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Our expectations for digital TV

Will digital TV continue to grow?

Yes. We estimate that by the end of this year (2004), 58 per cent of homes will have digital TV, and this figure will have risen to 63 per cent by the end of 2005. By the end of 2010, we estimate that 78 per cent of households will have changed over at least one of their TVs to digital.

Our expectations of the likely future take-up of digital TV until 2012 are based on the assumption that there are no changes to policy and that a switchover timetable is not announced.

We think the number of cable, satellite and Freeview viewers will grow. But most households changing to digital in the future will choose Freeview because there is no need to pay a monthly subscription.

The overall rate of growth is likely to slow. Three reasons account for the slowdown in digital take-up as the decade progresses.

• Some households do not value the extra choice they can get from digital TV.
• Though many people want to pay a monthly subscription for premium channels, particularly for sport and films, we do not expect a large growth in pay TV. Its growth has already slowed in the past few years.
• Many households who want to get digital TV without a monthly subscription do not live in areas covered by Freeview, so they cannot get digital TV until switchover happens and the strength of the digital signal can be boosted.

And, as well as every home having a main TV set, most homes have at least one other set in the kitchen, in bedrooms or elsewhere. We estimate that there are over 35 million TVs which would need to be converted if switchover happened this year. We estimate that this number will stay at a similar level in 2010 because households are continuing to buy many more analogue TVs than digital TVs or digital converter boxes.

Does it matter that the growth of digital TV is likely to slow?

One problem is that, at first, the Government set a target of affordability for digital TV which was that 95 per cent of homes had digital TV. That is unlikely to be achieved, mainly because Freeview is only available in about three-quarters of homes.

For the UK to gain the benefits of switchover, the Government needs to make a decision to start switchover before take-up reaches almost every household. This fact is a real challenge for switchover, but the conclusion should not be that switchover is impossible. Everyone should recognise that just allowing the market to carry on as it is, is unlikely to deliver switchover. We need a new strategy to overcome the obstacles in switchover's path.

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