the evolving broadcast sector (review report)

Media & Broadcasting Technology – The evolving broadcast sector (Review Report) DMTC1195 / Published 06/2006

© Datamonitor. This brief is a licensed product and is not to be photocopied

DATAMONITOR VIEW

CATALYST

Competition across the digital TV sector is now greater than ever before, prompting operators to develop their offerings to

both attract and retain subscribers. Operators are increasingly embracing new technologies to achieve this goal –

Datamonitor expects 2006 to be a watershed year for new services such as high-definition TV, IPTV and mobile TV.

SUMMARY

The five components of the evolving broadcast sector theme provide an overview of developments across the digital TV

sector, including a focus on the potential impact of technologies including high definition, PVRs and mobile TV.

• Digital TV markets: Europe & the US (Market Focus)

• Technology developments in the digital TV sector (Technology Focus)

• Digital TV development - major European TV markets and the US (Databook)

• Digital TV development - small European TV markets (Databook)

• Technology developments in the digital TV Sector (Databook)

METHODOLOGY

Industry opinion research Interviews with leading market participants.

Market data Historic and current market values are based on Datamonitor’s ongoing research into the media sector.

REVIEW REPORT

Media & Broadcasting Technology – The evolving broadcast sector (Review Report) Driving the transition to digital

Reference Code: DMTC1195

Publication Date: June 2006

Media & Broadcasting Technology – The evolving broadcast sector (Review Report)



EXECUTIVE SUMMARY

Introduction

This report combines the two briefs from the evolving broadcast sector theme for Q2 2006. While the market focus

section provides an overview of key developments across the digital TV sector, the technology focus brief

considers developments with regard to the deployment of technologies such as high definition, PVRs and mobile

TV. Three databooks showcasing relevant datasets from the interactive model are also included.

Digital TV markets: Europe & the US (Market Focus)

The Market Focus section discusses key recent developments across the European and US digital TV markets.

The European and the US digital TV markets are expected to show strong growth by the end of the decade, with

the emergence of IPTV acting to boost levels of competition and add new impetus to the plans of established

operators. The rate and nature of market development will continue to differ considerably between individual

country markets, although all will show a significant increase in the penetration of digital services by the end of

2010. Key findings of this brief include:

• strong digital growth expected across Europe;

• IPTV set to shake up the digital TV competitive environment;

• consolidation continues to have an impact on market dynamics.

Technology developments in the digital TV sector (Technology Focus)

The Technology Focus section examines the potential impact of technologies – including high definition, PVRs

and mobile TV – on the digital TV sector. Competition across the broadcast sector is now greater than ever

before, prompting operators to develop their offerings to both attract and retain subscribers. Operators are

increasingly embracing new technologies to achieve this goal – Datamonitor expects 2006 to be a watershed year

in Europe for new services such as high-definition TV, IPTV and mobile TV, while uptake of PVR technology is set

to increase rapidly over the next five years. Key findings of this brief include:

• high definition expected to become a major service differentiator;

• increasing penetration of PVRs could disrupt existing broadcast business models;

• mobile TV offers new opportunities for broadcasters.




Databooks

The final section provides datasets relating to the evolving broadcast sector theme. Three databooks are included

in this review report:

• Digital TV development: major European TV markets and the US (Databook) – provides a breakdown

of digital households by both platform (satellite, cable, DTT and IPTV) and operator across major

European TV markets (France, Germany, Italy, Spain and the UK) and the US.

• Digital TV development: small European TV markets (Databook) – provides a breakdown of digital

households by both platform (satellite, cable, DTT and IPTV) and operator across the smaller European

TV markets (Austria, Belgium, Denmark, Finland, the Netherlands, Norway, Portugal, Sweden and

Switzerland).

• Technology developments in the digital TV Sector (Databook) – provides forecast market data relating

to the penetration of PVR, high definition and mobile TV technologies across western Europe and the

US.

Sources used for this research include:

• interviews with leading market participants;

• Datamonitor’s ongoing research into the media sector.




TABLE OF CONTENTS

DATAMONITOR VIEW 1

CATALYST 1

SUMMARY 1

METHODOLOGY 1

EXECUTIVE SUMMARY 2

Introduction 2

Digital TV markets: Europe & the US (Market Focus) 2

Technology developments in the digital TV sector (Technology Focus) 2

Databooks 3

DIGITAL TV MARKETS: EUROPE & THE US (MARKET FOCUS) 8

Summary 8

Strong digital growth expected across Europe 8

IPTV set to shake up the digital TV competitive environment 15

Consolidation continues to have an impact on market dynamics 20

TECHNOLOGY DEVELOPMENTS IN THE DIGITAL TV SECTOR (TECHNOLOGY FOCUS) 24

Summary 24

High definition expected to become a major service differentiator 24

Increasing penetration of PVRs could disrupt existing broadcast business models 32

Mobile TV offers new opportunities for broadcasters 36




DIGITAL TV DEVELOPMENT: MAJOR EUROPEAN MARKETS & THE US (DATABOOK) 42

Introduction 42

Market development comparison: Europe & US 43

Digital TV growth in France 46

Digital TV growth in Germany 48

Digital TV growth in Italy 50

Digital TV growth in Spain 52

Digital TV growth in the UK 54

Digital TV growth in the US 56

DIGITAL TV DEVELOPMENT: SMALL EUROPEAN TV MARKETS (DATABOOK) 58

Introduction 58

Digital TV growth in Austria 59

Digital TV growth in Belgium 61

Digital TV growth in Denmark 63

Digital TV growth in Finland 65

Digital TV growth in the Netherlands 67

Digital TV growth in Norway 69

Digital TV growth in Portugal 71

Digital TV growth in Sweden 73

Digital TV growth in Switzerland 75

TECHNOLOGY DEVELOPMENTS IN THE DIGITAL TV SECTOR (DATABOOK) 76

Introduction 76

High definition uptake comparison: Europe vs. the US, 2006-2010 78




High definition TV households in Austria, 2006-2010 79

High definition TV households in Belgium, 2006-2010 80

High definition TV households in Denmark, 2006-2010 81

High definition TV households in Finland, 2006-2010 82

High definition TV households in France, 2006-2010 83

High definition TV households in Germany, 2006-2010 84

High definition TV households in Italy, 2006-2010 85

High definition TV households in the Netherlands, 2006-2010 86

High definition TV households in Norway, 2006-2010 87

High definition TV households in Portugal, 2006-2010 88

High definition TV households in Spain, 2006-2010 89

High definition TV households in Sweden, 2006-2010 90

High definition TV households in Switzerland, 2006-2010 91

High definition TV households in the UK, 2006-2010 92

High definition TV households in the US, 2006-2010 93

PVR uptake comparison: Europe vs. the US, 2006-2010 94

PVR households in Austria, 2006-2010 95

PVR households in Belgium, 2006-2010 96

PVR households in Denmark, 2006-2010 97

PVR households in Finland, 2006-2010 98

PVR households in France, 2006-2010 99

PVR households in Germany, 2006-2010 100

PVR households in Italy, 2006-2010 101

PVR households in the Netherlands, 2006-2010 102




PVR households in Norway, 2006-2010 103

PVR households in Portugal, 2006-2010 104

PVR households in Spain, 2006-2010 105

PVR households in Sweden, 2006-2010 106

PVR households in Switzerland, 2006-2010 107

PVR households in the UK, 2006-2010 108

PVR households in the US, 2006-2010 109

Mobile TV subscribers in Europe and the US, 2006-2009 110

Mobile TV handset shipments by broadcast technology, 2006-2009 111

APPENDIX 112

Definitions 112

Further reading 113

Ask the analyst 113




DIGITAL TV MARKETS: EUROPE & THE US (MARKET FOCUS)

Summary

The European and the US digital TV markets are expected to show strong growth by the end of the decade, with

the emergence of IPTV acting to boost levels of competition and add new impetus to the plans of established

operators. The rate and nature of market development will continue to differ considerably between individual

country markets, although all will show a significant increase in the penetration of digital services by the end of

2010. Key findings of this brief include:

• strong digital growth expected across Europe;

• IPTV set to shake up the digital TV competitive environment;

• consolidation continues to have an impact on market dynamics.

Strong digital growth expected across Europe

The digital TV market continued to exhibit strong growth across Europe and the US in 2005, with more than 100

million households across the two regions having made the transition from analog services by the end of the year.

However, the pace of progress with regard to the penetration of digital services continues to vary significantly

between individual country markets, with the UK remaining the only market where more than half of households

had made the transition by the end of 2005. The following figure compares current and future development in

Western Europe and the US from 2005 to 2010, highlighting the fact both expected uptake of digital TV services

and the rate at which individual markets will grow over the forecast period will continue to differ considerably.




Figure 1: Digital TV market development comparison, 2005-2010

Italy

Germany

Portugal

Denmark

Finland France

Spain

Netherlands Austria

Switzerland

Sweden Norway

Belgium US

UK

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60%CAGR, 2005-2010

% d

igita

l in

2010

NB: Size of bubble represents number of digital households in 2010

Source: Datamonitor D A T A M O N I T O R

Top level findings of Datamonitor’s research into the digital TV sector suggest that:

• The UK will be the most penetrated digital market by 2010, with 95% of households having made

the transition by the end of the decade. The continuing success of BSkyB’s satellite platform and

expected strong uptake of the Freeview DTT service will drive uptake – Datamonitor expects Freeview

to become the largest digital platform in the UK by 2008, driven by increased marketing activity to boost

consumer understanding of the benefits of switching to digital services. The recent merger of cable

operators NTL and Telewest will also act to provide greater impetus to digital cable development.

• The US will remain the largest digital market in terms of household connections, although it will

experience relatively slow growth over the next five years and penetration of digital services will remain

relatively low at 66% by the end of the decade. The market will be driven by a combination of

increasing satellite subscriptions and the ongoing migration of analog cable subscribers to digital

services. IPTV will also play an important role in the US, with 5.8 million households expected to be

receiving broadcast content via this platform by the end of 2010.




• Belgium will experience the strongest growth over the forecast period, driven by the development

of the digital cable sector, which is currently very underdeveloped. IPTV will also have an impact on the

Belgian market, with over 300,000 households expected on Belgacom’s platform by the end of 2010.

• In Germany, Europe’s largest TV market, the digital value proposition has proved less powerful

than in many markets – the sizable multi-channel subscriber base that currently receives a broad

range of channels via analog cable services is in no rush to migrate to digital, making rapid

infrastructure investment an unattractive option for operators. However, Datamonitor believes that

recent cable consolidation will to drive digital development plans, helping to boost digital penetration to

nearly 50% of households by the end of 2010.

Europe set to overtake the US in 2006

Digital TV penetration in Europe is currently lower than that in the US, where cable and satellite operators are in

intense competition. In the US, there 27 million satellite subscribers at the end of 2005, compared with around 26

million digital cable households – the penetration of digital services among cable operators’ total subscriber bases

continues to grow, with approaching half of many cable operators’’ subscribers having made the transition to

digital service by the end of 2005. In contrast, many European cable operators are only just making their first

tentative steps with regard to digital services, holding back digital penetration levels.

Figure 2: Digital TV uptake comparison: Europe vs. the US, 2005-2010

0

20,000

40,000

60,000

80,000

100,000

120,000

2005 2006 2007 2008 2009 2010

Digi

tal T

V h

ouse

hold

s (0

00s)

0%

10%

20%

30%

40%

50%

60%

70%

80%

% o

f hou

seho

lds

with

dig

ital T

V

Europe US % digital - Europe % digital - US





As shown in the figure above, Datamonitor expects the European digital TV market to overtake the US in absolute

terms by the end of 2006, at which point almost 65 million households across the region will have made the

transition to digital TV services. However, digital penetration will remain higher in the US until the end of 2009 – at

this point, around 63% of households in both the US and Europe will be receiving digital TV services. The key

driver of European digital TV uptake over the forecast period is expected to be DTT, which will to drive uptake to

109 million by the end of 2010 – compared to 78 million in the US at the same period.

European market growth dependent on DTT and migration to digital cable services

Across Europe as a whole, cable infrastructure is slowly being upgraded to digital, with customer migration to

digital services proving to be rather limited in many markets. However, strong growth is expected across Europe,

driven by a number of key factors:

• Strong growth in DTT in France, Italy, Spain and the UK, driven by the EU analog switch-off dates.

All of these major TV markets have a relatively strong reliance on terrestrial reception compared to

other more cable-centric markets, and hence migrating analog households to DTT will be a key

requirement over the next five years.

• Increasing migration of analog cable subscribers to digital services, driven by operators’ desire to

deploy triple play services in order to strengthen their competitive offerings relative to both satellite and,

increasingly, IPTV.

• Continued growth of satellite services in the UK, Italy, Spain and the Nordics, driven by the

deployment of new services (HD in particular) and the strong content offerings that these operators

provide.

• The emergence of IPTV services, which are already gaining a foothold in a number of markets

including France, Spain and Italy. Datamonitor expects strong growth across this platform as incumbent

operators seek to strengthen their market position by adding TV services to their service portfolios.

In contrast, the US market will be largely driven by the continuing migration of analog cable subscribers to digital

services, with over 10 million households expected to make this transition between 2005 and 2010. IPTV will also

become a significant platform over the forecast period, with almost 6 million households connected by the end of

the forecast period. The following section highlights expected progress across the three established platforms for

digital TV (cable, satellite and DTT).

Digital cable: slow progress continues in core European cable markets

The European digital cable market has continued its slow progress in 2005. Datamonitor retains high hopes for

strong growth in many of the key cable markets over the next few years, although there remains a lack of interest

on the part of both consumers and operators to make the transition in many markets. The UK is expected to

continue to lead the European market in terms of digital penetration of cable services, with Telewest reaching

93% digital penetration by the end of 2005 and expecting to switch off analog services in 2006. Strong growth is

expected in heavily cable markets including the Netherlands and Belgium, although German digital development




remains relatively sluggish. However, Datamonitor expects recent consolidation of the German cable market to

help to drive migration to digital services, with greater economies of scale within operators helping to boost

investment levels.

Digital penetration reaches almost 50% in US cable sector

In the US, digital penetration among cable subscribers is approaching the 50% mark: Comcast, the largest cable

operator in the US, had migrated around 46% of its subscribers to digital services by the end of 2005, while the

innovative Cablevision is approaching the two-thirds mark. Despite this healthy position, Datamonitor expects

relatively slow progress over the next five years, with approximately 60% of cable subscribers using digital

services by the end of 2010. However, the need to free up capacity for the further development of HD services is

likely to prompt operators to boost their efforts in this regard. The emergence of IPTV services – not just in the US

but also across Europe – is also likely to prompt greater focus on driving digital adoption, with the need to offer

VOD services to compete on an even footing with new competitors becoming increasingly important.

Digital satellite: steady, if unspectacular progress

The digital satellite market remains dominated by pay-TV operators, with the only significant exception being

Germany where FTA satellite services are commonplace. Around 24 million European households and 27 million

US households now receive digital satellite services, with continued growth anticipated by the end of 2010.

Datamonitor expects the strongest satellite growth to occur in Germany, where the number of digital households

will increase to almost 11 million by the end of 2010, driven primarily by the FTA market which will double in size

over the forecast period. In the other major European markets, Datamonitor expects relatively slow growth – the

pay-TV markets in France, Spain the UK are nearing saturation point, with further digital growth expected to come

primarily from FTA services. Free-to-air satellite services are already commonplace in Germany, while plans are

afoot to launch a FreeSat service in the UK – although the huge success of FTA DTT services has resulted in

plans being delayed for the foreseeable future.

Solid growth anticipated for US satellite

The US satellite market continues to grow, with over 2 million subscribers added in 2005. Datamonitor expects

around 5.7 million more subscribers to be added by DIRECTV and EchoStar over the forecast period, with around

33 million households accessing pay-TV services via digital satellite by the end of 2010, representing nearly 28%

of all US TV households. With subscriber growth beginning to slow, Datamonitor expects the operators to focus

increasing efforts on increasing ARPU levels via investment in HD programming and PVR technology, while a

merger of the rival providers remains a possibility.

Digital terrestrial television (DTT): Europe’s largest platform by 2008

DTT continues to be a major success story in the markets where it has launched on a FTA basis – the strong

uptake of services seen in the UK has been followed by substantial growth in other key terrestrial-dominated

markets including France, Italy and Spain. However, DTT services have yet to be fully launched in a number of




European markets including Austria, Belgium and Denmark – in these markets, there is little compelling reason to

invest heavily in DTT services due to the high penetration of cable and satellite services. In Belgium, for example,

the dominance of cable (over 90% of households receive TV content via this platform) and the emergence of IPTV

services means that there is no real incentive to deploy widespread DTT services. Datamonitor believes that the

most significant opportunities for DTT provision across Europe have already been exploited, with remaining

markets having limited reliance on analog terrestrial reception and hence less significant need for DTT rollout.

Overall, however, DTT will be the largest digital platform by the end of 2008, with over 30 million households using

the platform as their primary means of receiving digital TV services by this time.

DTT will remain a niche proposition in the US

In contrast to the European market, DTT is expected to have a minimal impact in the US – only around 10% of

households use analog terrestrial as their primary reception method for TV services. However, with around 11

million households reliant on terrestrial services, transitioning households to digital services will be increasingly

important – many channels are already being broadcast in digital, with a market for DTT programming developing

as a result of the increasing propensity for new TVs to come ready equipped with a digital tuner (the FCC has

mandated that digital tuners must be integrated into all new TVs by the summers of 2007). The USDTV pay-TV

service is also likely to attract some subscribers – the $20 per month service, which offers around 30 channels,

was launched in Dallas in November 2005 following trials in three other markets.

A switch-off date of April 7th 2009 has been approved by the US Senate Commerce Committee – following the

cessation of analog broadcasts, the frequencies are set to be returned to the government for resale, and are

expected to reach up to $10 billion at auction. The Senate bill includes a $3 billion fund for set-top box subsidies,

considerably more than the $1 billion previously proposed by the House of Energy and Commerce Committee.

Datamonitor believes that high subsidy levels will help to ensure a smooth transition to DTT services in the US.

Football rights remain an essential component of European pay-TV strategies

The provision of high value content is a key driver across the pay-TV sector – consumers will understandably opt

for services that provide them will a broad range of popular and sought-after content. Across the European pay-

TV sector, top-flight football rights remains the most prized of assets – the success of many satellite providers,

including BSkyB and Premiere, has been attributed by many to the availability of exclusive football coverage.

However, recent developments in both Germany and UK have acted to disrupt the current monopolies that the

operators previously held over football rights, potentially having a significant impact on the dynamics of these pay-

TV markets.

Premiere seeking to repair the damage caused by Bundesliga rights loss

Germany’s leading pay-TV operator, Premiere, lost the rights to top-flight German football to Unity Media (a

holding company of the cable operators iesy, ish and Tele Columbus) in December 2005. Unity Media paid

€1.26bn ($1.52bn) for the rights from 2006-9; Premiere’s bid was actually higher, but the operator demanded that

a popular highlights show on public broadcast channel, ARD, was moved to a later time slot. Clubs, realizing the




importance of sizable FTA audiences to their sponsors, opted to support the lower, but less restrictive, Unity

Media bid. Premiere’s share price fell by around 45% when the news was announced, highlighting the huge

importance of the rights to its business. The loss of the highly prized football rights could also have a major impact

on its subscriber base – while Premiere itself expects to lose about 10% of its 3.4 million subscribers if it is unable

to sub-license the rights from Unity, Datamonitor believes that the actual figure could be closer to 20%, such is the

importance of the rights.

In an attempt to repair the damage caused by the rights loss, Premiere has reached a deal with Deutsche

Telekom that will allow the operator’s customers to watch coverage over the Internet – Deutsche Telekom holds

the Internet rights for Bundesliga coverage. Under the terms of the deal, Bundesliga games will be available to

Premiere subscribers that have a DT broadband connection – currently estimated to be around half of the pay-TV

operator’s customer base. Although the deal will help Premiere to repair some of the damage wrought by the loss

of pay-TV football rights, Datamonitor believes that the operator will need to negotiate a deal with Unity Media in

order to regain access to matches across its cable and satellite platforms. Although not yet confirmed, Unity

Media is expected to sub-license its rights to other operators in order to recoup some of its initial investment –

whether Premiere is one of these remains to be seen.

EC decision weakens BSkyB’s hold on UK football rights

Premiere is not the only European operator to have lost control of football rights in the past year. It was confirmed

in March 2006 that English Premiership TV rights for the 2007-2010 seasons would be sold in 6 packages, with no

single broadcaster able to buy more than 5 of these. Despite the enforced loss of Sky’s exclusivity, the English

Premier League rights auction in the UK generated £1.7bn ($3.1bn), up around 65% on the previous deal. As

expected, BSkyB has retained a strong position with regard to the 2007-2010 rights, winning 4 of the 6 rights

packages on offer, while Setanta has gained control of the remaining 2 packages. Overall, Sky has won the rights

to 92 matches (including the elite Sunday afternoon games) at a cost of around £4.8 million ($8.6m) per match,

while Setanta took the remaining 46 at an average cost of £2.8 million ($5m).

For the first time, the rights are platform neutral, meaning that the rights winners will be able to simulcast

programming via non-TV channels, including broadband – Datamonitor expects Sky in particular to exploit this

opportunity over the course of the next few years in order to extend consumer reach. Setanta has already

confirmed that it is planning to screen live matches over broadband and across all digital TV platforms (including

DTT); should Premier League coverage be made available through Freeview via the Top Up TV pay-TV services,

it would provide a major boost to the DTT platform, which is already in around c7 million UK homes. Rumors also

persist that BSkyB will offer some coverage on Top Up TV, possibly via a monthly subscription – this would be a

significant departure from the operator’s existing strategy, whereby it sells access to Premier League matches as

part of a package of channels through cable and satellite.

IPTV operators start to compete for football rights

Although satellite (and to an extent, cable) operators have historically been the primary acquirers of football rights,

a number of IPTV providers have taken an aggressive approach to their content strategies to win exclusive rights.




Belgacom has acquired the rights to the Belgian football league and Dutch telco, Versatel, has acquired the rights

to the Dutch football league. Both operators currently lack the necessary scale to make the deals profitable

without sub-licensing the rights to other operators (Belgacom provides some matches to satellite provider Canal

Digitaal, Versatel to a number of cable operators) – however, Datamonitor expects the situation to change as the

operators’ IPTV subscriber bases increase to the point where they can retain exclusivity in a cost-effective

manner. BT’s acquisition of ‘near live’ Premier League rights in the UK for its forthcoming VOD service further

underlines the high value of football rights across the pay-TV sector.

IPTV set to shake up the digital TV competitive environment

Increasing competition drives need for service expansion

IPTV remains one of the biggest subjects of discussion and speculation across the digital television industry

today. The emergence of a fourth platform is making executives across the cable, satellite and terrestrial sectors

uneasy as they prepare to meet the challenge of increased competition from telecoms providers. Telecoms

operators across the US and Europe are coming under increasing pressure from cable operators with regard to

the provision of triple play services, and in many cases are reacting by launching triple play services by adding

IPTV to the plethora of services already being delivered over their broadband networks.

European operators begin to embrace IPTV

Initial IPTV development has been faster in Europe than the US, with the majority of early deployments over

existing DSL broadband connections and product offerings relatively simple. Of the incumbent telecoms operators

in Europe, Belgacom, France Telecom, KPN, Austria Telecom, Telecom Italia, Telia, Telefonica and TDC have all

launched IPTV services to date, with BT planning to roll out its combined DTT/VOD service in the Autumn of

2006. Deutsche Telekom has recently announced that it will launch an IPTV service over VDSL in 2007, while

Swisscom’s IPTV plans have been delayed as a result of technical issues. Both France Telecom and Telefónica

have already established a strong foothold in their domestic markets, while other major services providers are

stepping up their efforts in an attempt to compete with their cable and satellite rivals, as outlined below.

• France Telecom’s IPTV service attracted 200,000 subscribers by the end of 2005, representing strong

progress over the course of the year. The service has now been extended – from February, customers

have been able to opt for the ‘Le Bouquet’ package, which provides access to over 200 channels and

the potential to access premium content from TPS and Canal+. Competition in the French IPTV market

is strong, with Neuf Cegetel, Free and Telecom Italia France all offering services, in some cases for

free when consumers subscribe to broadband services – the combination of low price points and pay-

TV operators’ willingness to provide content for the services have acted to drive uptake.

• Telefónica had attracted around 200,000 subscribers to its Imagenio service by the end of 2005. In

December 2005, the first true rival to Imagenio in Spain was launched by Superbanda, while Jazztel is

also set to enter into direct competition with the incumbent telco when it launches its IPTV service

nationally.




• Telecom Italia launched its Alice Home TV service in December 2005. Initially available in 4 cities to

around 2 million households, coverage was extended to 4 million homes by the end of January and will

be further increased to 8 million by the end of 2006. The operator plans to invest around €2.1 billion

($2.6bn) on broadband-related deployment and services over the next two years, with €350 million

($440m) of this spent on developing IPTV services. However, with FastWeb already well established in

what is arguably Europe’s most developed IPTV market, combined with satellite’s current pay-TV

dominance and the strong growth of DTT services, Datamonitor believes that Telecom Italia may

struggle to drive significant growth in the short-term. In order to succeed, the operator will need to

stress the convenience and cost advantages of opting for a triple play offering, an area in which

FastWeb is currently the only major competitor.

• Belgium – Belgacom launched its IPTV services in June 2005, beating cable rival Telenet to the punch

with regard to launching a digital TV service. Currently, around 62% of Belgian households are able to

receive TV services, with the combination of ADSL2+ and VDSL deployments likely to result in an

increase to nearer 80% by the end of 2006. By securing exclusive football rights in Belgium for both

domestic games and Italian Serie A matches, Belgacom has gained a strong position – the fact that the

operator does not force consumers to subscribe to a raft of other channels before being able to access

the football coverage is also seen as a positive move which is a marked departure from the strategy of

cable operators. Belgacom extended its VOD offering in December through a partnership with

DreamWorks which provides a catalog of around 300 movies.

• KPN – Dutch service provider KPN launched its IPTV service in May 2006 under the brand name

‘Mine’. At launch, subscribers will have access to 48 TV and 60 radio channels, with an expansion to 60

TV channels planned over the following months. The service also includes a VOD movie service

offering 300 titles, with KPN partnering with major content providers such as Warner Bros and

Blockbuster to provide the service. KPN expects to sign up around 10,000 subscribers by October, but

will have to compete with rival IPTV provider Versatel, which has acquired rights to the Dutch football

league.

• Deutsche Telekom has partnered with Microsoft in preparation for a planned launch of IPTV services

from mid-summer onwards; Initially, the service will only be provided in 10 German cities. For Microsoft,

it is the biggest IPTV deal in Europe and its second biggest global deal (the largest being with AT&T in

the US). The transition to digital services in Germany has been hindered by the availability of a large

number of popular channels which are provided for free, limited the appeal of paid services. German

IPTV providers have the opportunity to provide a new range of services (interactivity and VOD, for

example) that will convince consumers to make the switch from basic cable services.

• Telekom Austria, which had approximately 575k broadband subs at the end of 2005, launched Aon

Digital TV in January 2006 in Vienna – previously, it had offered PC-based video services via its Aon

TV service, but the latest offering extends connectivity to TVs. Aon Digital TV offers 50 channels and

VOD content.




• BT will launch its BT Vision service in the autumn, the first offering to combine IP-based VOD content

and free-to-air DTT through a single STB. Datamonitor believes that this will prove to be an attractive

combination, providing consumers with the ability to buy premium content without paying a subscription

fee for access to more mainstream broadcast programming. In preparation for the launch, BT has

boosted its broadband network capacity, and has agreed content deals with a number of major

providers including DreamWorks, Paramount, Warner Music and the FA Premier League (it has won

the ‘near live’ rights to top-flight football coverage from the 2007 season).

Despite strong support from European service providers, Datamonitor believes that IPTV will remain a relatively

niche proposition across much of Europe, with the platform facing stiff competition from existing cable and satellite

services and, increasingly, DTT – around 9.5 million IPTV subscribers are expected across the region by the end

of 2010, with fewer than 9% of digital households connecting via this means.

DTT – IPTV’s friend or foe?

Although DTT is expected to be the largest digital platform in the Europe by the end of 2010 with over 37 million

households connected, the core focus of the platform is likely to remain on free-to-air services – although pay-TV

services are available (TopUp TV in the UK, for example), the vast majority of households will not pay a monthly

subscription fee for DTT. As a result, Datamonitor suggests that the success of DTT can be leveraged by IPTV

operator in some markets.

In countries where DTT is growing rapidly, telcos have sought to partner in order to gain access to a broad range

of popular content. In France, for example, the TNT DTT channels are available via France Telecom’s IPTV

service, while Telefonica provides DTT channels via its hybrid IPTV set-top boxes. BT in the UK is the latest major

service provider to announce a tie-in with DTT – its IPTV strategy will be based around VOD content, with live

broadcast content delivered via Freeview. In other markets such as Sweden and Italy, Datamonitor believes that

DTT services are likely to provide higher levels of competition to IPTV services – in the case of Sweden, the pay-

TV DTT service is in direct competition with both cable and IPTV services, while Italian DTT benefits from access

to top-flight football coverage and a €70 ($88) subsidy per household for STB acquisition.

US market starting to gain traction

In the US, the IPTV market is starting to gather momentum and is now starting to develop beyond the rural

telephone companies who have been delivering TV content over DSL infrastructure for several years – today,

more than 200 US and Canadian telephone companies offer TV-based services over broadband IP networks. All

of the major US carriers have announced their IPTV development roadmaps and are currently undertaking either

limited market tests or technical trials, as outlined below.

• Verizon launched its FiOS TV service in September 2005 – the service is now available in 5 states

including Texas and Florida. The service currently offers 350 broadcast channels (including 20-22 HD

channels) and VOD. The service provider operators an unusual hybrid network that employs IP delivery

for VOD but QAM modulated signals (similar to cable networks) for broadcast TV – the choice of these




technologies was based on the telco’s desire to use proven technologies, rather than wait for IPTV-

specific technologies to reach maturity. Verizon’s fiber-to-the-home network is capable of delivering up

to 100Mbps to each home, meaning there is no need for advanced coding, even with HD.

• AT&T’s ‘Project Lightspeed’ aims to provide consumers with around 25Mbps capacity through which

television, telephony, and Internet access services will be offered. The project’s goal is to reach 18

million homes in 13 states by the first half of 2008. Unlike Verizon, AT&T uses fiber-to-the-node to feed

ADSL2+ copper networks in last mile. AT&T is in the process of introducing its U-Verse TV service

across this network.

• BellSouth’s IPTV plans are similar in nature to those of AT&T – the carrier intends to provide

consumers with at least 12Mbps of capacity via fiber to the node, fiber to the curb and DSL. BellSouth

doesn’t intend to deploy fiber all the way to the consumers’ premises, making the deployments less

capital intensive than Verizon’s offering. With AT&T set to acquire BellSouth, the latter’s IPTV plans

may fall by the wayside, although Datamonitor expects the deal to help drive developments of TV-

based services in the longer term.

Verizon had connected around 3 million homes with fiber at the end of 2005 and expects to add around 3 million

per year. Datamonitor believes that its strategy is a safe, but ultimately expensive and time consuming one.

Furthermore, the IP-centric plans of AT&T and BellSouth – which employ switched video technology – are likely to

prove more flexible in the long term, allowing an almost unlimited number of channels to be offered and potentially

enabling connectivity with other devices. Problems could arise with this infrastructure, however, when considering

the future need to deliver multiple HD feeds to a household – subscribers wanting to connect either a second TV

set or an HD PVR (which would require two concurrent HD feeds) could easily use up available bandwidth, forcing

the operators to deploy advanced compression technologies to reclaim capacity.

Datamonitor expects the US to be a more difficult market than Europe for IPTV, with high levels of pay-TV

penetration and expected strong price competition from established cable and satellite providers. IPTV operators

will need to pay particular attention to ensuring that their services are not only price competitive, but also deliver

services that are at least as good as existing offerings in terms of reliability, customer services and functionality.

Early suggestions indicate that the major US telcos are seeking to provide similar products to those already

available via cable and satellite – in such an intensely competitive industry, Datamonitor does not expect such

offerings to be hugely successful.

Europe set to maintain its early lead over the US

As illustrated in the following figure, the number of IPTV households is expected to grow rapidly in both Europe

and the US, with a combined 15 million subscribers expected across the two regions by the end of 2010. By the

end of the forecast period, IPTV will account for approximately 8.6% of digital households in Europe and 7.5% in

the US. Datamonitor expects IPTV to make further inroads into the digital TV sector beyond 2010, although

success will depend heavily on content availability and pricing strategies relative to established platforms.




Datamonitor expects France to retain a strong position with regard to IPTV deployment in Europe, accounting for

around 28% of households subscribing to the services by the end of 2010. The market conditions in France make

it an attractive market for IPTV provision, with cable penetration relatively low and strict conditions surrounding the

installation of satellite dishes on buildings. The early success of France Telecom’s MaLigne service (now

rebranded Orange TV), which had attracted around 200,000 subscribers by the end of 2005, underlines the

potential of the platform in France.

Figure 3: IPTV uptake comparison: Europe vs. the US, 2005-2010

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Datamonitor expects the number of European households subscribing to IPTV services to reach 2.3 million by the

end of 2006, increasing strongly to reach almost 9.5 million by the end of 2010. However, despite this strong

growth, IPTV will still only account for around 9% of total digital TV households across the region by the end of the

decade. In order to compete effectively with established pay-TV providers (and indeed FTA service providers, that

often provide a broad range of popular content for free), Datamonitor believes that IPTV providers will have to

compete strongly on price – as a result, deploying TV services may not prove to be a significant revenue

generating opportunity, although establishing a position in this emerging market will be crucial for service

providers seeking to protect their positions as prime providers of communication services. Service providers that

delay launching IPTV services may risk missing the chance of becoming key players in the evolving broadcast

market; cable providers in particular will increasingly deploy high-capacity two-way networks capable of offering

advanced services such as VOD and HD programming, limiting the potential of IPTV services which come to

market late with a similar offering.




Can telcos succeed in the pay-TV environment?

The key challenge for telecoms operators seeking to deploy IPTV services is to take market share from

established cable and satellite providers who have already gained a strong foothold in the pay-TV sector. In this

regard, Datamonitor has identified two main barriers for IPTV providers, as outlined below.

• Industry knowledge – the TV market is a new business area for most telecoms operators, requiring

strong partnerships with content providers to be developed. In order to combat this, a variety of

strategies have been employed by operators; while Belgacom has hired media specialists (its CEO is

the former head of RTL Group), Swisscom has acquired Cinetrade (a pay-TV and cinema group to

develop its media know-how. Datamonitor expects industry knowledge issues to become less apparent

over the coming years as operators ramp up their internal resources in this regard, while content will be

made widely available by content providers as the IPTV market develops.

• Technical issues – in order to compete effectively with digital cable and satellite services, IPTV

offerings need to provide the high picture quality that consumers demand. Minor issues currently being

experienced with some operators are likely to be quickly resolved, while Datamonitor also expects

installation times to fall as operators become more used to physical deployment and overcome initial

obstacles. Another current issue is the fact that it is currently difficult to service multiple-TV households

– indeed, network capacity constraints often prevent operators from providing IPTV services to more

than one TV set. However, Datamonitor expects such issues to be resolved as higher capacity

networks are deployed and new compression technologies are implemented.

Datamonitor sees IPTV primarily as a defensive move by the major service providers rolling out services. While

such services have the potential to generate additional revenues for operators, the key driver of deployment – in

the short term at least – will be improving customer loyalty and adding greater depth to the services provided to

consumers over ADSL networks. In some cases, IPTV may prove to be a financial loss leader, albeit an essential

one if telcos are to retain a significant position with regard to provision of consumer communication and

entertainment services. In the longer term, service providers will need to invest heavily on their network

infrastructure – Datamonitor believes that upgrading to either ADSL2+ or VDSL will become essential if a broad

range of services are to be deployed. When the cost of content acquisition, CPE subsidization and marketing are

factored in, it is difficult to see how the majority of operators will generate significant profit margins from IPTV in

the short term – especially considering the need to be competitive on a pricing basis to generate interest among

consumers.

Consolidation continues to have an impact on market dynamics

Cable consolidation boosts market potential

Consolidation of the European cable industry has continued over the past year, with resultant economies of scale

likely to enable operators to provide increased competition to both satellite operators (in terms of TV-based




services) and telecoms operators (in terms of both telephony and data services). Some of the more recent

developments in this regard are outlined below.

• French cable consolidation – the French cable market has undergone considerable consolidation

over the last two years. Now, pending terms and regulatory approval, the French network will come

under the ownership of a single company. In March, Liberty Global signed a letter of intent to sell its

cable business to Altice and Cinven. UPC France, which acquired its competitor Noos in 2004, was

valued at €1.25 billion ($1.55bn) – considerably higher than its cash flow. Shortly after the acquisition of

Noos by UPC France, Altice and Cinven acquired the cable businesses of France Telecom (FT Cable)

and Canal+ (Numéricable). Upon completion of the acquisition, Altice and Cinven hold a dominant

position in the French cable network.

• Unity in the German cable market – there was much needed consolidation of the German cable

market in 2005, with first iesy and ish merging under the Unity Media brand, and the combined operator

then acquiring level 4 operator Tele Columbus. The deals mark the first major step in the consolidation

of level 3 and 4 networks in Germany, creating a combined company that will directly provide around

4.5 million households with TV services. Datamonitor believes that such activity is crucial if the German

cable market is to generate the economies of scale needed to provide impetus for digital development.

• ONO acquires Auna – ONO, in partnership with a consortium of private equity partners, acquired the

cable assets of Auna in August 2005 for €2.5 billion ($3.1bn). The two companies had been closing in

on a merger for over a year, with ONO rebuffing a €2.4 billion ($3bn) offer from Auna in November

2004 before tables were ultimately turned with this deal. The merger of the companies’ cable

operations extends combined reach to 6 million Spanish homes, or around 40% of total households.

However, with strong competition from both Digital+ and Telefónica, Datamonitor believes that the

operators will need to compete strongly on price in order to gain market share.

• NTL and Telewest merge at last – the UK pay-TV market has also seen consolidation activity in the

last year with the two leading cable operators, NTL and Telewest, finally agreeing to merge in August

2005. NTL purchased Telewest in a deal worth around £3.4 billion ($6.1bn), creating a company that

has around 5 million subscribers. The merger was essential for the prospects of the UK cable sector;

without the economies of scale created by this move, the companies would doubtless have continued

to struggle to compete with Sky (on a pay-TV basis) and BT (on a telephony and Internet basis).

• Liberty Global now has operations in Switzerland (following it acquisition of Cablecom), the

Netherlands and Belgium. Although the group has recently sold its interests in UPC France and UPC

Sweden, it remains an important player across the European cable sector. Datamonitor expects Liberty

Global to focus its efforts on its Eastern European investments, while its French exit is in line with its

gradual withdrawal from ‘sub-scale’ markets where there are limited opportunities for significant growth.

UPC Sweden was sold to Providence Equity Partners and Carlyle Group, which has also acquired

ComHem to create a strong position in the Swedish market.




• Adelphia still awaiting sale to be finalized – midway through 2002, Adelphia, a cable operator with

approximately 5 million US subscribers filed for Chapter 11 bankruptcy protection. A significant level of

debt forced the company to undertake a significant restructuring process, including delisting from the

NASDAQ. As a result, Time Warner cable and Comcast agreed to purchase the majority of Adelphia’s

assets in 2005 to the value of $17.6bn in cash and stock. While the deal has not yet been finalized,

Adelphia has asked the bankruptcy court to expedite matters, with completion by the end of July 2006

now widely anticipated.

Satellite consolidation expected in France

There has been significant consolidation activity in the French cable market, the French satellite market is also

seeing some of the action, with Canal+ and TPS expected to merge their operations in 2006. The merger of

Group Canal+ and TPS in France would be controlled by Vivendi Universal (85% share), TF1 (9.9%) and M6

(5.1%). At this stage, only a draft commercial agreement has been signed by the relevant parties – any

subsequent approval of that draft would still leave the merger subject to approval from the French competition

authorities, the French broadcasting authority and relevant unions. However, with similar moves in the Italian,

Spanish and UK satellite markets proving successful in terms of driving digital adoption, Datamonitor expects the

potential merger to occur with few problems. Pooling resources would allow the satellite operators to combat the

growing threat from telco- and Internet-based TV services, with the a merger helping to prevent the costly content

wars that have impacted upon profitability over recent years, while providing greater negotiating power with

content owners and offering improved economies of scale.

In the US, DirecTV is still believed to be interested in buying rival US satellite operator EchoStar, although

regulators seem unlikely to allow such a deal to take place in the short term at least. The two companies tried to

merge in 2002, but the deal was blocked by the FCC, who felt that it would be anti-competitive – with little having

changed in the past 4 years with regard to market structure, Datamonitor believes that similar restrictions will

remain in place. A merger would enable the satellite operators to compete more effectively with cable operators,

and could have a major impact on the dynamics of the US digital TV market – successful satellite mergers across

a number of European markets (including Italy, Spain and the UK) have highlighted the benefits of consolidation

with regard to improving economies of scale and increasing rates of uptake.

Pay-TV operators are seeking to extend the scope of their offerings via acquisitions

While a number of deals have acted to increased levels of consolidation across the pay-TV sector, several

acquisitions aimed at allowing operators to develop their strategies in what are currently non-core areas have

taken place over the course of the past 12 months. Developments in the UK in particular highlight the fact that

pay-TV operators are seeking to extend the scope of their offerings to offer the potential to launch new services

and gain a greater share of consumer spending with regard to communication and entertainment services.

• NTL acquires Virgin Mobile – in early 2006, NTL agreed to acquire MVNO Virgin Mobile for £962

million ($1.7bn), creating the first quad-play offering in the UK. Virgin TV – as the combined company is

expected to be rebranded later in the year – will offer consumers cable TV, broadband and both fixed-




line and mobile telephony services. The strategy of offering a bundled solution of this type is not a new

one, nor is it limited to the UK – mobile operator Sprint, for example, provides mobile phone services to

customers of the main cable operators in the US via a series of partnerships. However, this acquisition

is a notable development due to the level of investment undertaken by NTL – other deals have been on

a partnership basis rather than involving an actual purchase.

• BSkyB branches into broadband with Easynet purchase – in late 2005, BSkyB acquired UK

broadband operator Easynet for £211 million ($380m) in a move that is the first step towards the

company’s goal of deploying a full triple play of entertainment and communications services. Easynet

has made more progress than most of its rivals in terms of exploiting local loop unbundling

opportunities, with its equipment now residing within around 250 BT exchanges. Sky will be able to

leverage its considerable content assets to offer IPTV and VOD services to extend coverage to those

households that cannot access satellite service, notably those in multi-tenant units and those without

necessary line-of-site – having access to Easynet’s expanding network will allow Sky to offer these

services without having to rely on third party network providers. BSkyB is already offering its

subscribers access to a PC-based VOD offering, although this is only likely to be a short-term measure

in preparation for a true VOD service.

Datamonitor believes that more deals of this type will emerge over the coming 2-3 years as pay-TV operators

seek to extend their coverage and develop their distribution strategies. Offering triple- or quad-play services will

become increasingly crucial as competition for subscribers continues to grow – the ability to offer bundled

services, whereby consumers are offered discounted rates for taking multiple services, is likely to be particularly

crucial. Datamonitor believes that US satellite operators will increasingly seek to offer triple-play services,

although the local loop unbundling regulations seen across Europe are not evident in the US, making it

problematic for DirecTV and EchoStar to exploit DSL-related opportunities without partnering with existing

providers. Industry speculation suggests that DirecTV is looking at WiMAX broadband wireless technology as a

potential way to circumvent this obstacle, while EchoStar is considering a range of options including two-way high-

speed satellite and developing marketing relationships with telcos. Satellite operators in particular are also

expected to follow BSkyB’s lead and evolve their strategies in order to offer a more comprehensive range of

services to meet the changing demands of consumers.




TECHNOLOGY DEVELOPMENTS IN THE DIGITAL TV SECTOR (TECHNOLOGY FOCUS)

Summary

Competition across the broadcast sector is now greater than ever before, prompting operators to develop their

offerings to both attract and retain subscribers. Operators are increasingly embracing new technologies to achieve

this goal – Datamonitor expects 2006 to be a watershed year in Europe for new services such as high-definition

TV, IPTV and mobile TV, while uptake of PVR technology is set to increase rapidly over the next five years. Key

findings of this brief include:

• high definition expected to become a major service differentiator;

• increasing penetration of PVRs could disrupt existing broadcast business models;

• mobile TV offers new opportunities for broadcasters.

High definition expected to become a major service differentiator

High-definition TV (HDTV) offers a significant improvement in quality of broadcast TV content – in many respects

it is the first step-change in picture quality since the advent of color TV. While HDTV broadcasting has been

available in the US since 1998, European operators are only just starting to roll out commercial services.

Datamonitor believes that HD will become an increasingly crucial component of pay-TV operators’ digital

strategies, with the availability and range of HD programming providing an important differentiator over the next

few years as competition for new subscribers increases.

The US leads the way with regard to high definition

In the US, sales of HD TV sets are around three years ahead of the European market, with approaching 20% of

US households believed to own an HD-capable TV by the end of 2005 – 87% of US households are already

passed by at least one cable operator offering HD services. In contrast, there were only around 2 million ‘HD

ready’ (i.e. with an HD-capable TV) households in Europe at the end of 2005, although the vast majority of these

sets not connected to HD programming due to very limited rollout of service. This, coupled with the fact that the

difference in quality between standard definition and HD programming is not as noticeable in Europe as it is in the

US due to differences between the broadcast technologies used, is likely to result in a continued gap between

development in the two regions. In addition, the fact that average screen sizes are larger in the US means that

demand for HD services are likely to be greater, with picture quality improvements more noticeable on bigger

screens.




Satellite operators playing catch-up in the US

Over the course of the past two years, both DirecTV and EchoStar have been investing heavily in preparation for

expansion of their HD services. Overall, satellite continues to be at a disadvantage over cable for HD as both

operators build out infrastructure and await a greater supply of MPEG-4 STBs. To date, the satellite operators

have matched cable with regard to national HD services, but have lagged behind in terms of local programming

due to capacity constraints. Datamonitor expects the local HD advantage that cable currently holds to be erased

as both satellite operators deploy true local HD channels using MPEG-4 compression and increasing capacity

coming online from recent satellite deployments. Approximately 50% of satellite households are expected to be

covered with local HD services by the end of 2006; at CES 2006, EchoStar announced that it would offer local HD

programming to 50 markets in 2006, while DirecTV has similar expectations.

Pricing and programming selection will become increasingly important

Pricing will remain an important factor in the US HD market. At present, DirecTV charges $399.99 for an HD-DVR

devices, plus $9.99 per month for HD channel access, while many cable operators currently offer devices for no

upfront fee and provide a basic level of channels for no fee, highlighting the current advantage that cable currently

holds in this regard. However, in the long term, it will be the quality and quantity of HD programming available that

will differentiate services – Datamonitor believes that satellite operators hold the long-term advantage here, with

DirecTV expecting to be providing 150 national HD channels by 2007 – in order for cable operators to match this,

they are likely to have to reclaim analog spectrum in order to provide sufficient capacity, which would involve

increased capital spending and a major push towards digital migration across their subscriber bases. It seems

likely that both DirecTV and EchoStar will have a significant lead over cable operators once upgrades have been

undertaken, with increased capacity enabling the rollout of a far broader portfolio of HD programming than is

currently available.

World Cup boost for European HD market

European operators are well behind their US counterparts with regard to HD development – Euro 1080 was the

first operator to broadcast in high definition in Europe, but its rather limited content portfolio has restricted

consumer demand. However, more mainstream pay-TV operators are now starting to roll out services – both

Telewest and Premiere launched initial services in late 2005, while BSkyB and Sky Italia are now providing

services. A number of European operators and broadcasters have launched HD services in time for the football

World Cup – Premiere, TPS, Sky Italia, Canal Digital and the BBC all broadcast games in HD. With the European

pay-TV market beginning to reach maturity, operators have high hopes for HD as a way to increase ARPU,

reduce churn and increase subscriber numbers – indeed, BSkyB sees HD as a key element of its mission to reach

10 million subscribers by 2010.

The 2006 football World Cup has acted as a catalyst for the first meaningful stage of HD development in Europe –

Datamonitor expects steady adoption over the next two years, with only early adopters willing to invest in the

devices and subscriptions needed to receive HD content. The price of flat-screen HDTV sets is set to fall

significantly over the next few years, providing incentive for households to make the transition – current average




HDTV prices of around $1,800 in Europe are too high to prompt mass-market development, with this price

probably needing to drop by almost 50% before strong market growth can be expected.

European satellite operators pushing ahead with HD

As expected, early developments in the European HD market have been primarily on satellite platforms – satellite

operators have historically been the first to offer new technologies to their subscribers. Although the cable sector

has often lagged behind satellite with regard to technology development, some cable operators have kept pace in

terms of deployment of HD services, notably Telewest in the UK and UPC in the Netherlands. Some of the main

HD service launches to date are highlighted below.

• Premiere was the first major European pay-TV operator to launch a commercial HD service – the

German satellite operator launched its HD service in November 2005, featuring three specialist

channels for sport, film and documentary programming. However, a shortage of necessary STBs and

limited sales of HD-capable screens has resulted in relatively limited uptake of the service to date.

• Telewest was the first UK operator to launch a nationwide HD service in the UK. The service, which is

available to over 4.5 million homes and costs an extra £10 ($18) per month, requires subscribers to

upgrade to the new TVDrive PVR device, which incorporates a 160GB hard drive. While rival pay-TV

operator Sky offers HD services via a number of dedicated channels, Telewest’s HD content is

currently only available via its on-demand service, Teleport. BSkyB launched its HD service in May –

subscribers to the service will need to pay £299 ($540) for the Sky HD set-top box and an additional

£10 ($18) per month on top of their existing subscription fee.

• TPS’s HD service, jointly promoted by the operator and Sony, was originally planned for 2005, but was

delayed due to an MPEG-4 chip shortage – 10,000 pre-registered subscribers finally received their

HDTV decoders in March. The HD STB costs subscribers an additional €5 ($6) per month compared to

the standard TPS decoder – Datamonitor believes that this is a relatively small premium to pay for HD

services, and should, therefore, help to drive strong interest across TPS’s subscriber base. Rival

French satellite provider, CanalSat, rolled out HD service in time for the World Cup, with a full bouquet

of HD channels expected over the coming months.

• UPC Netherlands have rolled out an HD service in time for the World Cup in partnerships with STB

manufacturer Philips. For a one-off activation fee of €49.99 ($63), UPC’s digital TV subscribers receive

a Philips HD STB and access to two HD channels (one movie channel, one sport). The two companies

are jointly marketing the service alongside Philips’ range of HD-ready flat screen TVs.

• Sky Italia launched its HD service on May 17th with coverage of the European Champions League

football final. Following its coverage of the World Cup, Sky Italia will launch its HD channel bouquet,

which will cost subscribers an extra €7 ($9) per month.

European operators have struggled to date to obtain sufficient numbers of HD-capable STBs – delays relating to a

shortage of the necessary MPEG-4 chipsets have restricted availability, with Sky in the UK believed to be

particularly affected by the problem. Sky was forced to delay the installation of HD in around 17,000 homes




following early delivery issues with STBs from partner Thomson. The operator has announced that around 40,000

consumers signed up for the service in the first three weeks after launch, although admitted that some of these

would not have the necessary equipment installed prior to the start of the World Cup – a major reason why many

subscribers would have made the investment in the first place. Hence, although the World Cup could have

provided a perfect catalyst for HD development in Europe, the opportunity is likely to be somewhat missed –

although the long term future of HD in Europe is unlikely to be unduly affected, current supply issues could

certainly act to restrict uptake in 2006.

HD services unlikely via DTT in the short term

Although HD services are unlikely to emerge on DTT platforms in the short term due to a lack of available

spectrum prior to analog switch-off, a number of trials are ongoing across Europe to assess the viability of such

services. In the UK, major broadcasters (including the BBC, ITV, Channel 4 and Channel 5) are undertaking a six-

month DTT HD trial, using local frequencies to showcase a selection of HD programming including World Cup

coverage. Trials are also anticipated in France following regulatory approval for a 9-month test phase in a number

of key cities. Once spectrum is available, Datamonitor expects DTT to rapidly become a key platform for HD

services, with the FTA focus of digital terrestrial services in most markets helping to establish HD as a

mainstream, rather than pay-TV, service.

The US will retain its early HD lead over Europe

As shown in the figure below, Datamonitor expects the US to retain its significant lead over Europe with regard to

the penetration of HD services by the end of the decade. By the end of 2010, over 50 million US households will

be viewing HD programming (i.e. they will have invested in an HD-capable television and the necessary STB and

subscription needed to receive HD), representing almost 45% of all TV households across the country. In contrast

only 12 million (or c8% of TV households) will have made the transition by this time.




Figure 4: High definition households in Europe and the US, 2006-2010

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The fact that many European households, especially in highly cabled markets, have yet to even make the

transition to standard definition digital services suggests that consumers are relatively uninterested in the

investing in technologies that help to improve picture quality. While some consumers may make the jump directly

from analog cable services to high definition, Datamonitor expects the nascent European HD market to primarily

attract high-spending early adopters. Although early uptake in Europe is therefore expected to be relatively

limited, it is crucial that pay-TV operators offer HD services in order to reduce the likelihood of its top-tier

subscribers switching to rival providers.

The European HD market is only just beginning to emerge in 2006, with significant early adoption likely to be

limited to the more affluent Western European markets where investment in the equipment needed to watch high

definition programming is less of an obstacle to growth. The fact that many European TV markets are still at the

early phase of digital development will also hinder the potential of HD, while the prominence of FTA services in

many markets (notably Italy and the UK) will result in limited uptake. In contrast, the US market is pay-TV centric,

with operators already seeing HD as a ‘must-have’ rather than a service that can be deployed to differentiate its

offerings from those of rival providers. Datamonitor believes that HD will remain a relatively niche proposition in

most European markets by the end of the decade, with the potential exception of the UK where expected success

of BSkyB’s recently launched service will help to drive uptake to over 3 million households by this time.




Revenue opportunities may fall as HD becomes more widespread

In the short term, Datamonitor believes that operators will be able to extract significant additional revenue from HD

subscribers, with early adopters of the technology willing to invest in both the necessary hardware and content

subscriptions in order to receive such services. Pay-TV operators realize that those consumers willing to invest in

relatively high-priced HD-capable displays are also likely to be willing to pay a premium for access to HD

programming – European operators have already watched on as their US counterparts have charged consumers

for HD devices and subscription fee to watch a relatively limited range of channels. In the longer term, however,

HD is likely to become the de facto standard for broadcast transmission, reducing its impact as a revenue driver –

operators must therefore look to generate significant interest over the next few years in order to truly benefit from

the rollout of HD services.

With uptake likely to remain relatively low in Europe over the next few years, Datamonitor does not expect HD

services to benefit operators significantly with regard to net additions. However, rolling out HD is a good defensive

strategy, with operators that deploy services likely to experience reduced churn rates and those that delay launch

potentially experiencing a degree of subscriber defection. While the impact with regard to subscriber numbers will

not be significant in the short term, attracting high-spending subscribers will help to boost ARPU, while HD market

leadership will become increasingly important as services begin to target the mass market of consumers. In

addition, with high definition services initially limited to the pay-TV sector, a possibility is presented to operators

with regard to attracting consumers who have not previously had pay-TV services but want to receive HD services

– with FTA DTT services still some way off this offers an opportunity to extend the reach of digital services in

general.

European broadcasters remain undecided with regard to HD formats

With the European high definition market still in the early stages of its development, broadcasters across the

region are still developing their strategies with regard to the provision of HD programming. A key area of debate at

present involves deciding upon which high definition transmission format should be use; HD content is essentially

broken down into two competing formats, 720p and 1080i, with these transmission formats currently being used in

every HD broadcast worldwide.

• 720p – the progressive scan format produces better quality, in particular for fast-moving content such

as sports. There is less blurring, as the entire video is broadcast every split second, rather than the

flickering that may sometimes appear with interlace formats. Progressive formats also offer advantages

with regard to the broadcast of movies, as studios typically shoot films in this format – a broadcaster

using 720p will therefore be able to offer superior image quality. However, because the complete video

frame is being transmitted each time, rather than just half of the video as in interlaced, it requires twice

as much bandwidth – a significant factor in today’s bandwidth constrained broadcast networks.

• 1080i – in an interlaced system, half the lines of the video signal are displayed on a TV screen

alternately, one after the other. The lines are displayed 1/50th of a second apart in Europe, and 1/60th of

a second apart in the US – the difference being due to the competing broadcast formats (PAL and




NTSC) used in the two markets. In Europe, producing content in 1080i has a major advantage over

720p in those networks where content is transmitted in both SD and HD, as SD content is transmitted

in 625i and it is much easier to downgrade content in the same format than it is to downgrade and re-

code the content into another format. Broadcasters with large back catalogs of non-sports/movie

content are likely to focus on 1080i, given the relative simplicity (compared to 720p) in upgrading the

archived content to 1080i.

In the medium term, Datamonitor expects the newer progressive scan format (720p) to take the lead in terms of

market share due to the prominence of sports and movies with regard to pay-TV services. However, recent

Datamonitor research among European broadcasters suggests that there remains a high degree of indecision

with regard to which of the formats to use – of the 200 broadcasters surveyed in late 2005, 70% were still

undecided as to whether they will broadcast in 720p or 1080i. The few broadcasters that have already made a

decision show a preference for 1080i, although the size of the sample is too small to indicate a definite trend or

preference across the sector as a whole.

Figure 5: European broadcasters remain undecided with regard to HD standards

In which format do you expect to broadcast your HDTV content?

Undecided(70%)

A combination(8%)

1080i(16%)

720p(6%)


As expected, some broadcasters will support both formats depending on the type of content being transmitted.

Pay-TV operators are also likely to support both formats in order to provide high quality regardless of the format

used by the content provider – BSkyB, for example, support both formats, allowing it pick and choose content

from a wide variety of broadcasters.

Transition to MPEG-4 essential for HD deployment

In addition to selecting the transmission format, operators have also had to decide upon which compression

format to use to support the development of HD services. The MPEG-2 broadcasting technology that is widely




used across the digital TV sector for standard definition broadcast does not provide sufficient compression to

allow most operators to deploy a widespread HD service due to the high bandwidth needed to provide HD

channels. Datamonitor expects MPEG-4 to be the most widely deployed next-generation compression format

among established operators (DirecTV and BSkyB have committed to the format), with Microsoft’s WM9 likely to

gain greater traction with emerging IPTV providers – the fact that WM9 currently offers superior compression rates

to MPEG-4, which will be crucial in delivering HD content via European DSL networks.

To make the transition to either of the new compression technologies requires operators to deploy new STBs,

although in the short term only HD subscribers are likely to be required to make this transition due to the high

costs involved with migrating an entire customer base to MPEG-4 or WM9 devices. Datamonitor believes that

operators will increasingly move straight to MPEG-4 or WM9 rather than test the water with lower priced MPEG-2

HD formats in an attempt to remove the need to force consumers to regularly update their STBs.

Key success factors for European HD market development

Datamonitor has identified three key factors that will influence the pace of development with regard to the

European HD market.

• Improved consumer awareness is needed – with high definition services only just starting to make

their mark across Europe, consumer understanding is still limited. While ‘HD ready’ logos are now

commonplace and have helped to reduce confusion with regard to TV purchases, many consumers are

still unaware of the investments that they need to make with regard to STB equipment and pay-TV

subscriptions to actually receive HD programming.

• HDTV prices must continue to fall – unless prices of HD-capable sets continue to fall, the European

market will simply not take off to any meaningful extent. Although prices have fallen considerably in

recent years, price points of LCD/plasma screens (which account for the vast majority of HD TV set

sales) are still far higher than more traditional CRT sets. Unless this situation changes (Datamonitor

hopes and believes it will), HD development is likely to focus in the wealthier Western European

markets. In addition, mass market uptake of HD services will not occur until the STB prices and

subscriptions fall, or are removed completely.

• More native HD content needed – with the exception of live sports broadcasts, much of the HD

content provided in the US is converted from standard definition recordings, reducing visual impact

levels. Datamonitor expects the falling prices of HD equipments to drive the provision of more native

content (i.e. that filmed using HD cameras), which would in turn increase the appeal of HD services.

With many broadcasters across Europe including the BBC now shooting in HD, this situation is likely to

be resolved relatively rapidly.

Although a number of obstacles are likely to restrict widespread uptake of HD services across Europe in the short

term, Datamonitor expects significant progress to be made over the next five years. By rolling out high definition

services, digital TV operators have the opportunity to extend the value proposition to subscribers, helping to boost

satisfaction and potentially reduce churn levels. Whether the European market can gain parity with the US with




regard to HD over the next 10 years remains to be seen; continuing development of the digital TV market in

general suggests that high definition services will soon become widely deployed, although slow progress in across

the cable sector could impact upon overall development levels. Only when DTT platforms (in particular FTA DTT)

begin to roll out HD services will HD penetration rates begin to come close to those in the pay-TV dominated US

market.

Increasing penetration of PVRs could disrupt existing broadcast business models

Hard disk-based recording devices (PVRs or DVRs, depending on preference for European or US terminology)

have been around for several years, with standalone devices from TiVo starting the ball rolling in 1999. The rollout

of PVR services is central to pay-TV operators’ strategy of increasing ARPU and driving subscriber loyalty.

Offering subscribers the ability to upgrade to PVRs provides operators with the potential to derive increased

revenues from the higher subscription and device fees, while consumers taking a PVR are deemed less likely to

move away from a platform or indeed higher subscription tiers. However, outside of the US (and to an extent, the

UK), uptake has been disappointing to date.

PVRs present a significant threat to traditional business models

PVRs could prove to be a very disruptive technology across the broadcast sector – the fact that consumers are

able to skip advertisements could have a major impact on the business models of broadcasters and platform

operators alike. However, to date, penetration of such devices has only reached significant levels in the US,

where around 18% of households are expected to have a PVR by the end of 2006. In contrast, the European

market has yet to gain any real momentum – fewer than 2% of households are expected to have a PVR by the

end of the year, with BSkyB accounting for a significant proportion of these. As such, the true impact of PVRs may

not be felt for some time, although broadcasters and advertisers must begin to consider how to evolve their

strategies to meet the challenges created by a mass-market move to time-shifted viewing.

PVR owners likely to watch more programming, but fewer adverts

Studies suggest that PVR owners watch up to 20% more television than those without such a device – the fact

that content stored on a PVR is selected specifically by the viewer makes it more likely that they will watch more

of it. In the pay-TV environment, where hundreds of channels are on offer, the ability to tailor viewing habits and

allow consumers to watch programming whenever they want to – and without the interruption of adverts – is a

highly attractive proposition. However, while benefits for consumers and operators are clear, the potential impact

on the advertising market is expected by many to be significant; a number of end-user studies suggest that more

than 40% of PVR owners no longer watch any adverts while watching content in a time-shifted manner,

significantly depleting the impact of TV advertising and therefore affecting the prices that advertisers will be willing

to pay for airtime.




US networks look to the positives of PVRs

While many industry observers continue to stress the potential impact of PVRs on advertising revenues, the major

US networks – which have much to lose if the prophecy proves to be accurate – have been keen to stress the

potential benefits of the devices. Recent research commissioned by six major networks seeks to ally the fears of

their advertising partners, with survey results suggesting the PVRs will actually boost TV audiences by attracting

viewers who may otherwise have missed the shows when first broadcast. While the research suggested that 90%

of viewers skip commercials when watching programming in a time-shifted manner, 58% of respondents claim

that they still pay attention to the adverts in fast-forward mode.

Product placement likely to feature more prominently

Datamonitor does not believe for one second that the TV advertising market is set for a slow death. However,

channel operators and advertisers will need to overhaul their strategies in response to the increasing penetration

of PVRs, especially in the US where uptake is expected to have reached significant levels by the end of the

decade. Datamonitor believes that there will be a renewed focus on program sponsorship, on-screen mini-

adverts/logos and targeted advertising via the two-way networks deployed by IPTV and some digital cable

operators. Product placement within TV shows is also expected to become particularly popular. Product

placement (across TV, films, magazines and video games) was a multi-billion dollar market in the US in 2005 –

the market is expected to show continued growth, with the chairman of CBS recently predicting that three-quarters

of all scripted prime-time TV programs would soon include paid product placement. In the US, product placement

has had the greatest impact when used alongside traditional 30-second ads – Coca Cola found that audience

recall for their ads was up 49% during American Idol, which was full of product placement.

At present, restrictions over product placement in Europe are very strict; different rules apply across the EU, with

only Austria allowing this practice to be used. European broadcasters in general are allowed to feature

‘surreptitious advertising’, although this has been interpreted differently across the region, prompting a more

unified approach to be developed; European TV companies are set to be allowed to charge for featuring products

in programs following new EU recommendations. European broadcasters and content providers have long argued

that they should be able to exploit this revenue stream, which has been highly successful in the US. Datamonitor

believes that they new guidelines could provide the opportunity for commercial broadcasters to develop new

advertising revenue streams to combat the impact of PVRs.

The US PVR market is well established, while Europe lags behind

As shown in the figure below, PVR penetration is expected to grow strongly over the next few years – by the end

of 2010, 50% of US households and 13% of European homes will have a PVR. PVR availability is high in the US,

with all major operators offering the devices; US cable operators charge an average of an additional $9.95 per

month for PVRs, with widespread availability boosting uptake to over 20% of digital subscribers of Comcast and

Time Warner Cable. DirecTV launched its own standard DVR device in October 2005, severing its previous ties

with standalone device provider TiVo. Th operator introduced a $30 million advertising campaign to promote its




new offering, the first major marketing effort to distance itself from TiVo and attempt to attract some of the 2.3

million DirecTV subscribers with a TiVo to its own service.

Figure 6: PVR households in Europe and the US, 2006-2010

0

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50,000

60,000

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

10%

20%

30%

40%

50%

60%

% o

f TV

hou

seho

lds

with

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Europe US % with PVR - Europe % with PVR - US


BSkyB has forged a strong position with regard to PVRs, with almost 1.3 million of its subscribers opting for its

Sky+ service by the end of 2005. Although the operator no longer charges a monthly subscription fee to high-end

subscribers (and hence direct revenue returns are limited), churn rates among Sky+ subscribers are far lower

than across the wider subscriber base, highlighting the appeal of such devices. Satellite dominates European

progress with regard to PVRs, with Premiere, Viasat and Canal Satellite and BSkyB all offering the devices.

However, in stark contrast to the US market, cable operators have not yet made a significant impression on the

European PVR market, with Telewest, NTL, Telenet and Casema only recently deploying the devices.

Satellite operators are also likely to utilize push-VOD services to provide subscribers with instant access to

popular titles – Premiere launched a PVR-based service last summer, providing a selection of around 30 movies

that are updated weekly. BSkyB is also considering the launch of push-VOD on its Sky+ service – all PVRs

currently being shipped include reserve storage capacity that could be used for such as service, while its HD

PVRs also feature an Ethernet port to allow DSL connectivity in the longer term. Although push-VOD is an

effective way to deliver a limited selection of content, it cannot compete with the vast libraries of true VOD content

that are becoming commonplace on systems that employ two-way networks.




Will European pay-TV providers offer PVRs in place of standard STBs?

Although providing subscribers with PVR devices as standard would offer considerable benefits with regard to

reducing customer churn, Datamonitor expects European pay-TV operators to continue to position PVRs as a

premium offering for the foreseeable future – not only would providing new subscribers with PVRs for no

additional fee be costly, but it would also aggravate existing subscribers who would likely still need to pay for an

upgrade (a wholesale box switch-out seems highly unlikely). Datamonitor believes that it is unlikely that European

operators will provide PVRs as the standard device for new subscribers in the short term for the following reasons:

• High deployment costs – the costs involved in providing PVRs for free would be much higher than is

currently the case with standard STBs. In addition, operators who decide to offer them to new

subscribers would be forced to consider a swap-out of all devices in order to keep existing subscribers

happy – this would be hugely expensive, potentially in excess of $2 billion for an operator of BSkyB’s

scale.

• Lack of cable competition – the fact that cable companies do not provide significant pay-TV

competition in most European markets means that satellite operators do not need to differentiate their

offerings substantially. If, however, with some cable operators (and increasingly, IPTV providers)

providing VOD services, PVR rollout would become a more attractive proposition to pay-TV operators.

The possibility of providing PVRs as standard in the US market is more likely, where very high levels of pay-TV

competition mean that operators need to differentiate their services in order to win new business. Whether this

strategy will be followed remains to be seen, although Datamonitor certainly expects downward pressure with

regard to monthly subscription over the next 2-3 years.

Potential for expansion into the FTA sector

At present, PVR uptake has been largely limited to the pay-TV sector, with operators rolling out devices in an

attempt to boost subscriber revenues and reduce churn levels. However, Datamonitor believes that DTT will be an

increasingly important platform for PVRs over the next few years. To date, PVR uptake across the DTT market

has been very limited, with the majority of households opting for low-cost STBs. However, the falling costs of DTT

PVRs is expected to prompt increased interest among consumers – in the UK, such devices can now be acquired

for around £120 ($215), which will boost appeal. Given the expected rapid growth of the DTT market across

Europe, Datamonitor believes that PVR manufacturers and their distribution partners should ramp up their focus

on the platform in order to exploit what will be a major area of opportunity.

In the UK, Freeview plans to launch a digital video recorder brand in order to increase consumer awareness of the

technology and boost uptake of devices. Recent research has highlighted the fact that awareness remains low,

while only a small proportion of the c7 million UK DTT households have invested in a PVR. The ‘Freeview

Playback’ brand hopes to achieve this goal, while manufacturers and retailers will be urged to use more consistent

terminology to reduce consumer confusion. Datamonitor believes that more widespread marketing campaigns of

this nature will be needed across Europe if PVRs are to show significant uptake across the FTA sector, with both

DTT and the German FTA satellite sector offering strong potential for equipment manufacturers.




Network PVR services have potential, but deployment won’t be easy

In March, US cable operator Cablevision announced the launch of a network PVR offering, whereby content is

stored on centralized servers. The system provides similar functionality to the hard disk based devices that have

been commonly deployed across the US by rival pay-TV operators, but allows consumers with standard STBs to

receive the same benefits without needing to upgrade their device to a more expensive DVR box. As well as

providing cost benefits for its customers, Cablevision also expects to save money by removing the need for

sending an installer out to subscribers’ homes to upgrade STBs.

However, seven leading movie and TV producers have filed a lawsuit against the cable operator, claiming that the

proposed services break copyright laws – Cablevision has argued that it does not to obtain additional content

rights for the service, as it is essentially no different to distributing PVR devices to its subscribers. Time Warner

Cable assessed the potential of deploying network PVR services several years ago, but shelved plans having

concluded that their were too many copyright hurdles to overcome. Datamonitor believes that many rival cable

operators will be watching the outcome of the lawsuit carefully, with the clear economic benefits of centralizing

storage making such services highly attractive. IPTV service providers will also seek to offer network-based PVR

storage in order to leverage the two-way, high capacity nature of their networks.

Mobile TV offers new opportunities for broadcasters

The emergence of mobile broadcast TV services provides broadcasters with yet another new distribution channel

through which they can deliver content to consumers. Although Datamonitor does not expect mobile TV uptake to

reach mass market proportions over the next few years, the market is expected to develop considerably over the

remainder of the decade, providing significant new opportunities for companies across the value chain –

broadcasters, device manufacturers and network providers all stand to benefit considerably from these new

opportunities.

Mobile networks are not best suited to the demands of mass market video services

Mobile operators are already offering video download services to their customers on 2.5 and 3G networks, but

these are not true broadcast TV services. The content is streamed to subscribers’ phones when it is requested

using the operator’s 2.5/3G network infrastructure. Initially these offerings began as video download services, but

now it is possible to access content such as news channels, cartoon channels, music channels and (the extremely

popular) reality TV channels. Early evidence suggests that these services are attracting more consumers than

originally expected, prompting operators and broadcasters alike to focus increased efforts on mobile TV

opportunities. However, 3G networks do not have the capacity needed to support mass market services,

prompting operators to examine the possibilities of offering services over broadcast networks.




Broadcast technologies battling it out for supremacy

There are essentially three different technologies fighting it out to be the standard for mobile TV broadcast

technology – DVB-H, DMB and MediaFLO –a fourth, ISDB-T, unlikely to gain any traction outside of Japan. DMB

was the first technology to be used in commercial services (in South Korea), while commercial services built on

DVB-H are in the process of being deployed in Italy. The following figure provides a brief overview of each of

these technologies in addition to Datamonitor’s opinion with regard to its market potential.

Figure 7: Mobile TV broadcast technology overview

• Developed in Japan. The open standard was created for digital radio, video and multimedia services, and the Japanese DTT network began broadcasting in 2003 using the standard.

• Currently operates via continuous transmissions, which reduces the time for channel changes, but also results in high battery usage.

• Developed by Qualcomm, the company behind mobile communication standard CDMA. Qualcomm is investing $100s millions building a nationwide mobile video network in the US.

• Offers twice the channel count, or half the infrastructure cost,of DVB-H – more efficient time-slicing than DVB-H. Faster channel changing than DVB-H at around 2 seconds.

• The only broadcast TV technology to have been commercially deployed by the end of 2005 (in South Korea).

• Leveraged from the digital radio technology, Digital Audio Broadcast (DAB). Can be divided into two headline technologies: satellite (S-DMB) and terrestrial (T-DMB).

• High power consumption due to lack of time-slicing capability.

• DVB-H, where “H” stands for handheld, is the newest technology from the Digital Video Broadcasting forum. Aimed at the mobile phone and portable device market, it is an extension of DVB-T, the digital terrestrial television standard.

• Time-slicing capability is a key feature; data is delivered to the phone in time-delayed bursts, enabling the tuner to switch off between bursts and hence reduce power consumption.

• However, time-splicing also has an adverse effect on channel switching response times, expected to be at least 3-5 seconds.

Overview

• Limited to Japan, where it is expected to dominate completely.

ISDB-T

• Likely to vie with DVB-H for US supremacy, while European success will be more difficult due to Nokia’s support for DVB-H.

• Requires less spectrum than DVB-H, which could prove essential.

MediaFLO

• Potential to be a leading global player, but trails DVB-H and MediaFLO in Europe and the US. Ability to offer mobile TV over DAB networks may provide a short-term advantage

• Limited channel support will restrict depth of services.

DMB

• Open standards approach and support from Nokia will ensure success in Europe.

• Chances of success in the US boosted by creation of Mobile TV Alliance.

• Ability to support a large number of channels.

DVB-H

Outlook

• Developed in Japan. The open standard was created for digital radio, video and multimedia services, and the Japanese DTT network began broadcasting in 2003 using the standard.

• Currently operates via continuous transmissions, which reduces the time for channel changes, but also results in high battery usage.

• Developed by Qualcomm, the company behind mobile communication standard CDMA. Qualcomm is investing $100s millions building a nationwide mobile video network in the US.

• Offers twice the channel count, or half the infrastructure cost,of DVB-H – more efficient time-slicing than DVB-H. Faster channel changing than DVB-H at around 2 seconds.

• The only broadcast TV technology to have been commercially deployed by the end of 2005 (in South Korea).

• Leveraged from the digital radio technology, Digital Audio Broadcast (DAB). Can be divided into two headline technologies: satellite (S-DMB) and terrestrial (T-DMB).

• High power consumption due to lack of time-slicing capability.

• DVB-H, where “H” stands for handheld, is the newest technology from the Digital Video Broadcasting forum. Aimed at the mobile phone and portable device market, it is an extension of DVB-T, the digital terrestrial television standard.

• Time-slicing capability is a key feature; data is delivered to the phone in time-delayed bursts, enabling the tuner to switch off between bursts and hence reduce power consumption.

• However, time-splicing also has an adverse effect on channel switching response times, expected to be at least 3-5 seconds.

Overview

• Limited to Japan, where it is expected to dominate completely.

ISDB-T

• Likely to vie with DVB-H for US supremacy, while European success will be more difficult due to Nokia’s support for DVB-H.

• Requires less spectrum than DVB-H, which could prove essential.

MediaFLO

• Potential to be a leading global player, but trails DVB-H and MediaFLO in Europe and the US. Ability to offer mobile TV over DAB networks may provide a short-term advantage

• Limited channel support will restrict depth of services.

DMB

• Open standards approach and support from Nokia will ensure success in Europe.

• Chances of success in the US boosted by creation of Mobile TV Alliance.

• Ability to support a large number of channels.

DVB-H

Outlook


A crucial determinant with regard to which technology will win out will be spectrum availability – both DVB-H and

MediaFLO need additional spectrum capacity in order to deploy broadcast TV networks. Although the necessary

spectrum has been allocated in the US, the European market is more problematic, with many governments

suggesting that widespread availability for mobile TV services will not be possible prior to the switch-off of analog

terrestrial TV services. With DMB already able to operate in most markets over the DAB digital radio networks, the

technology could have a significant head start in many markets, although the current limitations of the technology

with regard to limited channel capacity and high power consumption are likely to degrade its long-term potential.

That said, should DVB-H and MediaFLO continue to be plagued by spectrum issues, DMB could conceivably

forge a strong first-mover advantage across Europe.




DVB-H expected to be the long term victor

As illustrated in the following figure, Datamonitor expects DVB-H to become the most widely deployed mobile TV

broadcast technology in the medium term, with over 90 million handsets shipping with the technology installed in

2009. At this point, DVB-H will account for around 54% of mobile TV device shipments, with MediaFLO gaining

most traction in the US but failing to gain widespread support in Europe. DMB will continue to dominate across

much of Asia, and will have a role to play in the development of the European market, while ISDB-T will remain

confined to Japan.

Figure 8: Global mobile TV handsets by broadcast technology standard, 2006-2009

0

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Mobile TV trials ongoing across Europe

Mobile TV trials are now widespread across the Europe, with a series of commercial launches planned over the

remainder of 2006 and into 2007.

Italy set to be the DVB-H trailblazer

3 Italia launched a 20-channel DVB-H service in June to coincide with the start of the 2006 World Cup; the

operator has acquired rights to all 64 World Cup games from FIFA as part of the €50m ($60m) annual budget it

has set aside for content. 3 possesses the broadcast frequencies needed to launch the service following its recent

acquisition of commercial broadcaster Canale 7; the service was available to 70% of the Italian population upon

launch, who will be able to choose from two different handsets manufactured by LG and Samsung. 3 Italia hopes




to attract 500,000 subscribers by the end of the year which seems to be a high target considering the nascent

nature of the market.

3 Italia’s service will directly compete with Telecom Italia’s DVB-H offering. Telecom Italia launched its DVB-H

service in June using Samsung handsets which support both the mobile broadcast technology and 3G services for

multimedia functionality. Non-exclusive agreements with both Telecom Italia Media and Mediaset will offer access

to programming content from broadcasters such as Canale 5 and MTV Italia, including live Champions League

football coverage. Telecom Italia believes that up to half of its 30 million mobile subscribers could be equipped

with TV-capable handsets by 2008. Mediaset is also partnering with Vodafone Italia for the launch of DVB-H

services. Vodafone will use Mediaset’s multiplex capacity, and will also make its technology and broadcast

infrastructure available to increase coverage and enable rollout later in 2006. Datamonitor expects Italy to be one

of the most successful markets for mobile TV services over the next 2-3 years, driven by high levels of mobile

penetration and the availability of necessary spectrum following Mediaset’s agreement with Europa TV.

Further European mobile TV launches expected soon

While the Italian market is currently leading the way with regard to mobile TV developments across Europe, trials

are ongoing across almost all European markets in preparation for commercial deployment. Some of these trials

are outlined below.

• Virgin, NTL and Microsoft are teaming up to offer the UK’s first mobile broadcast service, which is

expected to launch in summer 2006 following extensive 5-month trials. The service will run over the

UK’s established DAB network using BT’s wholesale Movio service, and will provide at least five

channels.

• Plans for DVB-H and T-DMB in Germany – regulators have agreed to allocate nationwide licences for

both technology formats, with services expected to be launched this summer. While DVB-H services

will provide around 20 channels, T-DMB will offer far fewer – potentially only 4. This highlights the

capacity constraints of DMB technology, which Datamonitor believes may hinder its long-term potential.

• MediaFLO set for European debut – BSkyB is set to trial Qualcomm’s broadcast mobile TV

technology in Cambridge this summer, marking the European debut of MediaFLO. Qualcomm argues

that its technology provides considerable benefits over competing technologies such as DVB-H and

DAB in terms of deployment cost and channel capacity. The closed technical trial will initially involve

around 100 users, which may eventually be extended to involve members of the public. Separate trials

with UK broadcasters and mobile operators are also believed to be in the pipeline, although such

companies will not be involved in the initial test phase.

• Digita, which obtained a DVB-H license from the Finnish government earlier in 2006, has signed the

world’s first commercial DVB-H mobile TV platform supply contract with Nokia. As part of the deal,

Nokia will provide its Broadcast Solution 3.0, which supports the broadcasting of different digital content

types over DVB-H networks. The first stages of Finnish DVB-H network development are already

underway, with 29% nationwide coverage expected by the end of the year.




• Dutch trials – European satellite operator, SES Astra, has teamed up with KPN and network provider

Nozema to trial DVB-H services to a select number of KPN’s mobile subscribers. As part of the trial,

which was announced back in September 2005, Astra will provide a feed of content showing recent

movie trailers, with an interactive quiz integrated to evaluate the opportunities for mobile interactive

services.

• French DVB-H trial confirm consumer interest – a DVB-H trial in France involving Canal+, Nokia

and mobile operator SFR has revealed that almost two-thirds of trialists would consider subscribing to

the service, boosting expectations that the country will prove a fertile ground for mobile TV services.

Meanwhile, Samsung has announced that it will work with Bouygues Telecom, TF1 and digital network

provider VDL to trial T-DMB services.

• DVB-H trial in Spain – network operator Abertis Telecom, mobile firm Amena and Nokia have recently

joined forces to launch Spain’s third DVB-H trial – the announcement follows previous pilots led by

Telefónica and Vodafone. The trial is set to run until summer 2007, with the service likely to be

marketed from the end of 2006 – previous – early indications suggest that around 55% of trialists would

be willing to subscribe to the service. Datamonitor expects Spain to be a strong market for mobile TV

services, emphasized by the strong support that is being given by leading market participants.

The sheer numbers of trials being undertaken across Europe suggest that mobile TV services will begin to deploy

in earnest during 2007, although widespread deployment of DVB-H based services will be heavily dependent on

the availability of necessary spectrum.

Leading industry players get behind DVB-H in the US

In the US, spectrum for mobile TV services has been allocated and sold to Qualcomm (MediaFLO-based services

at 700 MHz) and Modeo (DVB-H services at 1670-1675 MHz); both firms are currently deploying national

broadcast networks across around 30 markets. Both network operators will provide their services on a wholesale

basis, with Qualcomm planning to launch its network in October 2006 – Verizon Wireless, the largest US CDMA

carrier, will be the first mobile operator to use the MediaFLO network for delivery of mobile TV services. Modeo,

which has conducted trials of its network in Pittsburgh, is expected to launch services in the summer of 2006 in

selected markets. Cingular Wireless, the largest GSM carrier, is widely expected to be one of the main operators

to deploy services over the DVB-H network. Datamonitor expects the two rival technologies to coexist in the US

market while the mobile TV sector remains in an embryonic state, although increasing industry support behind

DVB-H may boost its potential.

Support for DVB-H grows

Although MediaFLO appears to have forged an early leadership position in the US, supporters of DVB-H have

grouped together to extol the virtues of the standard. Created in early 2006, the Mobile TV Alliance (founded by

Intel, Nokia, Modeo and Texas Instruments) will promote DVB-H in North America. Sony Ericsson has recently

joined the alliance, adding further to the momentum behind DVB-H in the US. Datamonitor believes that

increasingly broad support for DVB-H will help to build economies of scale with regard to handsets, boosting the




potential of the technology – DVB-H is increasingly gaining the backing it will need to become a de facto global

standard for mobile TV.

Datamonitor retains a conservative outlook for mobile TV in the short term

Despite strong support across the mobile and broadcast sectors, Datamonitor believes that the planned launches

of commercial mobile TV services could still face some significant obstacles over the course of the next few years

– as previously discussed, spectrum availability will be crucial. However, despite early concerns that consumers

would be unwilling to pay for watching a relatively limited range of channels on a small screen, the result of recent

trials suggest that demand really does exist.

Figure 9: Mobile TV subscribers in Europe and North America, 2006-2009

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As illustrated in the figure below, Datamonitor expects there to be around 45 million subscribers to mobile

broadcast TV services across Europe and North America by the end of 2009. By this stage, spectrum issues are

likely to have been resolved in many markets, although the potential of larger European markets such as the UK

may well be dependent on the switch off of analog terrestrial TV signals. Although this forecast may appear

somewhat conservative, the market is expected to show strong growth post-2009, once all major inhibitors have

been removed. In the meantime, mobile TV offers significant opportunities for broadcasters and equipments

manufacturers, with 25 million ‘new’ targets for TV services across Europe and 20 million additions in North

America. Although mass market uptake is not anticipated within the forecast period, Datamonitor urges

companies across the mobile TV value chain to start to develop their strategies for targeting this emerging market

in order to build a platform for considerable expansion by the end of the decade.




DIGITAL TV DEVELOPMENT: MAJOR EUROPEAN MARKETS & THE US (DATABOOK)

Introduction

This databook provides datasets relating to uptake of digital TV services across the following markets:

• France;

• Italy;

• Germany;

• Spain;

• the UK;

• the US.

It provides a breakdown of digital households by both platform (satellite, cable, DTT and IPTV) and operator.

The following table contains detailed definitions relating to the digital TV sector.

Table 1: Digital TV definitions

DTT Digital Terrestrial Television (DTT) is an implementation of digital technology to provide broadcast content through a conventional antenna (or aerial) instead of via satellite dish or cable connection. The technology used is ATSC in North America and DVB-T in Europe.

IPTV IPTV (Internet Protocol Television) is an emerging threat to existing cable and satellite pay-TV operators – service providers are increasing providing digital television services using Internet Protocol over broadband networks to offer their customers triple play services.

Datamonitor D A T A M O N I T O R




Market development comparison: Europe & US

Digital TV uptake comparison: Europe vs. the US

Figure 10: Digital TV uptake comparison: Europe vs. the US, 2005-2010

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Table 2: Digital TV uptake comparison: Europe vs. the US, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

Europe 52,201 64,909 77,707 89,390 100,015 109,425

US 53,941 59,480 64,529 69,183 73,995 77,739

% digital - Europe 34% 41.7% 49.7% 57.0% 63.5% 69.2%

% digital - US 48% 52.0% 55.9% 59.4% 62.9% 65.7%





Digital TV market development comparison, 2005-2010

Figure 11: Digital TV market development comparison, 2005-2010

Italy

Germany

Portugal

Denmark

Finland France

Spain

Netherlands Austria

Switzerland

Sweden Norway

Belgium US

UK

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Table 3: Digital TV market development comparison, 2005-2010

CAGR (2005-2010) % Digital 2010 # of digital households 2010

Austria 29% 78% 2,531

Belgium 50% 64% 2,689

Denmark 26% 71% 1,759

Finland 16% 77% 1,748

France 20% 74% 18,141

Germany 13% 49% 18,897

Italy 17% 70% 15,735

Netherlands 38% 81% 5,683

Norway 22% 89% 1,841

Portugal 19% 49% 2,136

Spain 18% 63% 8,788

Sweden 19% 86% 3,879

Switzerland 50% 43% 1,552

UK 7% 95% 24,045

US 8% 66% 77,739





Digital TV households in Europe by platform, 2005-2010

Figure 12: Digital TV households in Europe by platform, 2005-2010

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Table 4: Digital TV households in Europe by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 155,015 155,643 156,274 156,907 157,542 158,166

Digital cable 12,544 16,012 20,146 23,882 27,507 30,655

Digital satellite 23,788 25,670 27,330 28,849 30,240 31,487

Digital terrestrial 14,863 20,947 26,436 30,998 34,642 37,830

IPTV 1,007 2,281 3,795 5,661 7,625 9,454

Total digital 52,201 64,909 77,707 89,390 100,015 109,425

% digital 34% 42% 50% 57% 63% 69%





Digital TV growth in France

Digital TV households in France by platform, 2005-2010

Figure 13: Digital TV households in France by platform, 2005-2010

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Table 5: Digital TV households in France by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 24,130 24,220 24,300 24,390 24,480 24,560

Digital cable 1,120 1,360 1,610 1,890 2,180 2,430



IPTV 390 870 1,310 1,760 2,200 2,630

Total digital 7,180 9,780 12,180 14,390 16,390 18,140

% digital 30% 40% 50% 59% 67% 74%





Digital TV households in France by operator, 2005-2010

Table 6: Digital TV households in France by operator, 2005-2010 (000s)

Operator Platform 2005 2006 2007 2008 2009 2010

CanalSatellite Satellite 3,200 3,450 3,640 3,760 3,880 3,950

TPS Satellite 1,220 1,120 1,050 1,010 980 970

Numericable Cable 500 600 690 800 910 1,000

UPC Cable 560 680 810 950 1,100 1,230

Rest of cable Cable 60 80 110 140 170 200

TNT DTT 1,250 2,980 4,570 5,970 7,140 8,160

IPTV IPTV 390 870 1,310 1,760 2,200 2,630

Total digital households 7,180 9,780 12,180 14,390 16,390 18,140





Digital TV growth in Germany

Digital TV households in Germany by platform, 2005-2010

Figure 14: Digital TV households in Germany by platform, 2005-2010

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Table 7: Digital TV households in Germany by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 37,786 37,895 38,003 38,111 38,220 38,328

Digital cable 2,431 2,816 3,272 3,767 4,277 4,834



IPTV 0 60 145 300 514 757

Total digital 10,139 12,327 14,511 16,108 17,598 18,897

% digital 27% 33% 38% 42% 46% 49%





Digital TV households in Germany by operator, 2005-2010

Table 8: Digital TV households in Germany by operator, 2005-10 (000s)


Premiere Satellite 1,558 1,706 1,816 1,906 1,992 2,077

Free-to-air satellite Satellite 4,300 5,584 6,979 7,777 8,420 8,814

KBW Cable 78 133 197 266 338 416

KDG Cable 401 509 637 781 917 1,073

Unity Media Cable 119 235 385 548 699 851

Premiere Cable 1,758 1,807 1,845 1,875 1,904 1,931


Terrestrial DTT 1,850 2,160 2,300 2,359 2,396 2,415

Total IPTV IPTV - 60 145 300 514 757






Digital TV growth in Italy

Digital TV households in Italy by platform, 2005-2010

Figure 15: Digital TV households in Italy by platform, 2005-2010

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Table 9: Digital TV households in Italy by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010 TV households 21,809 21,918 22,027 22,137 22,248 22,358

Digital cable 0 0 0 0 0 0



IPTV 240 347 511 747 1,064 1,447

Total digital 7,030 9,067 10,901 12,637 14,207 15,735 % digital 32% 41% 49% 57% 64% 70%





Digital TV households in Italy by operator, 2005-2010

Table 10: Digital TV households in Italy by operator, 2005-2010 (000s)


Sky Italia Satellite 3,590 4,020 4,262 4,428 4,534 4,590

Terrestrial DTT 3,200 4,700 6,128 7,463 8,609 9,697

Total IPTV IPTV 240 347 511 747 1,064 1,447






Digital TV growth in Spain

Digital TV households in Spain by platform, 2005-2010

Figure 16: Digital TV households in Spain by platform, 2005-2010

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VDigital cable Digital satellite Digital terrestrial IPTV % digita


Table 11: Digital TV households in Spain by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 13,232 13,364 13,498 13,633 13,769 13,907

Digital cable 732 935 1,143 1,320 1,465 1,497


Digital terrestrial 950 1,663 2,419 2,924 3,182 3,315

IPTV 207 425 711 990 1,188 1,316

Total digital 3,849 5,178 6,581 7,675 8,388 8,788

% digital 29% 39% 49% 56% 61% 63%





Digital TV households in Spain by operator, 2005-2010

Table 12: Digital TV households in Spain by operator, 2005-2010 (000s)


DIGITAL+ Satellite 1,960 2,156 2,308 2,440 2,553 2,660

ONO Cable 700 889 1,085 1,247 1,384 1,412


Terrestrial DTT 720 1,230 1,783 2,261 2,602 2,862

Total IPTV IPTV 207 425 711 990 1,188 1,316






Digital TV growth in the UK

Digital TV households in the UK by platform, 2005-2010

Figure 17: Digital TV households in the UK by platform, 2005-2010

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Table 13: Digital TV households in the UK by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 25,012 25,053 25,093 25,133 25,173 25,201

Digital cable 2,680 3,031 3,343 3,595 3,694 3,735



IPTV 37 110 248 504 766 872

Total digital 17,026 19,049 20,782 22,290 23,373 24,045

% digital 68% 76% 83% 89% 93% 95%





Digital TV households in the UK by operator, 2005-2010

Table 14: Digital TV households in the UK by operator, 2005-2010 (000s)


BSkyB Satellite 8,059 8,365 8,668 8,961 9,230 9,465

NTL Telewest Cable 2,680 3,031 3,343 3,595 3,694 3,735

Freeview DTT 6,250 7,542 8,523 9,230 9,682 9,973

Total IPTV IPTV 37 110 248 504 766 872






Digital TV growth in the US

Digital TV households in the US by platform, 2005-2010

Figure 18: Digital TV households in the US by platform, 2005-2010

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Table 15: Digital TV households in the US by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 113,200 114,300 115,400 116,500 117,600 118,400

Digital cable 25,956 28,705 31,004 32,986 34,806 36,560


Digital terrestrial 679 1,003 1,416 1,854 2,240 2,527

IPTV 165 743 1,685 2,899 4,725 5,828

Total digital 53,941 59,480 64,529 69,183 73,995 77,739

% digital 48% 52% 56% 59% 63% 66%





Digital TV households in the US by operator, 2005-2010

Table 16: Digital TV households in the US by operator, 2005-2010 (000s)


DirecTV Satellite 15,100 16,168 16,911 17,432 17,803 18,072

EchoStar Satellite 12,040 12,862 13,512 14,012 14,421 14,753

Cablevision Cable 1,950 2,346 2,641 2,813 2,914 2,976

Charter Cable 2,797 2,900 3,002 3,101 3,198 3,296

Comcast Cable 9,720 10,716 11,544 12,292 12,998 13,680

Cox Cable 2,663 2,911 3,117 3,301 3,473 3,638

Time Warner Cable 5,400 6,145 6,792 7,383 7,960 8,558

Other Cable 3,426 3,686 3,908 4,096 4,262 4,413

Terrestrial DTT 679 1,003 1,416 1,854 2,240 2,527

Total IPTV IPTV 165 743 1,685 2,899 4,725 5,828






DIGITAL TV DEVELOPMENT: SMALL EUROPEAN TV MARKETS (DATABOOK)

Introduction

This databook provides datasets relating to uptake of digital TV services across the following markets:

• Austria;

• Belgium;

• Denmark;

• Finland;

• the Netherlands;

• Norway;

• Portugal;

• Sweden;

• Switzerland.

It provides a breakdown of digital households by both platform (satellite, cable, DTT and IPTV) and operator.




Digital TV growth in Austria

Digital TV households in Austria by platform, 2005-2010

Figure 19: Digital TV households in Austria by platform, 2005-2010

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Table 17: Digital TV households in Austria by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 3,205 3,212 3,220 3,228 3,235 3,243

Digital cable 200 276 448 675 777 840

Digital satellite 500 591 692 782 854 898

Digital terrestrial 0 5 75 165 292 425

IPTV 7 35 80 159 255 369

Total digital 707 907 1,296 1,781 2,179 2,531

% digital 22% 28% 40% 55% 67% 78%





Digital TV households in Austria by operator, 2005-2010

Table 18: Digital TV households in Austria by operator, 2005-2010 (000s)


Premiere Satellite 250 271 297 316 339 354

Free-to-air satellite Satellite 250 320 396 466 515 544

UPC Cable 44 90 224 399 451 468

Liwest Cable 7 14 24 37 55 69

Premiere Cable 131 142 149 159 164 167


Terrestrial DTT - 5 75 165 292 425

Total IPTV IPTV 7 35 80 159 255 369

Total digital households 707 907 1,296 1,781 2,179 2,531





Digital TV growth in Belgium

Digital TV households in Belgium by platform, 2005-2010

Figure 20: Digital TV households in Belgium by platform, 2005-2010

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Table 19: Digital TV households in Belgium by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 4,171 4,180 4,189 4,198 4,207 4,216

Digital cable 272 577 882 1,245 1,684 2,146



IPTV 33 102 169 240 313 382

Total digital 351 745 1,143 1,603 2,139 2,689

% digital 8% 18% 27% 38% 51% 64%





Digital TV households in Belgium by operator, 2005-2010

Table 20: Digital TV households in Belgium by operator, 2005-10 (000s)


Satellite Satellite 38 54 75 94 108 116

Telenet Cable 75 298 467 678 956 1,281

Brutele Cable 15 37 75 124 158 178

UPC Cable 6 10 22 45 89 124


Terrestrial DTT 8 12 17 24 34 45

IPTV IPTV 33 102 169 240 313 382






Digital TV growth in Denmark

Digital TV households in Denmark by platform, 2005-2010

Figure 21: Digital TV households in Denmark by platform, 2005-2010

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Table 21: Digital TV households in Denmark by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 2,447 2,454 2,461 2,468 2,475 2,482

Digital cable 158 243 359 508 689 886



IPTV 10 38 70 103 134 165

Total digital 561 725 922 1,166 1,454 1,759

% digital 23% 30% 37% 47% 59% 71%





Digital TV households in Denmark by operator, 2005-2010

Table 22: Digital TV households in Denmark by operator, 2005-10 (000s)


Canal Digital Satellite 151 164 175 186 195 203

Viasat Satellite 240 249 256 262 267 272

TDC Kabel Cable 45 72 108 151 196 235

Telia Stofa Cable 93 135 182 229 276 324


Terrestrial DTT 2 32 62 107 169 233

IPTV IPTV 10 38 70 103 134 165

Total digital households 561 725 922 1,166 1,454 1,759





Digital TV growth in Finland

Digital TV households in Finland by platform, 2005-2010

Figure 22: Digital TV households in Finland by platform, 2005-2010

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Table 23: Digital TV households in Finland by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 2,202 2,214 2,227 2,240 2,253 2,266

Digital cable 55 104 177 260 341 401


Digital terrestrial 623 791 915 988 1,032 1,061

IPTV 5 19 39 67 99 126

Total digital 827 1,064 1,286 1,474 1,632 1,748

% digital 38% 48% 58% 66% 72% 77%





Digital TV households in Finland by operator, 2005-2010

Table 24: Digital TV households in Finland by operator, 2005-2010 (000s)




HTV Cable 44 56 70 83 96 104

TeliaSonera Cable 6 27 59 98 137 166


Digita DTT 623 791 915 988 1,032 1,061

IPTV IPTV 5 19 39 67 99 126

Total digital households 827 1,064 1,286 1,474 1,632 1,748





Digital TV growth in the Netherlands

Digital TV households in the Netherlands by platform, 2005-2010

Figure 23: Digital TV households in the Netherlands by platform, 2005-10

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Table 25: Digital TV households in the Netherlands by platform, 2005-10

(000 households) 2005 2006 2007 2008 2009 2010

TV households 6,831 6,868 6,905 6,942 6,979 7,016

Digital cable 310 598 1,235 1,905 2,681 3,429



IPTV 45 137 236 352 489 606

Total digital 1,149 1,769 2,757 3,704 4,738 5,683

% digital 17% 26% 40% 53% 68% 81%





Digital TV households in the Netherlands by operator, 2005-2010

Table 26: Digital TV households in the Netherlands by operator, 2005-10 (000s)


Canal Digitaal Satellite 610 714 799 871 932 970

UPC Cable 85 218 437 727 1,062 1,415

Essent Kabelcom Cable 100 163 448 663 896 1,109

Casema Cable 90 150 233 331 453 567


Digitenne DTT 184 320 487 576 636 678

IPTV IPTV 45 137 236 352 489 606






Digital TV growth in Norway

Digital TV households in Norway by platform, 2005-2010

Figure 24: Digital TV households in Norway by platform, 2005-2010

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Table 27: Digital TV households in Norway by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 2,003 2,017 2,031 2,045 2,060 2,074

Digital cable 103 147 223 322 436 546



IPTV 17 47 83 118 145 163

Total digital 676 824 1,031 1,286 1,563 1,841

% digital 34% 41% 51% 63% 76% 89%





Digital TV households in Norway by operator, 2005-2010

Table 28: Digital TV households in Norway by operator, 2005-2010 (000s)




Canal Digital Kabel Cable 41 53 81 120 172 224

UPC Cable 31 45 64 92 124 149


DTT DTT - 26 76 159 262 384

IPTV IPTV 17 47 83 118 145 163






Digital TV growth in Portugal

Digital TV households in Portugal by platform, 2005-2010

Figure 25: Digital TV households in Portugal by platform, 2005-2010

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Table 29: Digital TV households in Portugal by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 4,308 4,316 4,325 4,333 4,342 4,351

Digital cable 510 694 830 934 1,031 1,127



IPTV 0 10 32 68 122 206

Total digital 899 1,139 1,355 1,579 1,818 2,136

% digital 21% 26% 31% 36% 42% 49%





Digital TV households in Portugal by operator, 2005-2010

Table 30: Digital TV households in Portugal by operator, 2005-2010 (000s)


TV Cabo Satellite 389 420 444 463 476 488

TV Cabo Cable 508 692 824 923 1,015 1,104


DTT DTT - 15 49 114 189 314

IPTV IPTV - 10 32 68 122 206

Total digital households 899 1,139 1,355 1,579 1,818 2,136





Digital TV growth in Sweden

Digital TV households in Sweden by platform, 2005-2010

Figure 26: Digital TV households in Sweden by platform, 2005-2010

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Table 31: Digital TV households in Sweden by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 4,346 4,381 4,416 4,452 4,487 4,523

Digital cable 406 549 796 1,118 1,510 1,892



IPTV 19 52 98 145 178 205

Total digital 1,608 2,000 2,437 2,913 3,416 3,879

% digital 37% 46% 55% 65% 76% 86%





Digital TV households in Sweden by operator, 2005-2010

Table 32: Digital TV households in Norway by operator, 2005-2010 (000s)




Com Hem Cable 218 249 316 416 532 643

UPC Cable 59 84 138 190 229 257

Canal Digital Cable 19 28 39 54 74 99


Boxer DTT 531 674 755 808 840 866

IPTV IPTV 19 52 98 145 178 205






Digital TV growth in Switzerland

Digital TV households in Switzerland by platform, 2005-2010

Figure 27: Digital TV households in Switzerland by platform, 2005-2010

0

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Dig

ital T

V ho

useh

olds

(000

s)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f hou

seho

lds

with

dig

ital T



Table 33: Digital TV households in Switzerland by platform, 2005-2010

(000 households) 2005 2006 2007 2008 2009 2010

TV households 3,531 3,552 3,574 3,595 3,617 3,638

Digital cable 138 206 301 432 609 837



IPTV 1 30 59 103 155 209

Total digital 202 337 520 780 1,124 1,552

% digital 6% 9% 15% 22% 31% 43%





Digital TV households in Switzerland by operator, 2005-2010

Table 34: Digital TV households in Switzerland by operator, 2005-2010 (000s)


Satellite Satellite 48 69 98 136 184 240

Cablecom Cable 106 159 230 323 447 606


Terrestrial DTT 15 32 62 108 176 266

IPTV IPTV 1 30 59 103 155 209

Total digital households 202 337 520 780 1,124 1,552


TECHNOLOGY DEVELOPMENTS IN THE DIGITAL TV SECTOR (DATABOOK)

Introduction

This databook provides forecast market data relating to the penetration of PVR, high definition and mobile TV

technologies across the following geographies:

• Austria;

• Belgium;

• Denmark;

• Finland;

• France;

• Germany;

• Italy;

• the Netherlands;

• Norway;

• Portugal;

• Spain;

• Sweden;

• Switzerland;

• the UK;

• the US.




Table 35: Digital TV definitions

DMB Digital Multimedia Broadcasting (DMB), the first broadcast TV technology to be commercially deployed on mobile networks (in South Korea), can be divided into two headline technologies: satellite (S-DMB) and terrestrial (T-DMB). The DMB technology was essentially leveraged from the digital radio technology, Digital Audio Broadcast (DAB).

DVB-H The Digital Video Broadcasting (DVB) forum is responsible for the creation of multiple open standard broadcasting technologies which have formed the basis for most digital cable, satellite, terrestrial and IPTV deployments around the globe. DVB-H, where “H” stands for handheld, is the newest technology aimed at the mobile phone and portable device market, and is an extension of DVB-T, the digital terrestrial television standard.

HD High Definition (HD) TV means broadcast of television signals with a higher resolution than traditional formats (NTSC, SECAM, PAL) allow. HDTV is defined as 1080 active lines, 16:9 aspect ratio. However, in the ATSC broadcast standard used in the United States and other countries, any ATSC resolution with 720 or more active lines is considered HDTV.

ISDB-T ISDB-T (Integrated Services Digital Broadcasting – Terrestrial) was developed by the Association of Radio Industries and Business (ARIB) in Japan. The open standard was created for digital radio, video and multimedia services, and the Japanese digital terrestrial TV network began broadcasting in 2003 using the ISDB-T standard.

MediaFLO MediaFLO was developed by Qualcomm, the company behind CDMA, the Code Division Multiple Access mobile communication standard. It was researched and designed from scratch to provide a TV delivery system for mobile devices. MediaFLO provides an entire end-to-end solution (including efficient audio/video compression systems, H.264 and AAC+) for mobile operators to offer broadcast TV, with its Media Distribution System (MDS) handling content distribution, licensing and subscriptions (interfacing with the operator’s billing system).

PVR A personal video recorder (PVR) (or digital video recorder (DVR)) is a device that records video content to a hard drive-based digital storage medium.

Datamonitor D A T A M O N I T O R




High definition uptake comparison: Europe vs. the US, 2006-2010

Figure 28: High definition TV households in Europe and the US, 2006-2010

0

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010

Num

ber o

f hou

seho

lds

with

HD

(000

s)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

% o

f TV

hous

ehol

ds w

ith H

D

Europe US % with HD - Europe % with HD - US


Table 36: High definition TV households in Europe and the US, 2006-2010

(000 households) 2006 2007 2008 2009 2010

Europe 608 1,465 3,341 6,818 12,359

US 14,481 19,348 27,314 38,250 52,686

% with HD – Europe 0.4% 0.9% 2.1% 4.3% 7.8%

% with HD – US 12.7% 16.8% 23.4% 32.5% 44.5%





High definition TV households in Austria, 2006-2010

Figure 29: High definition TV households in Austria, 2006-2010

-

50

100

150

200

250

300

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

% o

f TV

hous

ehol

ds w

ith H

D

HD households % of TV households with HD


Table 37: High definition TV households in Austria, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 14 33 77 152 275

% of TV households with HD 0.4% 1.0% 2.4% 4.7% 8.5%





High definition TV households in Belgium, 2006-2010

Figure 30: High definition TV households in Belgium, 2006-2010

-

50

100

150

200

250

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

% o

f TV

hous

ehol

ds w

ith H

D



Table 38: High definition TV households in Belgium, 2006-2010

(000s) 2006 2007 2008 2009 2010







High definition TV households in Denmark, 2006-2010

Figure 31: High definition TV households in Denmark, 2006-2010

-

50

100

150

200

250

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

% o

f TV

hous

ehol

ds w

ith H

D



Table 39: High definition TV households in Denmark, 2006-2010

(000s) 2006 2007 2008 2009 2010







High definition TV households in Finland, 2006-2010

Figure 32: High definition TV households in Finland, 2006-2010

-

50

100

150

200

250

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

% o

f TV

hous

ehol

ds w

ith H

D



Table 40: High definition TV households in Finland, 2006-2010

(000s) 2006 2007 2008 2009 2010







High definition TV households in France, 2006-2010

Figure 33: High definition TV households in France, 2006-2010

-

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010

HD h

ouse

hold

s (0

00s)

0%1%2%3%4%5%6%7%8%9%10%

% o

f TV

hou

seho

lds

with

HD



Table 41: High definition TV households in France, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 126 293 627 1,236 2,276






High definition TV households in Germany, 2006-2010

Figure 34: High definition TV households in Germany, 2006-2010

-

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

% o

f TV

hous

ehol

ds w

ith H

D



Table 42: High definition TV households in Germany, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 134 267 685 1,351 2,386






High definition TV households in Italy, 2006-2010

Figure 35: High definition TV households in Italy, 2006-2010

-

200

400

600

800

1,000

1,200

1,400

1,600

2006 2007 2008 2009 2010

HD h

ouse

hold

s (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

% o

f TV

hous

ehol

ds w

ith H

D



Table 43: High definition TV households in Italy, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 49 134 346 689 1,341






High definition TV households in the Netherlands, 2006-2010

Figure 36: High definition TV households in the Netherlands, 2006-2010

-

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

2%

4%

6%

8%

10%

12%

% o

f TV

hous

ehol

ds w

ith H

D



Table 44: High definition TV households in the Netherlands, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 14 52 135 321 674






High definition TV households in Norway, 2006-2010

Figure 37: High definition TV households in Norway, 2006-2010

-

20

40

60

80

100

120

140

160

180

200

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

% o

f TV

hous

ehol

ds w

ith H

D



Table 45: High definition TV households in Norway, 2006-2010

(000s) 2006 2007 2008 2009 2010







High definition TV households in Portugal, 2006-2010

Figure 38: High definition TV households in Portugal, 2006-2010

-

20

40

60

80

100

120

140

160

180

200

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

% o

f TV

hous

ehol

ds w

ith H

D



Table 46: High definition TV households in Portugal, 2006-2010

(000s) 2006 2007 2008 2009 2010







High definition TV households in Spain, 2006-2010

Figure 39: High definition TV households in Spain, 2006-2010

-

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010

HD h

ouse

hold

s (0

00s)

0%

1%

2%

3%

4%

5%

6%

% o

f TV

hous

ehol

ds w

ith H

D



Table 47: High definition TV households in Spain, 2006-2010

(000s) 2006 2007 2008 2009 2010







High definition TV households in Sweden, 2006-2010

Figure 40: High definition TV households in Sweden, 2006-2010

-

50

100

150

200

250

300

350

400

450

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

% o

f TV

hous

ehol

ds w

ith H

D



Table 48: High definition TV households in Sweden, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 14 42 115 243 421






High definition TV households in Switzerland, 2006-2010

Figure 41: High definition TV households in Switzerland, 2006-2010

-

20

40

60

80

100

120

140

160

180

200

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

% o

f TV

hous

ehol

ds w

ith H

D



Table 49: High definition TV households in Switzerland, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households - 5 25 75 179






High definition TV households in the UK, 2006-2010

Figure 42: High definition TV households in the UK, 2006-2010

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2006 2007 2008 2009 2010

HD

hous

ehol

ds (0

00s)

0%

2%

4%

6%

8%

10%

12%

14%

% o

f TV

hous

ehol

ds w

ith H

D



Table 50: High definition TV households in the UK, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 200 467 873 1,790 3,061






High definition TV households in the US, 2006-2010

Figure 43: High definition TV households in the US, 2006-2010

-

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010

HD h

ouse

hold

s (0

00s)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

% o

f TV

hous

ehol

ds w

ith H

D



Table 51: High definition TV households in the US, 2006-2010

(000s) 2006 2007 2008 2009 2010

HD households 14,481 19,348 27,314 38,250 52,686






PVR uptake comparison: Europe vs. the US, 2006-2010

Figure 44: PVR households in Europe and the US, 2006-2010

0

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

10%

20%

30%

40%

50%

60%

% o

f TV

hous

ehol

ds w

ith P

VR

Europe US % with PVR - Europe % with PVR - US


Table 52: PVR households in Europe and the US, 2006-2010

(000 households) 2006 2007 2008 2009 2010

Europe 2,901 4,657 7,919 13,250 20,334

US 20,126 30,290 40,528 49,728 59,673

% with PVR – Europe 1.9% 3.0% 5.0% 8.4% 12.9%

% with PVR – US 17.6% 26.2% 34.8% 42.3% 50.4%





PVR households in Austria, 2006-2010

Figure 45: PVR households in Austria, 2006-2010

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010

PVR

hous

ehol

ds (0

00s)

0%

2%

4%

6%

8%

10%

12%

% o

f TV

hous

ehol

ds w

ith P

VR

PVR households % of TV households with PVR


Table 53: PVR households in Austria, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 24 53 115 212 344

% of TV households with PVR 0.7% 1.6% 3.6% 6.6% 10.6%





PVR households in Belgium, 2006-2010

Figure 46: PVR households in Belgium, 2006-2010

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010

PV

R ho

useh

olds

(000

s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

% o

f TV

hous

ehol

ds w

ith P

VR



Table 54: PVR households in Belgium, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in Denmark, 2006-2010

Figure 47: PVR households in Denmark, 2006-2010

0

50

100

150

200

250

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

% o

f TV

hou

seho

lds

with

PVR



Table 55: PVR households in Denmark, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in Finland, 2006-2010

Figure 48: PVR households in Finland, 2006-2010

0

50

100

150

200

250

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

2%

4%

6%

8%

10%

12%

% o

f TV

hou

seho

lds

with

PVR



Table 56: PVR households in Finland, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in France, 2006-2010

Figure 49: PVR households in France, 2006-2010

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2006 2007 2008 2009 2010

PVR

hous

ehol

ds (0

00s)

0%

2%

4%

6%

8%

10%

12%

14%

16%

% o

f TV

hous

ehol

ds w

ith P

VR



Table 57: PVR households in France, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 320 660 1,330 2,520 3,543






PVR households in Germany, 2006-2010

Figure 50: PVR households in Germany, 2006-2010

0

500

1,000

1,500

2,000

2,500

3,000

2006 2007 2008 2009 2010

PVR

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

% o

f TV

hou

seho

lds

with

PVR



Table 58: PVR households in Germany, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 240 560 1,130 1,830 2,806






PVR households in Italy, 2006-2010

Figure 51: PVR households in Italy, 2006-2010

0

500

1,000

1,500

2,000

2,500

3,000

2006 2007 2008 2009 2010

PVR

hous

ehol

ds (0

00s)

0%

2%

4%

6%

8%

10%

12%

% o

f TV

hou

seho

lds

with

PVR



Table 59: PVR households in Italy, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 107 270 600 1,320 2,467






PVR households in the Netherlands, 2006-2010

Figure 52: PVR households in the Netherlands, 2006-2010

0

100

200

300

400

500

600

700

800

900

2006 2007 2008 2009 2010

PVR

hous

ehol

ds (0

00s)

0%

2%

4%

6%

8%

10%

12%

14%

% o

f TV

hou

seho

lds

with

PVR



Table 60: PVR households in the Netherlands, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in Norway, 2006-2010

Figure 53: PVR households in Norway, 2006-2010

0

50

100

150

200

250

300

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

2%

4%

6%

8%

10%

12%

14%

% o

f TV

hou

seho

lds

with

PVR



Table 61: PVR households in Norway, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in Portugal, 2006-2010

Figure 54: PVR households in Portugal, 2006-2010

0

50

100

150

200

250

300

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

1%

2%

3%

4%

5%

6%

% o

f TV

hou

seho

lds

with

PVR



Table 62: PVR households in Portugal, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in Spain, 2006-2010

Figure 55: PVR households in Spain, 2006-2010

0

200

400

600

800

1,000

1,200

1,400

2006 2007 2008 2009 2010

PV

R ho

useh

olds

(000

s)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

% o

f TV

hous

ehol

ds w

ith P

VR



Table 63: PVR households in Spain, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 15 96 265 560 1,183






PVR households in Sweden, 2006-2010

Figure 56: PVR households in Sweden, 2006-2010

0

100

200

300

400

500

600

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

2%

4%

6%

8%

10%

12%

% o

f TV

hou

seho

lds

with

PVR



Table 64: PVR households in Sweden, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in Switzerland, 2006-2010

Figure 57: PVR households in Switzerland, 2006-2010

0

50

100

150

200

250

2006 2007 2008 2009 2010

PVR

hous

ehol

ds (0

00s)

0%

1%

2%

3%

4%

5%

6%

7%

% o

f TV

hou

seho

lds

with

PVR



Table 65: PVR households in Switzerland, 2006-2010

(000s) 2006 2007 2008 2009 2010







PVR households in the UK, 2006-2010

Figure 58: PVR households in the UK, 2006-2010

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

5%

10%

15%

20%

25%

30%

35%

% o

f TV

hou

seho

lds

with

PVR



Table 66: PVR households in the UK, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 2,040 2,680 3,740 5,320 7,230






PVR households in the US, 2006-2010

Figure 59: PVR households in the US, 2006-2010

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2006 2007 2008 2009 2010

PVR

hou

seho

lds

(000

s)

0%

10%

20%

30%

40%

50%

60%

% o

f TV

hou

seho

lds

with

PVR



Table 67: PVR households in the US, 2006-2010

(000s) 2006 2007 2008 2009 2010

PVR households 20,126 30,290 40,528 49,728 59,673






Mobile TV subscribers in Europe and the US, 2006-2009

Figure 60: Mobile TV subscribers in Europe and the US, 2006-2009

0

5

10

15

20

25

30

2006 2007 2008 2009

Mob

ile T

V su

bscr

iber

s (m

)

EuropeNorth America


Table 68: Mobile TV subscribers in Europe and the US, 2006-2009

(m) 2006 2007 2008 2009

Europe 0.6 4.7 11.2 25.0

North America 0.2 3.0 8.8 19.7





Mobile TV handset shipments by broadcast technology, 2006-2009

Figure 61: Global mobile TV handset shipments by broadcast technology, 2006-2009

0

10

20

30

40

50

60

70

80

90

100

2006 2007 2008 2009

Mob

ile T

V ha

ndse

t shi

pmen

ts (m

)

DMB / DAB-IPDVB-H ISDB-T MediaFLO


Table 69: Global mobile TV handsets by broadcast technology, 2006-2009

(m) 2006 2007 2008 2009

DMB / DAB-IP 2.6 10.1 16 28.4

DVB-H 1.5 9.5 34.8 90.1

ISDB-T 0.7 4.1 10.9 18.4

MediaFLO 0.5 3.5 10.9 30.0


Appendix



APPENDIX

Definitions

ADSL – Asymmetric Digital Subscriber Line

ARPU – Average Revenue Per User

CAGR – Compound Annual Growth Rate

CDMA – Code Division Multiple Access

CES – Consumer Electronics Show

CPE – Customer Premises Equipment

DAB – Digital Audio Broadcast

DMB - Digital Multimedia Broadcast

DSL – Digital Subscriber Line

DTT – Digital Terrestrial Television

DVB-H – Digital Video Broadcast – Handheld

DVB-T – Digital Video Broadcast – Terrestrial

DVR – Digital Video Recorder

FCC – Federal Communications Commission

FTA – Free-To-Air

GSM – Global System for Mobile Communication

HD – High Definition

IPTV – Internet Protocol Television

ISDB-T – Integrated Services Digital Broadcasting – Terrestrial

MPEG – Moving Pictures Experts Group

PVR – Personal Video Recorder

QAM – Quadrature Amplitude Modulation

STB – Set-Top Box

VDSL – Very High Bit-Rate Digital Subscriber Line

VOD – Video On Demand

WiMax – Worldwide Interoperability for Microwave Access

WM9 – Windows Media 9

Appendix



Further reading

The evolving broadcast sector (Review Report) (DMTC1195) – June 2006

Digital rights management (Review Report) (DMTC1191) – April 2006

Broadcast TV to mobile (DMTC1162) – December 2005

The broadcast value chain (DMTC1117) – March 2005

Digital rights management (DMTC1147) – June 2005

Ask the analyst

The Technology Knowledge Center Writing team

Adrian Drozd Senior Analyst, Media & Broadcasting Technology ([email protected])

Kathleen Klasnic Director, Vertical Market Technology ([email protected])

the evolving broadcast sector (review report)

Documents

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mobile tv

highdefinition tv

media sector

technology focus brief

technology focus section

strong digital growth

market focus section