Digital TV 'to reach 93% by year's end'

Thursday, June 5 2008, 12:12 BST

Digital television penetration will reach 93% by the end of the year, according to authoritative new research by consultants Deloitte.

Some 89% of UK homes had digital TV at the end of April, up from 87% at the beginning of the year. The figures were released as part of the firm's Digital Index, launched by the company this week with the aim of monitoring the progress of various technologies.

"For technology companies, the UK digital television market represents a substantial opportunity, in spite of high penetration levels," said Deloitte. "One-third of the UK's 60m television sets still require conversion or upgrade. And with consumers increasingly aware that they may also need to upgrade VCRs, the DVR market is likely to grow...

"More generally, media companies should ensure that the consumer benefits and revenue potential of digital television are fully exploited, by focusing in particular on HD content. For telecommunications companies, the rapid growth in digital television penetration may threaten adoption of IPTV and mobile television."

Another finding of the Digital Index research was that mobile television - for which penetration is below 1% - was unlikely to see much growth this year, particularly in view of the economic slowdown. Deloitte said in the longer term it believes a "concerted industry-wide effort" is needed to promote mobile TV.

Online video and television viewing, on the other hand, will continue to boom.

Deloitte said in five years more than half the UK population are likely to be watching TV on the internet regularly - posing a problem for traditional broadcasting.

"With improvements to the network for the delivery of online video, accessing on-demand video content through a PC or television will become commonplace," said analysts. "As a result, online video will redefine the way content is distributed and consumed...

"This may herald the end of the dominance of the traditional 30 second TV advert and broadcasters will lose a valuable time specific advertising slot."

Jolyon Barker, Deloitte's head of technology, media and telecoms, said: "While digitisation has already enabled mass market change, from the adoption of emails and mobile phones to the growth of e-commerce, digitisationís full impact has yet to be felt."