Insight Analysis: Is The UK Turned On By Digital?

Sky Digital now has 5.4 million subscribers and is in line to hit its target of 7 million by 2003. Digital terrestrial rival ONdigital (soon to be ITV Digital) has 1.1 million customers and is growing its base at a much slower rate than Sky. This is partly due to a high churn rate – the percentage of customers leaving the service. ONdigital’s churn is around 22%; Sky Digital’s is 9.9%.

ITV is renaming the ONdigital service to make the most of the ITV brand and the Network’s sales and programming expertise. It needs to tackle the churn problem and reduce the amount of money it is spending on acquiring new customers in order to successfully compete with Sky. After securing these customers, it also needs to keep them watching the telly.

An analysis of the BARB total viewing data shows that on average since January last year, ONdigital homes have a lower weekly viewing level than any other household grouping. Total TV viewing averages just 23.8 hours a week in ONdigital homes. This compares to 25.4 hours in terrestrial homes; 25.8 hours in multichannel homes and 26.0 hours in all homes. Sky Digital, by contrast, has the largest weekly viewing at 27.4 hours – the ‘all digital homes’ average is 26.9 hours.

This shows that less TV is watched in ONdigital homes than in any other household set, including terrestrial only homes, where no subscription payment for TV services has been made.

A look at the breakdown of viewing habits across different households reveals that all five free to air channels take a greater share of viewing in ONdigital homes than in Sky Digital homes. The ‘Others’ (pay and multichannel-only stations) take by far the most share in Sky Digital homes.

ITV, not being carried by Sky Digital, unsurprisingly gets its lowest share in Sky homes and its highest in terrestrial homes. This is true of all five free to air stations. Significantly though, Sky viewers watch much less of the five terrestrial channels than any other multichannel viewers group.

It seems that whilst Sky Digital customers are avidly embracing all that digital has to offer, ONdigital subscribers are watching less subscription TV for fewer hours even than the multichannel homes average.