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Management Functions

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Broadcasting, the transmission of information by radio or television, is a major factor affecting the television industry today. Broadcasting is currently achieved through analogue, a system that has existed since television began in the 1940's and 50's. "Analogue converts sound and pictures into waves, which are then transmitted through the air and picked up by our rooftops or indoor aerials." But, because of rapid technological advances in the modern era, analogue will soon be obsolete, and is presently in the process of being replaced by digital broadcasting, the new form of broadcasting that "turns pictures and sound into computer language, which changes one's television into a form of computer, so that it can connect to the Internet, take interactive programs, and carry many more channels," all of which cannot be accomplished through analogue. As modern technology grows, the television industry is introduced to major issues, such as low consumer confidence, analogue switch-off difficulties, and the lack of technical skills. And unless these problems are resolved soon, they will lead to the collapse of the television industry.

Lack of skills:

Concerns associated with employee technical skills is becoming very common in the digital TV industry. The industry fears that its employees may lack the advanced technical knowledge required for the future. Its major concern right now is to find the right people with the right skills to effectively implement future strategies. Digital TV companies must become much more competent, innovative and creative, which means that its employees must be willing to develop themselves and their company in order to sustain the industry. As many are aware, IT skills will be very essential to the well-being of the industry. Because a number of shoppers today are already purchasing products online - and Internet access via digital TV exists, advanced IT skills are definitely required for the future health of the digital TV industry. However, since the demand for specialist IT skills is increasing and the human resources are limited, there exists a shortfall - one that appears to worsen. It has been reported by e-commerce consultancy, Spectrum Strategy, that over 850,000 e-business jobs could be created in Britain by 2003. But unfortunately, due to skills shortages, the digital TV industry among other industries, is threatened to have one in ten vacancies unfilled.

Analogue Switch-Off:

To "keep up" with modern technology, the UK government strongly urged the country to convert from analogue to digital television sets. The government had some idea of a desired date for the television industry to complete its analogue switch-off, and stated that switch-off will occur when 70% of the population owns a digital television, which could take place between 2006 and 2010. This lack of clarity creates another factor in holding people back from understanding digital. Experts within the television industry indicated that once a definite switch-off date has been announced, the 70% target will be reached "quite quickly." The government has said that before switch-over can happen, 99.4% of the population must be covered by digital transmissions and that 95% of consumers must have access to digital equipment. However, previous estimates had predicted that the 70% target will be reached in 2015, at the earliest. And because there is a large number of confused customers, experts doubted that broadcasters would be able to switch to digital by 2006. As a matter of fact, recent research by the Consumers Association indicated that customer confusion is one reason why switch-over from analogue to digital by 2006 at the earliest, and 2010 at the latest, as specified by government regulations, is very unlikely to be. Research shows that while nearly half of Britain plans to convert to digital television within the next three years, 46% of the UK population admitted that they could not differentiate between digital and analogue. This is because they confuse digital TV with pay TV, believing that they must pay for their five channels once they convert. Another 38%, however, stated that they choose to buy a digital set when their current television no longer functions properly, while several other groups in UK believe that switch-off is decades away, and therefore, have no intention of purchasing a digital set anytime soon. These reasons are taken into consideration by the UK Government, resulting in its unwillingness to announce a fixed switch-off date. Consumer Confusion:Switching over to digital television is a major problem for several consumers in the UK. Unfortunately, this path taken by the television industry is filled with potholes of expensive equipment, cable incompatibility, and customer confusion, as many believe. One reason behind such lack of enthusiasm is certainly due to the cost of switching over: some people simply can't afford it, while others who could afford it prefer to spend their money on something else. In order for their analogue sets to be useful in the future, customers must purchase a digital decoder box to connect to their current sets. Such piece of equipment is very costly, which gives them reason to refuse to buy one. In fact, the cost of replacing all television sets in the UK with a decoder box or a digital television is approximately Ј8 billion. And, the price of a digital television set is currently over Ј1,000. Many consumers are also unenthusiastic towards digital TV due to their unwillingness to watch more channels. These people indicate that they feel accustomed and quite satisfied with the few channels they receive from their current television sets, causing them to hesitate purchasing a digital set.Consumer Confusion and ONDigital:

Even after digital television companies have experienced numerous combative advertising against their rivals, a high degree of public confusion over what digital television has to offer still remains in Britain. To deal with the issue, ONDigital has planned to somehow "teach" the public about the advantages of converting to digital TV. In order to make this possible, the company decided to discuss its plans with the British government. As a result, an British MP, Chris Smith, "addressed the Royal Television Society in Cambridge in September 1999," and "indicated that the Government would conduct a public information campaign, which would inform the public the benefits of digital television." However, such campaigns have not yet been put into effect, and ONDigital is strongly pushing the government to deal with the situation as soon as possible. In addition to its



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