MUMBAI: European cable and satellite companies will have to convince nearly 232 million households that TV is worth paying for if they are to lure audiences away from free Digital TV services.
eMarketer has released a report Europe Digital TV 2004. The company's senior analyst Ben Macklin who wrote the report added, "eMarketer calculates the market, itself, to be significantly larger, as well. Free digital terrestrial TV has the potential to curb the growth of Pay-TV in the region. So providers need to be prepared."
eMarketer aggregated and analysed e-business and Internet data from more than 1,700 sources. The report examines why Europeans are not clamoring for their Pay-TV, and outlines the business challenges that face cable and satellite providers in the region.
In the US the NCTA reports that nearly 90 per cent of TV households subscribe to a cable or satellite TV service. In Europe, the number is just 53 per cent of TV households, according to SES Astra Satellite Monitor.
One free service, the UK's Freeview, offers a smaller selection of high quality channels than Pay-TV providers and does not offer premium sport or movies. Another in Germany functions similarly and has been successful, Macklin said, even among Pay-TV subscribers looking to add digital services to a second or third television set.
Consumers have more choices in this scenario. As a result, Pay-TV operators will have to go beyond unique content and into advanced TV services such as digital video recording (DVR), video-on-demand (VOD) and high-definition television (HDTV).
In terms of infrastructure the report has noted that cable companies that have not upgraded their networks for digital TV risk losing paying TV subscribers to free or low-cost terrestrial alternatives once analogue TV is switched off.
Further, if cable networks are incapable of supporting higher Internet bandwidth tiers than the 512kbps or 1024kbps most commonly offered, they won't attract future subscribers to either their TV or Internet service, or to any 'triple-play' offerings, which includes telephony.
The report also answers the question of whether the Internet emerge as a viable fourth platform for digital TV and also examines the prospects for advanced TV services such as HDTV, VOD and DVRs in Europe.