Freeview To Replace Sky As Top Multichannel Platform
The runaway success of Freeview shows no signs of slowing and the BBC-backed digital terrestrial platform looks set to replace Sky as the UK’s most popular multichannel service within four years.
The latest UK television forecasts from ZenithOptimedia show that Freeview will be available in almost 10 million households by the end of 2007, with Sky installed in less than 9 million and cable in just 3.5 million homes.
Freeview saw uptake surge by more than 40% in the run up to Christmas and more than 3 million British households now have access to the digital terrestrial television service. However, Sky is currently the number one multichannel provider with 7.2 million paying subscribers.
ZenithOptimedia predicts the rapid uptake of Freeview will continue throughout 2004, but suggests that Sky may see growth in its subscriber base slow significantly. Around 4.8 million homes are expected to have access to Freeview by the end of this year, Sky looks set to reach 7.6 million subscribers, but the number of cable homes will dip to 2.8 million.
The figures could cause concern for BSkyB, which recently shelved plans for the launch of a new general entertainment channel on the Freeview platform. The satellite broadcaster’s chief executive, James Murdoch, reportedly decided the company should not allow itself to be distracted from its core aim of developing pay television in the UK (see BSkyB Shelves Plans For New Entertainment Channel).
However, Sky insists it is confident about the future of its pay-TV business. A spokesman for the satellite broadcaster said: “We currently have a target of reaching 8 million subscribers by the end of 2005 and we believe there is significant potential for further growth after that. We don’t see any reason why the UK shouldn’t follow the example of the US, where pay-TV penetration has grown to around 80%.”
Adam Smith, head of knowledge management at ZenithOptimedia, added: “Freeview and Sky cater for two very different markets and we don’t expect them to impinge on each other. However, there could be problems for Sky if its larger pay-TV channels decide there is more money in being free-to-air than there is in taking Murdoch’s carriage fee.”
The figures also suggest the Government could be well on its way to switching off the analogue television signal by the end of the decade. ZentihOptimedia predicts there will be 22.3 million homes with digital television by 2007, a figure which equates to almost 90% of the total viewing population.
The growth of multichannel television will have a significant impact on the audience shares and advertising revenues of terrestrial broadcasters. ITV1 looks set to be the worst hit with its share of viewing forecast to drop from 21.8% last year to just 19.4 in 2007. The UK’s main commercial broadcaster is also expected to see its share of television adsp0end fall below the 50% mark for the first time.
However, non-terrestrial channels will continue to gain ground in the battle for viewers with their combined audience share expected to rise from 21% in 2003 to just under 25% by the end of 2007. Multichannel broadcasters will also see their share of the television advertising market grow from 18.8% last year to 23.8% within four years.
Earlier this month ZenithOptimedia predicted that television spot advertising expenditure in Western Europe will rise by 33% in real terms over the coming decade. The Television In Western Europe To 2012 report forecasts advertising expenditure to grow to $22.6 billion this year, with 2012 revenues hitting $29.5 billion (see European Pay-TV Revenues To Exceed Adspend In 2004).
ZenithOptimedia: 020 7224 8500 www.zenithoptimedia.com
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