approach. Nothing in this Action Plan shall interfere with normal relationships 
prevailing between broadcasters and external rights holders on these matters. 
FINANCIAL STATEMENT 
FINANCIAL IMPLICATIONS 
Hlk: HDTV - Action Plan for the introduction of 
advanced television services in Europe. 
Budget article B6-8105 (part of) 
B6-8106 
B3-3 
Part A 
3. Legal basis: Article 235 of EEC Treaty 
4. Description 
4.1. Objectives 
The objective of the Action Plan is to ensure the accelerated development of the market for advanced TV 
services by satellite and cable based on the D2-MAC standard, particularly in its 16:9 format and the 
HD-MAC standard. Community funds will contribute within the period up to the end of 1996 to 
achieve the rapid transition from conventional services to a fully functioning market for advanced TV 
services by covering parts of the additional costs incurred by broadcasters, programme makers and cable 
TV network operators in the provision of these advanced TV services. 
The general targets set for the Action Plan are the achievement during the above-mentioned period of: 
i) A critical mass of satellite television services, using the D2-MAC standard, particularly in its 
16:9 format, or the HD-MAC standard. 
ii) A significant and constantly increasing number of cable TV networks carrying high quality 16:9 
D2-MAC services to their customers. 
iii) A significant and increasing volume of programming in the 16:9 format and with high technical 
quality both in picture and sound. Such programming to be broadcast in the above mentioned 
services. 
The quantitative targets set per annum are 
1. Cumulative number of services 
by the end of each year 
2. Cumulative hours of supported programming 
by the end of each year 1993 
15 
8,000 1994 
20 
15,500 1995 
25 
22,000 1996 
30 
26,000 
The notion of a critical mass of services as mentioned above relates to the point in the market development 
from which one may expect rapid self sustaining growth. It is estimated that 15 services with wide audience 
potential could provide such a critical mass. 
4.2. Duration : From adoption of the present Decision to end of 1996. 
4.3. Economic operators (to whom the funds are directed) 
Exhaustive consultations over an extended period of time with a number of economic actors in the 
television service provision market - broadcasters, equipment and programme makers, cable and satellite 
operators - have identified additional costs to those parties which could be involved in the provision of 
these advanced services based on D2-MAC, particularly in its 16:9 format and HD-MAC. 
5. Classification of expenditure 
5.1. Non compulsory expenditure (NCE) 
5.2. Dissociated appropriations (DA) 
6. Nature of expenditure 
6.1. Cofinancing 
Community financial incentives are intended to ensure the accelerated development of the advanced 
television service market in conformity with the strategy set out in the Council Decision, by contributing 
to the reduction of the additional start-up costs involved. In other words, Community funding will 
compensate a part of the additional costs incurred by the concerned economic actors to achieve this rapid 
transition from conventional services to the advanced television services, using D2-MAC, particularly in 
its 16:9 format and HD-MAC. 
The economic operators launching new services will make large investments and will carry the entire 
commercial risks associated. The philosophy governing Community financial involvement relates to 
covering part of the additional costs incurred in connection with the new services, up to a ceiling per 
area of expenditure (see 7.2 below). Ceilings are judged to be more appropriate than percentages due to 
the wide variation of potential costs which in many cases could greatly exceed the Community resources 
available. Furthermore, the principle of double degressivity (see 7.1. below) will ensure that these 
ceilings will progressively be reduced each year. 
It will be ensured that in each contract covering a project the amount of Community fundings will be 
clearly established together with the contribution of the project members in order to provide an adequate 
basis for effective financial control. 
-3-
7. Estimate of financial implications and method of calculation 
7.1. The Action Plan governing the allocation of Community funding is set for a period commencing on the 
date of adoption of this Decision and concluding on 31st December 1996. Community funds during this 
period amount to 850 MECUS. 
Broad areas at which Community funding will be targeted are identified to be : 
(a) Broadcasters operations including studio upgrading and satellite transmission 
(b) Cable redistribution 
(c) Programme production and conversion 
The allocation of the funding will be governed by the principle of double degressivity in the following 
sense : 
a) In order to encourage the early start-up of the targeted advanced services, these projects starting 
earliest will receive the greatest level of funding. 
b) In line with the policy that Community funding is to cushion the economic consequences in the 
start-up phase, the funding allocated to projects will be progressively reduced each year the 
incentive is in place. 
7.2. Indicative internal allocation of funds 
a) Because of the expected great variation in requirements from project to project it is impossible to be 
definitive as to the necessary Community contribution required to meet the objective. The following 
table provides an estimate of the ceilings for the Commission contribution to each element of cost 
identified. 
AVERAGE UNIT COSTS FOR COMMUNITY 
FINANCE 
Studio upgrading (MECU) 
Transponder cost/year (MECU) 
Cable network upgrading (KECU) 1992 
3 
2,5 
50/ 
500 1993 
3 
6 
50/ 
500 1994 
3 
5 
40/ 
400 1995 
2 
5 
40/ 
400 1996 
2 
4 
30/ 
300 
The wide range indicated with respect to cable is a reflection of the very large variation between different 
cable systems. 
-4 
For the programming element the following average lump sum support is relevant. 
KEY FOR COMMUNITY FINANCE 
16:9 Production/hour (KECU) 
Programme conversion/hour (KECU) 1992 
40 
2.2 1993 
35 
1.9 1994 
25 
1.5 1995 
22 
1 1996 
18 
1 
b) Taking into account the quantitative targets set out in section 4.1. above and the ceilings identified 
in 7.2 a), together with the operation of the double degressivity principle the indicative 
breakdown of the Community funding for the period of the Action Plan, in MECUS is : 
1992 : 33 (B6-8105 part of) presently in reserve BO-40 
1993 : 145 (B6-8106) + 32.5 (B3-3) » 177.5 
1994 : 175 (Bo-8106)^ + 70 (B3-3) = 245 
1995 : 150 (Bo-SlOep + 59.5 (B3-3) = 209.5 
1996 : 131 (B6-8106y) + 54 (B3-3) = 185 
A detailed breakdown is given in Tables 1 and 2 below. 
c) Indicative percentage breakdown of Community funding between the areas : 
i) Broadcasters operations including studio upgrading 
and satellite transmission : 60 - 70 % 
ii) Cable redistribution : 5 - 15 % 
iii) Programme acquisition and production : 25 % 
<*> This activity must clearly be integrated into the Fourth Framework Programme in principle from 1994 as laid down in the 
communication from the Commission to the Council and the European Parliament : "Research after Maastricht : an Assessment. 
A Strategy" (DOC.SEC.(92)682 final, para 155). 
ACTION PLAN FOR THE INTRODUCTION OF ADVANCED TELEVISION SERVICES IN EUROPE 
Detailed quantitative targets and Community Support 
Broadcasting 
1. Transmission 
Cumulative number of Channels 
MECU 
2. Studio upgrades 
Studios 
MECU 
Production (Hours supported) 
3. Production of programmes 
4. Conversion of programmes 
MECU 
Retransmission 
5. Cable networks 
MECU 
TOTAL 1992 
10 
25 
1820 
1820 
4 
4 
33 1993 
15 
90 
8 
24 
6150 
630 
5520 
32.5 
30 
176.5 1994 
20 
100 
10 
30 
7580 
2580 
5000 
70 
45 
245 1995 
25 
125 
2 
6 
6520 
2520 
4000 
59.5 
19 
209.5 1996 
30 
120 
~ 
3950 
2950 
1000 
54 
12 
186 Subtotal 
460 
60 
193 
27 Total 
520 
220 
110 
850 
Table 1 
This table shows the result of a scenario developed in order to evaluate the financial needs for the Action Plan. Most of the figures represent average 
estimations and forecasts that may vary widely depending on the type of project and the evolution of the market. For this reason these figures are to be seen 
as purely indicative and should not be interpreted as constituting a commitment of the Commission. 
-6-
DETAILED BREAKDOWN OF PROGRAMME ELEMENT 
REFORMATTING : 
Standard amount (ECU/hr) 
Hours supported 
Hours required (15 services) 
Percentage requirements covered 
Budget expenditure (MECU) 
NEW PRODUCTS: 
Standard amount (KECU/hr) 
Hours supported 
Hours required (15 services) 
Percentage requirements covered 
Budget expenditure (MECU) 
TOTALS : 
Hours supported 
Hours required (15 services) 
Percentage requirements covered 
Budget expenditure 1st year 
2200 
1820 
4250 
43 
4 
700 
0 
0 
1820 
4950 
37 
4 2nd year 
1900 
5520 
8000 
70 
10,5 
35 
630 
3400 
19 
22 
6150 
11400 
54 
32,5 3rd year 
1500 
5000 
7000 
71 
7,5 
25 
2580 
7770 
33 
62,5 
7580 
14770 
51 
70 4th year 
1000 
4000 
4900 
82 
4 
22 
2520 
11600 
22 
55,5 
6520 
16500 
40 
59,5 5th year 
1000 
1000 
1600 
62 
1 
18 
2950 
13800 
21 
53 
3950 
15400 
26 
54 Total 
17390 
25750 
67 
27 
8680 
37270 > 
23 
193 
26070 
63020 
41 
220 
Table 2 
-7-
7.3. Commitments of the Economic Operators (as entered into in the Memorandum of Understanding) 
i) Commitments of Broadcasters 
To launch on the market one or more television services using the D2-MAC standard, 
particularly in its 16:9 format, or the HD-MAC standard, in conformity with 
Community policy. 
Ensure that where software is available in 16:9 (tape or film), broadcasts of this software 
shall, to the greatest extent practicable, be in 16:9 D2-MAC format. 
Ensure full exploitation in 16:9 D2-MAC of suitable existing programme material. 
Produce programmes or have programmes produced suitable for 16:9 D2-MAC 
broadcasts. 
ii) Commitments of Industrial Manufacturing Companies 
Ensure the availability in the market of 16:9 D2-MAC receivers at such times and in 
sufficient quantities in order to meet the requirements of the new services. 
Ensure continued compatibility with existing transmission standards of the 16:9 D2-
MAC receivers distributed. 
Ensure improved availability of programme production equipment suitable for 16:9 D2-
MAC format. 
iii) Commitments of Satellite Operators 
Make available, on an equitable basis, transponder capacity according to the needs of the 
Broadcasters for their 16:9 D2-MAC services. 
iv) Commitments of Cable Network Operators 
Retransmit to subscribers 16:9 D2-MAC originated programmes in the 16:9 D2-MAC format. 
8. Type of Control 
The Commission will be responsible for the execution of the Action Plan. It will be assisted in this regard on 
the technical aspects by the experts group mentioned in part 3 section 3.2 ii). The administrative aspects will 
be controlled by the administration departments of DG XIII and DG X. 

ISSN 0254-1475 
COM(92) 154 final 
DOCUMENTS 
EN 15 
Catalogue number: CB-CO-92-210-EN-C 
ISBN 92-77-44006-6 
Office for Official Publications of the European Communities 
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