Digital TVs record year

In what was a record year for digital television subscriber growth, Western European digital television subscriptions broke through the 100m household mark in 2008, according to a new report by analyst firm Strategy Analytics. The report* estimates that Western Europe added 17m net new digital households in 2008.

On a platform level, Digital Satellite led in terms of overall subscriptions; however, Digital Terrestrial Television (DTT) will fuel the growth of digital television over the next four years, says the report. Fifty-seven million homes will use DTT as their primary viewing platform in 2012, according to Strategy Analytics.

As European countries undergo their respective Digital Switchovers (DSO), and analogue signals are shut off, DTT will emerge as the dominant primary digital viewing platform, noted John Lee, Analyst in the Strategy Analytics Multiplay Market Dynamics service. DTT service is becoming competitive with lower-tier pay television offerings both in terms of channel selection and quality.

Strategys report estimates that Western Europe digital television subscriptions will surpass 150m households in 2012, representing a 50% increase from the recent 100m household mark in 2008. The rate of growth implies a CAGR of slightly over 10% in the next four years. Digital TV household penetration will approach 90% in 2012, driven largely by the widespread distribution of digital terrestrial TV (DTT).

In many countries, free DTT service is competitive compared to the traditional basic cable package in terms of channel selection and quality. Consumers in these markets may consider forgoing Pay TV for the option of free DTT particularly in times of economic contraction.

Coupling the benefit of a competitive channel selection in DTT with the growing popularity of online premium video, DTT will emerge as the dominant digital television service in Western Europe in the upcoming years. Conversely, Digital Satellite, a unidirectional technology, appears vulnerable amidst technologies like Video on Demand in Cable and IPTV. As such, Strategy Analytics forecasts only modest growth, says the study.

The growth in DTV penetration will be led by Germany, which will surpass the United Kingdom in DTV households in 2012 approaching 30m households. Germany has historically been a highly cabled country, and the rate of transition from traditional analog subscribers to digital cable subscribers will more than double in the next few years. Not far behind Germany in DTV households are the UK, France, and Italy, each claiming 20m digital television households by 2012.