[opendtv] News: Consumers Still Wary Of UK Digital TV
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 15 Apr 2004 08:11:11 -0400
Consumers Still Wary Of UK Digital TV
April 15, 2004 12:00am
Source: PBI Media, LLC. All rights reserved.
Inside Digital TV: Vol. 7 No. 8
Mark Holmes Senior Editor
Despite the recent success of Freeview and BSkyB=20
in the United Kingdom, fewer than 80 percent of=20
households will have digital TV in that country=20
by the end of 2010, based on current consumer=20
attitudes. This finding was one of the main=20
conclusions of a recent report by the UK=20
broadcasting regulator Ofcom.
The report examines the planned analogue=20
switch-off, and it concludes there still are a=20
number of obstacles before a full transition from=20
analogue to digital can take place. Negative=20
consumer attitudes remain a key factor. Recent=20
Department of Trade and Industry research=20
indicate that one in five households are=20
unwilling to adopt digital TV. An analogue=20
switch-off date could harden attitudes still=20
further but it may be necessary to really=20
kick-start the process. While more than 50=20
percent of households in the UK have moved to=20
digital, there still seems to be a great deal of=20
resistance.
Ofcom outlined a best- and worst-case scenario=20
for digital take-up in the UK. In a best-case=20
scenario, BSkyB could launch a low-cost, pay-TV=20
offering successfully. In a worst-case scenario,=20
BSkyB would focus on raising average revenue per=20
user (ARPU) among its existing subscribers rather=20
than to attract a new level of low-paying=20
consumers. With limitations to Freeview's=20
coverage, Ofcom admits digital satellite "could=20
play an important role in increasing the take-up=20
of those who do not want pay-TV." It also admits=20
it could "consider 'regulatory intervention' to=20
secure a viable free-to-view satellite=20
proposition before switchover."
In another best-case scenario, the price of=20
=46reeview receivers would drop to around GBP20=20
(30.4 euros or US$36.7). According to Ofcom, this=20
pricing could spur impulse purchases. However, if=20
these receivers were to stay at the GBP40 (60.8=20
euros or US$73.4) price point, they would be=20
unlikely to become impulse purchases. Along these=20
lines, the prices of IDTVs (Integrated Digital=20
Televisions) also would fall considerably,=20
becoming the main purchasing option for consumers=20
looking for new TV sets. If price points remain=20
high, the transition to digital would slow=20
further.
In sum, these are some of the issues facing=20
Ofcom. In a worst case scenario, digital take-up=20
could be as low as 70 percent by 2012.
In terms of changing consumer attitudes, Ofcom=20
hopes digital television will follow the same=20
lines as did the mobile model. In that view, once=20
the benefits become apparent to consumers, the=20
obstacles to acceptance will fall away.
However, while negative consumer attitudes=20
remain a consideration, Ofcom is likely to=20
announce a timetable for a digital switchover as=20
soon as possible to complete it between 2007 and=20
2010. Ofcom also recommmends a gradual region-=20
by-region switchover process during these four=20
years. A swift announcement also could impact=20
consumer confidence in a positive way by spurring=20
the purchase of new digital equipment. There also=20
would need to be a mass advertising campaign=20
about switichover to build public support. Many=20
hearts and minds still need to be won if digital=20
switchover is to be achieved swiftly.
Ofcom also believes the creation of a body,=20
termed "SwitchCo," should be responsible for=20
helping to ensure a digital switchover by the=20
proposed date. It would also co-ordinate the=20
various parties. Ofcom has been influenced by the=20
success of Berlin's digital switchover in 2003.=20
As a result, confidence rises that a switchover=20
can be successful managed in the UK. [Copyright=20
2004 PBI Media, LLC. All rights reserved.] .end=20
(paragraph)<<Inside Digital TV -- 04/14/04>>
<< Copyright =A92004 PBI Media, LLC. All rights reserved. >>
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