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Digital TV conversion slows in Western Europe
April 11, 2012 14.08 Europe/London By Robert Briel

Western Europe will not reach full digital TV penetration until 2017, despite penetration being as high as 85% by end-2011, according to a new report from Digital TV Research. In fact, only two of the 15 countries covered in the Digital TV Western Europe report had fully converted to digital by end-2011, with another two expected to join them by the end of this year.

Report author Simon Murray said: “Six countries will not reach full digital TV conversion until after end-2015. However, Switzerland, which has the lowest digital penetration rate in Western Europe, will rapidly convert from the 56% penetration it recorded at end-2011.”

The 25 million analogue homes remaining at end-2011 will be the hardest to convert to digital. Analog DTH signals will cease in 2012 and the last analog terrestrial home will be switched off in 2013 [in Portugal].

Murray commented: “Analogue cable homes will be harder to convert to digital as many of these subscribers pay for basic packages as part of their rent. Operators have difficulties in accessing these households as they have to persuade landlords and housing committees to upgrade to digital.”

Western Europe will pass 150 million digital TV households during summer 2012. This total will grow to 175 million by 2017. FTA DTT will remain the most popular platform. Digital cable will not be far behind, by recording 45 million subs in 2017.

Western European pay TV penetration will average at 59% by 2017, up by only three percentage points on 2011. By 2017, pay TV penetration will range from nearly 100% in the Netherlands to only 29% in Spain.

The number of pay TV subs will grow by nearly 10 million between 2011 and 2017 to reach 104 million. This comes despite the loss of 16.5 million analog cable subs over the same period. Digital cable will grow by nearly 16 million subs and IPTV will climb by 6.5 million. However, pay DTH will only increase by 2.5 million and pay DTT by 1.5 million.

Despite the increasing number of pay TV homes, pay TV revenues will remain flat at US$33 billion. ARPU is falling in most countries and on most platforms.

Murray said: “The pay TV arena is more competitive than ever as IPTV platforms launch and as cable operators’ upgrade. Furthermore, rapid growth in higher-speed broadband connections allows more online video viewing [over-the-top TV]. So cable operators now offer cheaper and scaled-down basic TV packages to retain subs and to attract new ones. The knock-on effect saw DTH operators also dropping their basic package prices and reducing channel choice.”

He continued: “TV ARPU also falls as cable operators and telcos convert their subscribers to double-play or triple-play bundles. These subscribers provide operators with higher overall [blended] ARPU than standalone TV subscribers, but lower TV ARPU. Bundles are particularly attractive during harsh economic times as consumers hunt for bargains. Additionally, double-play and triple-play subs are more loyal than standalone ones, thus cutting churn and the related subscriber-retention costs.”

For more information about the Digital TV Western Europe report, please look at the Broadband TV News shop.


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Digital TV conversion slows in Western Europe





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