Digital TV Households to Hit 187 Million in Europe, U.S.

NEW YORK, August 23: According to research firm Datamonitor,
there will be 187 million digital TV homes in Europe and the U.S. by 2010, with
Europe expected to overtake the U.S. by the end of this year.

The report, The Evolving Broadcast Sector, says that 65 million households across Europe will
have made the transition to digital TV services by the end of this year.
Digital penetration, however, will remain higher in the U.S. until the end of
2009, when an estimated 63 percent of households in both regions will be
receiving digital TV services.

“Competition across the digital TV sector is now greater
than ever before, prompting operators to develop their offerings in order to
attract and retain subscribers,” says Adrian Drozd, Datamonitor’s senior media
broadcasting analyst and author of the study. “The emergence of IPTV will act
to boost levels of competition and add new impetus to the plans of established
operators.”

Currently, more than 100 million households across Europe
and the U.S. have access to digital TV. The U.K. leads the European market with
a digital TV penetration of more than 50 percent. Datamonitor estimates that by
2010, 95 percent will have made the transition to digital TV and the U.K. will
remain the most penetrated digital market in the region. Germany, however, will
continue to lag behind other major European markets, with only around half of
TV households digital by the end of 2010.

The research also looks at the prospects for IPTV in Europe,
with Datamonitor noting that broadband platforms will face stiff competition
from cable, satellite and DTT services. There will be 9.5 million IPTV
subscribers across the region by the end of 2010, with fewer than 9 percent of
digital households connecting via a broadband connection. France will continue
to lead the region on IPTV rollout.

IPTV will face similar obstacles in the U.S., with high
levels of pay-TV penetration and expected strong price competition from
established cable and satellite providers. “IPTV is primarily a defensive move
by the major service providers rolling out services,” says Drozd. “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.”