UK Digital TV Penetration Could Overtake Internet, Says ITC

The Commission’s latest multi-channel TV figures, covering Q4 and full-year 2002, show that 41.4% of UK households had a digital TV (DTV) system by the end of last year. This is the first time that penetration has exceeded 40%, says the ITC.

According to Q3 figures from the Office of National Statistics (ONS), approximately 46% of homes have access to the internet (see Home Internet Usage Still Growing). The ITC says that if growth rates are maintained – and terrestrial service Freeview continues to grow strongly – DTV could overtake internet access in the home.

Freeview had added 300,000 new digital terrestrial (DTT) homes to the total by the end of 2002, according to estimates, taking its total at that time to 1.3 million. More recent figures put the number of users at over 1.4 million (see DTV Europe Remains A ‘Distant Dream’, Says Screen Digest).

BSkyB’s digital satellite service added 227,000 subscribers in Q4, taking the total at year-end to 6.3 million.

Overall, multichannel penetration in the UK increased by 1.8% points. Including analogue services, overall multi-channel penetration is estimated to have increased to almost 46.8% or 11.5 million households.

The ITC says that by the end of this year it is likely that the majority of households in the UK will have access to more than the five terrestrial services.

UK TV Platform Subscriber Figures
	Q3 2002	Q4 2002	Quarterly growth rate
Pay TV
Analogue cable*	1,334,105	1,334,105	n/a
Digital cable*	2,044,085	2,044,085	n/a
Total cable	3,378,190	3,378,190	n/a
Digital DTH	6,062,548	6,290,000	3.8%
ADSL	16,699	12,152	2.4%
Total pay-TV households	9,457,437	9,680,342
Free-to-air (FTA)
FTA DTT	1,028,000	1,328,000	29.2%
FTA DTH (estimates)	546,875	558,592	2.1%
Total FTA households	1,574,875	1,886,592	19.8%
Total
Total UK multi-channel households	11,032,312	11,566,934	4.8%
Total UK digital households	9,698,207	10,232,829	5.5%
Multi-channel penetration	45.0%	46.8%	1.8% points
Digital penetration	39.5%	41.4%	1.8% points
*Telewest and NTL figures not yet available; ITC has assumed no change
Source: ITC, March 2003

Platforms BSkyB continues to dominate the multichannel market with an overall share of 59.2%, a marginal decrease from a share of 59.9% in Q3 (see UK Multi-Channel TV Sector Grows By 2.8% In Third Quarter). However, Sky increased its lead in the pay-TV market this quarter with a share of 65%.

Shares of the multi-channel TV market by platform are as shown.

As figures from NTL and Telewest are not yet available, an updated set of multi-channel figures will be released by the ITC following the release of the companies’ results.

Sky’s growth rates put it on target for reaching 7 million subscribers by December 2003. Customer retention was higher over Q4, with annualised churn rates falling from 9.6% in Q3 to 9.4% in Q4. This represents the lowest ever level of churn for Sky Digital.

DTH (BSkyB)
	Q2	Q3
 TV homes connected	6,062,548	6,290,000
 Digital TV homes connected	6,062,548	6,290,000
 ARPU	£348	£351
 Churn	9.6%	9.4%
 Base package price	£10	£10
Source: ITC, March 2003

Freeview added around 300,000 customers to its user base in Q4 – a quarter on quarter increase of 29.2%. The ITC estimates that sales of Freeview adapters accounted for about 90% of this growth, the remainder being DTT idTVs.

Freeview eclipsed ITV Digital’s performance during its first 16 weeks when a total of 110,000 subscribers signed up to the service – about 7,000 a week (see Freeview Customers Surpass ITV Digital’s Total).

DTT Trends
	Q3	Q4
 Digital TV Homes connected	1,028,000	1,328,000
 ITV Digital STB	600,000	600,000
 Other STB	120,000	390,000
 IDTV sets	308,000	338,000
Source: ITC, March 2003

For the Q3 2002 figures click UK Multi-Channel TV Sector Grows By 2.8% In Third Quarter.