New Report: Free European DTT Resilient Against Recession

LONDON, December 17:
Free-to-air digital terrestrial TV in Europe will be least affected by the
global economic downturn, according to new 2009 forecasts from research firm
Screen Digest.

Surveying the impact of
the recession on Europe's media markets, the research notes that growth
prospects for the region's DTT players are tied to the transition to
digital—not to the economy. Screen Digest also predicts that Eastern
European pay-TV markets will experience consolidation in the wake of the
downturn.

Elsewhere in the region,
the British pay-TV market will be comparatively resilient, the report notes,
with Sky expected to maintain its subscriber growth, control churn and maintain
ARPU. Operators in Spain, France, Italy and Germany will be less fortunate, the
research notes.

The home-video market is
expected to stay strong as consumers look to cut costs by staying in. However,
margins are falling, and Screen Digest cites the impending closure of
Woolworths, which accounted for almost 9 percent of DVD sales in 2007. EUK, the
largest DVD wholesaler in the U.K. and a sister company of Woolworths, is also
closing this year. Nonetheless, 10.2 billion euros will be spent by consumers
on DVDs this year. This will drop to 5.6 billion euros by 2012 as a result of
the transition to Blu-ray. The take up of Blu-ray will, however, slow in Europe
due to the downturn. "Many European consumers who might have upgraded
their home-entertainment system will now defer their decision so the shift to
Blu-ray will take longer than previously anticipated," said Helen Davis
Jayalath, the head of video at Screen Digest. "They will, however continue
to buy DVDs, safe in the knowledge that [Blu-ray's] backward compatibility means
that they won't become obsolete. But the delay in [Blu-ray] adoption and the
availability in the short term of high numbers of surplus EUK and Woolworths
DVD stock mean it will take longer for consumer spending to return to
growth."

Screen Digest also reports
that the mobile entertainment landscape will be increasingly dominated by free
content. Ronan de Renesse, the head of mobile, said: "Content providers
will be looking at application stores such as Apple's App Store and Google's
Android Market to compensate for the loss they will make on mobile operators
portals. The economic downturn will push operators to release their grasp on
the mobile content industry and open-up mobile Internet. So against all odds,
2009 will turn out to become the most successful year for mobile content so
far."

—By Mansha Daswani