European Analogue TV Switch-Off Unlikely Before 2015

In a new report on the European digital terrestrial television (DTT) market, the broker says that take-up of the platform will be disappointing wherever it is launched due to technology limitation and too much emphasis by governments on pay offerings. Nevertheless, it will not fail as badly as has already occurred in the UK and Spain.

A costly investment The experiences of ITV Digital have demonstrated that DTT is a very costly project, ‘savaging’ Carlton Communications’ and Granada’s share prices for some time. Investors need to know if the roll-out of DTT could have similar consequences for other broadcasters, says the report. Analysts believe that DTT will be positive for M6, TF1 and Vivendi, neutral for Lagardère and ProSieben and negative for Carlton, Granada and Mediaset.

For Carlton and Granada the development of DTT is negative because ITV and its theme channels will just be carried on the new BBC/BSkyB consortium (see BBC/BSkyB To Reap Fruits Of DTT Victory, Says Lehman Brothers), which is purely free television and will therefore further fragment the audience – bad news for ITV.

UK uptake forecasts Lehman Brothers anticipates that the arrival of the BSkyB/BBC-run platform will lead to cheaper set top boxes, better quality TV content and stronger cross-promotion by terrestrial broadcasters. However, figures show that only 87% of the population will have converted to digital by the end of the decade and analysts remain sceptical as to whether about the UK Government’s plan to switch off the analogue signal by 2010.