“Governments and public broadcasters across the EU remain gung-ho about the public utility and commercial prospects of DTT,” said Forrester analyst Hellen K. Omwando. “Compared with cable and satellite, the limitations of DTT have always been known, but not acknowledged.”
Based on current prognoses, Forrester predicts that DTT will be in only 11% of European homes by 2007. The report suggests that even this forecast may be optimistic as making money from the medium is proving to be somewhat problematic. However, the author does not believe that forcing consumers to take digital TV is necessarily the answer.
Misguided strategies? The UK government is committed to turning off the analogue signal by the end of this decade but Omwando believes that such measures are too draconian. In particular, she points out that consumers will be aggrieved at having to shell out for a set-top box when they can currently view terrestrial channels without one. A number of research companies including the Yankee Group have already predicted that analogue switch-off dates will have to be pushed back (see DTT To Learn From Setbacks, Says Yankee Group).
Freeview, the DTT service from BBC and BSkyB launches later this month (see One In Four Households Will Not Receive Freeview) but the report is sceptical about free and low cost services, claiming that they lack an operator business model. On the other hand, interactivity is regarded as too expensive to help DTT retain customers.
The way ahead, the author says, is for governments to withdraw digital audio broadcasting (DAB) and refrain from pushing DTT to the disadvantage of commercial platforms. It is felt that market forces alone will encourage consumer take up and make top level interference and a switch-off deadline unnecessary.
“Europe’s governments simply cannot justify funding DTT and bringing unfair competition into a market where highly leveraged commercial operators like Canal Satellite are struggling to survive,” Omwando promulgated. “Just as the average price of DVD players has dropped by 70% in the past five years, set-top box prices will fall in the next few years. This in itself will spur consumer adoption of digital TV.”
