HDTV: Market Update
Ben Keen, Chief Analyst, Screen Digest
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Only 1.2m fully HD-enabled homes in 2007…
All TV homes
165m
HD-display
HD-addressable
market
market 38m
30m
HD target market HD-enabled
market:1.2m (1%)
… growing to 32m in 2012
All TV homes
170m
HD-display
HD-addressable
market
market 105m
144m
HD target market HD-enabled
market: 32m
Three tier market: HD-enabled v. HD-display v.
SD-only
As the conversion to HD displays progresses, the ‘content gap’ will
actually grow in absolute size between now (30m) and 2012
(112m)
180
160
140
120
Households (m)
100
80
60
40
20
0
2005 2006 2007 2008 2009 2010 2011 2012
Fully HD enabled HD-display SD-only
While the US is further down the HD road, it is
not immune to the content gap issue
(10m HHs currently)
125
100
Households (000s)
75
50
25
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
HD-enabled HD-display but not enabled SD-only
UK is the only European market where HH number
receiving HDTV services is starting to be significant
45
40
35
30
os o s )
H u eh ld (m
25
20
15
10
5
0
France UK Germany Italy Benelux Nordic Spain Poland
HD-enabled HD-display ready but not enabled SD-only homes
By 2012 a number of markets like the UK will be close
to 100% HD-display – but still with large content gap
45
40
35
‘Content gap’: by 2012 a vast
30 majority of European homes
have ‘HD-ready’ displays but still
os o s )
H u eh ld (m
25 access to HD broadcasts
20
15
10
5
0
France UK Germany Italy Benelux Nordic Spain Poland
HD-enabled HD-display ready but not enabled SD-only homes
HDTV is still primarily a pay TV market – it will only
become mass market in the next decade when
available via all free-to-air platforms
25
Households (m)
20
15
10
5
0
2006 2007 2008 2009 2010 2011 2012
Free HD homes Pay HD homes
Meanwhile, HD will increasingly be key part of
the marketing battle between platforms
Digital
DTH pay DTH free DTT pay DTT free
Cable
France 2006 2008 2007 2008 2008
Germany 2006 2005 2006
Italy 2006 2010
Spain 2008 2009 2012
Nordic 2005 2008 2006 2009 2007
Benelux 2008 2006
UK 2006 2008 2007 2009-2010
BLACK=HD available BLUE= HD officially planned RED= SDL expectation
• HDTV now available in every W. European market
•…But so far a very limited free-to-air offer
• DTT in France and Freesat in the UK (2008-2009) should accelerate HD adoption
• France is the country with the largest choice of platforms offering HD
Already the case in US
• Number of HD channels key
differentiator in marketing
strategy of DirecTV
• A very simple HD upgrade
proposition: ‘add $9.99 to +$9.99
any package’
+$9.99
US cable operators attempting to respond to
satellite challenge
• HD channels: DirecTV: 95, Dish network: 80, IPTV: 40-70, cable:
30-50
• Cable operators suffering from severe bandwidth constraints
• Stop-gap measures from cable operators:
– Put the marketing emphasis on HD VOD and the number of ‘HD
choices’ (channels + HD VOD movies)
– Most cable operators no longer charge a specific HD fee
– Accelerate digital migration
– ‘Recapture’ bandwidth by switching-off some of the analogue
channels locally
– Introduce ‘switched digital’ transmission technology
There are 14 European HD platform
launches in the 2007-2008 period
Number of HD channels in Europe to exceed 100 next
year – still mainly movies, sport and documentary
Households with HD ready sets (000s)
250
Around 200 by 2012
200
150
70 at end-2007
100
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Number of channels unduplicated of Pan-Nordic, pan-European and ‘overspill’ feeds
Number in US not that much more – but all
focused on one market
200
DirecTV
150
‘big bang’
HD channels
100
Pay TV Voom
launch failure
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009
The number of new European HD channels
launching has slowed down
• 32 in 2006
• 26 in 2007
Net additions per year
35
30
25
20
15
10
5
0
2004 2005 2006 2007 2008
0
2
4
6
8
10
12
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BSkyB still leads as the European operator with
HD
France likely to be lead European market on TV
mass market HDTV
• A ‘lucky laggard’ technical route
• Good co-operation between hardware, regulators, broadcasters
• Strong uptake expected right from launch because:
• 1. An attractive offering: 4 of the top 5 channels of which 4 free-to-air
channels
– On DTT and Free DTH (TNTsat)
– Commitments on ‘true HD’ output
– Bullish HD players TF1 and ARTE
• 2. A significant HDTV-enabled installed base at launch
– Many sets and adapters sold in 2008 will be already Free-HDTV ‘plug-and-play’
– On the pay side, existing Canal Plus DTT boxes are already MPEG-4
HD
French HD DTT TV
Regulation: The hardware regulation
• From December 2008 all HDTV sets and retail set-top boxes must be
– DVB-T ready
– MPEG-4 ready
• Retailers and manufacturers welcoming and even anticipating the move
– Many sets in retail now are already complying
– STB makers will quickly put affordable MPEG-4 boxes on the market
– Cheap ‘modules’ to upgrade sets or STBs to MPEG-4 HD
• The ‘HD-ready’ logo replaced by two new logos for IDTVs and retail STBs:
– ‘HDTV’ meaning HD-ready AND integrated MPEG-4 DTT tuner
– ‘HDTV 1080’ – the full HD version of the same
HD
French HD DTT TV
UK uptake v. France uptake
• Question: What will be the best way to
watch the 2012 Olympics in high definition?
• Answer: Take a Eurostar at Saint Pancras
and go to a bar in Paris.
Thank you