UK Only Country In Europe With Over 50% DTV Services
The UK remains the only country in Europe with over 50% of households having digital television services, according to a report just published by independent market analyst Datamonitor.
The report says that the continuing success of BSkyB’s satellite platform and the expected strong uptake of the Freeview DTT (Digital Terrestrial Television) service will drive uptake. Datamonitor expects Freeview to become the largest digital platform in the UK by 2008.
It also says that the recent merger of cable operators NTL and Telewest will also act to provide greater impetus to digital cable development.
However, recent reports have said that NTL could face a £10 million bid from private equity firms, having seen its share price plummet in recent months.
Datamonitor adds that so far over 100 million households across Europe and the US have moved from analogue to digital services, although penetration between individual countries continues to vary significantly.
For example, Germany is expected to remain behind other major European markets, with only around 50% of TV households digital by the end of 2010.
Meanwhile, Datamonitor expects there to be 9.5 million IPTV subscribers across Europe by the end of 2010, with fewer than 9% of digital households connected by this means.
France will account for around 28% of households subscribing to IPTV services in Europe by the end of 2010, with market conditions making it an attractive prospect for IPTV provision.
However, Datamonitor says that the US will be a more challenging market for IPTV, with uptake limited to around 6 million households by the close of the decade.
Adrian Drozd, senior media & broadcasting analyst and author of the Datamonitor study, said: “IPTV is primarily a defensive move by the major service providers rolling out services. While they have the potential to generate additional revenues for operators, the key driver of deployment, in the short term at least, will be improving customer loyalty and adding greater depth to the services provided to consumers over ADSL networks.
“In some cases, IPTV may prove to be a financial loss leader, albeit an essential one if telcos are to retain a significant position with regard to provision of consumer communication and entertainment services.”
Moving on to PVR, Datamonitor says that the rollout of PVR services is central to pay-TV operators’ strategy of increasing ARPU and driving subscriber loyalty.
PVR uptake though, has been disappointing outside of the US and, to a lesser extent, the UK, with PVR penetration only reaching significant levels (18%) in the US.
Fewer than 2% of European households will have a PVR by the end of 2006, which leads Datamonitor to say that the true impact of PVRs may not be felt for some time.
Recent research from Magna Global said that by 2010 there will be 34 million digital video recorder (DVR) subscribers (29.5% of households) in the US, up from 13.5 million (12.3% of TV households) at the end of the first quarter of 2006 (see US VOD And DVR Households To Increase By 2010).
With HD, the market analyst says that steady adoption should be expected over the next two years, with the US market already three years ahead of Europe. Almost 20% of US households owned an HD capable HDTV by the end of 2005, whilst in contrast there were only around 2 million HD ready households in Europe at the same time.
A recent study from In-Stat said that the number of households with HDTV service will grow from 15 million in mid-2006 to 20.3 million at the end of 2006 (see HDTV Households To Reach 20 Million By End Of 2006).