Britain is leading the world in the development and adoption of digital television, with 34% of homes now subscribing to the platform, according to a new report from Screen Digest.
In the stronger digital markets it has been satellite rather than cable which has been the driving force behind DTV uptake, with customers enticed by the platform’s typical offering of premium sports and film channels. As a result, more than 99% of EU satellite TV households are now digital.
Growth in cable, after a strong start, has now stagnated, with cable operators lacking the funding and the inclination to upgrade their analogue subscribers to digital packages. Screen Digest also notes that the cable sector has been home to some of the year’s ‘worst corporate failures’ with NTL (see NTL Emerges From Bankruptcy) and UPC (see UPC On The Road To Recovery) both filing for bankruptcy.
“For many cable operators, TV now plays second or third fiddle to more profitable voice and broadband Internet services,” it says.
Looking ahead In Europe, Britain, France and Spain are leaving other countries behind in the DTV sector, with penetration in France at 17% and Spain at 18%. Europe’s digital ‘laggards’ include Germany, the Netherlands and Belgium, according to Screen Digest.
In Germany penetration is at just 6% of all TV homes and in the Netherlands it is lower still, at just 3%. This because the broad range of free-to-air channels and low-cost multi-channel packages in these two countries preclude any key incentive to take up digital TV.
“It is clear then that if talk of analogue switch off in the UK and France by 2010 seems optimistic, in Germany and the Netherlands, such talk should not even be on the agenda,” says the report.
The early success of digital terrestrial service Freeview in the UK – which now has over 1.4 million customers (see Freeview Customers Surpass ITV Digital’s Total) – is promising. Similar systems are now underway in France and Spain, but they will not work in countries where low-cost, multi-channel TV is already prevalent.
Guy Bisson, one of the authors of the report, says: “In many European countries, it will have to be accepted that free-to-air platforms offer the only route to full digital conversion. The UK is proving to be a test ground for such a service, but in countries such as Germany and the Netherlands, without a business model that will allow digital free-to-view services to work, the time frame to reach analogue switch off will remain a very long one.”
“A digital TV Europe remains a distant dream,” concludes Screen Digest.
Other forecasts UK forecasts from Merrill Lynch predict that digital penetration will only reach around 60% by 2010, well below the Government’s official target of 95% by this time (see Freeview Moves In On Multi-Channel Sector – Merrill Lynch Long-Term Forecasts).
BSkyB will continue to dominate the market, although Freeview is expected to make inroads on cable DTV, overtaking it in around 2009 with about 5.4 million users.
Datamonitor has forecast that DTV will reach 80 million European homes by 2007; this is over half the total TV market (see DTV In Half Of European Homes By 2007, Says Report).
