1.1 By the end of 2005, around 17.5 million homes could receive digital TV in the UK – just under 70% of all TV households. Although data are not available for all platforms for early 2006, preliminary sales data for Freeview boxes suggest that by the end of February 2006 digital penetration had exceeded 70% of UK homes.
1.2 Digital take-up continues at a rapid rate. More than 1.1 million households took up digital TV in the fourth quarter of 2005 – more than in any previous quarter. Over 800,000 of these acquired Freeview or Top Up TV. Over the whole of 2005, more than 2.7 million homes took up digital TV – more than in any previous year.
1.3 There are now more homes subscribing to Sky’s pay-TV services than there are using any other television platform in the UK, including analogue terrestrial broadcasts, as their principal source of TV. By the end of 2005, there were 7.7 million Sky subscribers in the UK compared to 7.1 million homes watching analogue terrestrial broadcasts on their primary sets – the first time the analogue terrestrial platform has not been the most common way to receive TV in the UK.
1.4 This shift is due both to large numbers of homes switching from analogue terrestrial television to digital terrestrial services, and to continued growth in Sky’s subscriber base. More than 10.5 million Freeview boxes and integrated digital TVs had been sold by the end of 2005, with digital terrestrial television accounting for seven in ten new digital homes in 2005. The average price paid for a Freeview box has halved since mid-2003, to around £41 at the end of December 2005.
1.5 The pattern of digital take-up continues to vary across the nations and regions of the UK. In Wales, digital penetration had reached 80% by the end of 2005. Digital penetration in Border – the first region to switch off analogue signals in the second half of 2008 – has increased by 17 percentage points over the past year and now stands at 71%. With respect to demographic variations, younger people and those with children in the home are more likely to have taken up digital TV than others.
1.6 Ofcom’s latest modelling suggests that digital TV penetration will continue to grow over the next few years, as a result of both continued market-driven digital take-up and by the implementation of digital switchover on a region-by-region basis, starting in Border in 2008. In 2006, we expect more than 1.7 million homes to take up digital TV; thereafter the number of digital households will continue to grow steadily at around one million homes per annum. By the end of 2010, we expect around 95% of homes to have taken up digital TV of one form or another.
1.7 Most homes have more than one TV set, each of which needs to be converted to digital (or replaced by an integrated digital TV) if viewers wish to continue to use them for viewing broadcast TV after switchover. By the end of 2005, just under one in four homes had fully converted all its sets, up from 16% in March 2005. Sales of integrated digital TV sets doubled between Q3 and Q4 2005.
1.8 Nonetheless there are still many TV sets in people’s homes that have not been converted. Almost 60% of all TVs (36 million) still receive analogue transmissions. However, not all sets will need to be converted by digital switchover – some are not currently used and others are only used for games consoles or DVD players, and may not need to be converted for TV reception.
1.9 Nearly half of all TV viewing (including viewing on secondary sets) is through the analogue terrestrial signal. However the amount of viewing to the analogue signal has declined from nearly two-thirds of all viewing in 2002, and will decline further as digital take-up (and conversion of secondary sets) continues.
1.10 There are currently an estimated 34 million VCRs in use in the UK. Those that viewers use for recording one programme while watching another – currently around 25% of VCRs (7.5 million recorders) are used in this way at least once per month – will need to be replaced by personal video recorders (PVRs) if viewers wish to retain this functionality. By the end of 2005, around 1.4 million PVRs had been sold (mostly Sky+ boxes) and 2.3 million DVD recorders. Most of the latter do not have integrated digital tuners, however, and cannot replicate the full functionality of analogue VCRs.
1.11 The UK now has the highest digital TV penetration of any country in the world, with the US second at 55% of TV homes. Many countries have announced detailed plans for digital switchover, with some areas in Germany and Sweden already having switched off analogue TV broadcasting.