Pro7/Sat1 HDTV move 'casts a shadow'

ProSieben-Sat1’s have pulled their simulcast HDTV channels off the air. This is bad news for high-definition says a report from Strategy Analytics.
ProSiebenSat1’s recent surprise decision to close its HD channels over Germany “has cast a shadow over what the industry hoped was one of its biggest growth opportunities,” says a new report from Strategy Analytics.

Senior analyst David Mercer says the decision means that Europe’s largest market is now left with only a handful of HD channels, “and digital TV service providers will find it more difficult to demonstrate the value of their HD packages.” But Mercer believes that in spite of these short-term challenges, Europe’s HDTV transition is still on track.

“Providers in other countries, such as France and the UK, have had early modest success by concentrating on enhancing pay TV packages for premium customers rather than attempting to kickstart a free-to-air HD market,” says Mercer. “We estimate that Europe’s HDTV audience will more than double during 2008, reaching 3.5m households. While this is a modest achievement compared to other parts of the world, rising ownership of HD-capable TVs and receivers will increase the incentive for broadcasters to expand content offerings over the next five years.”

In terms of financial numbers ProSiebenSat.1 Group, in its latest results issued March 4, said preliminary numbers showed revenues up an impressive 29% to €2.7bn (€2.09bn in 2006). Pro7-Sat1 was helped by the absorption of SBS Broadcasting, a purchase which closed last July. However, stripping out exceptional items (which included a €120m Cartel Office fine) still left the Group with EBITDA revenues up eight per cent to €521m.