HDTV in Europe: Ready for take-off?

Abstract

Overview

Europe's HDTV market is in its early days: although estimates point to 10 million households equipped with an HD-ready TV by the end of 2006, only a fraction of them will actually be consuming HDTV services.

Nevertheless, the high-definition TV transition is both well underway and irreversible, with clear strides having been made over the past two years:

• The base of HD-ready TV sets is growing.
• Although later than planned, HD services have been launched in several European countries.
• The different distribution networks have become HD-compatible.
• Technical production and broadcasting chains are largely HD-ready.

But major obstacles do still exist which are hampering the take-up rate:

• Some consumers have trouble understanding the benefits of high definition.
• The HD business model is still fuzzy for general interest channels.
• HD programme production is being blocked by the chicken or the egg dilemma that is weighing on the industry as a whole.

At a time when growth is being fuelled by pay-TV services, the introduction of HD-DVD players later this year could give the market a boost, as could HD versions of the Olympic Games in Beijing in 2008 and of the European football championships. Added to this, the launch of a free to air HDTV service could provided the much-needed breakthrough to increase viewers' exposure to high definition services.

Key questions

• What lessons can be learned from HDTV deployments in the US and Japan?
• HDTV in Europe: on which network?
• How to encourage an expansion of HD content?
• What conditions are needed for a migration to a free HDTV offer?
• What leverage can be used to kick start the market?

Who should read this report?

TV channels and media groups

• Pay-TV operators: generate ARPU, attract subscribers and/or cement their loyalty?
• Is it in generalist channels' interest to migrate to HD?

Regulators

• DTT, should they wait for the analogue switch-off in 2010?

Operators: telcos, ISPs, satellite, cable, terrestrial

• Satellite shifting to free HDTV services?
• What positioning for IPTV with respect to HD?

Equipment-makers

• What will be the next HDTV viewing devices?
• How to rationalise the offer to consumers?

Investors and analysts

• HD's development prospects in Europe.
• Its impact on players along the media chain.