In the same way that mobiles will all soon be “smartphones”, HDTV will simply become “TV”

BY 2015 nobody will refer to “high definition” TV because HD will be the standard form of free television everywhere.
But the HD broadcast offering in Europe will largely remain patchy during the intervening transition period, according to a report by Screen Digest.
The study says HDTV will mainly develop as a pay TV product in Europe over the next five years – and mostly as a satellite product.

A major factor for this is the lack of HD on free-to-air platforms, with only Sweden having already launched HD on free DTT and only France and the UK likely to follow in the short-mid-term.

The report says that despite its name, Freesat HD has a disappointing HD line-up and is not likely to make a strong market impact in the UK.
Other barriers to HDTV uptake are a lack of local HD channels in many countries, with pay TV operators relying mostly on US HD channels supply so far.
The study concludes that a number of European pay TV operators “lack of ambition” when it comes to HDTV.

In the report, HDTV 2008: Global Uptake, Strategies and Business Models, three critical success factors that will support the successful migration to HDTV are identified:
– penetration of HD-ready displays
– supply of HD content and HD channels
– the availability of HD broadcast on a variety of television platforms.

The report shows that all these are now cleared for a sustainable migration to HD in the long term.
But it adds: “In the next five years, HDTV will mainly develop as a pay TV product in Europe, and mostly a satellite product.
“However after analogue switch-offs are completed between 2010 and 2012, and digital free-to-air platforms are upgraded to more advanced technologies, they will end-up with more bandwidth capacity and become more widely accessible.”

This, says the report, will kick-start the next phase of HDTV migration as HD becomes the mainstream and ultimately, the standard form of free television around the middle of next decade.

There is a clear connection between the depth of the HD offerings and the take up of HD by subscribers, according to the study.
It says that HD has not been pushed hard enough yet by many of Europe’s pay TV operators despite being used heavily as a marketing tool.
The problem is that this isn’t followed through with the delivery of HD channels.
Premiere in Germany still only offers two HD channels and its HD uptake is sluggish.
By contrast BSkyB has now 17 HD channels covering all genres, and on the back of this has signed up almost 500,000 subscribers in less than two years – the fastest take-up of any new BSkyB product.
The report says that in European pay TV markets that show signs of maturity, operators can use HD to drive ARPU, increase loyalty and reduce churn rates.
HDTV can also drive pay TV acquisition, as new owners of HD-ready sets are frustrated by the lack of free HD sources.
“Pay TV operators should therefore seize this window of opportunity before free TV eventually accommodates more HD,” says the report.

The report also says that small and medium sized pay-TV operators might benefit from reduced costs of transmission and release bigger capacity by migrating their subscribers to MPEG4 at an early stage.

Click here to view the report summary and its key findings

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