HDTV: INTERVIEW WITH AN EXPERT
Jacques Bajon, Senior Analyst at IDATE, answers the key questions about the dynamics of the HDTV market in Europe

What are the main factors driving the HDTV market in Europe?
As is to be expected, HDTV in Europe has begun predominantly as a pay-TV service, as in the USA. The principal factors driving this trend are that HD is an enhanced route to delivering premium content and can also be bundled into a compelling hybrid offer with other value-added services including VOD, PPV and PVR.

Other factors which are more related to competition could also help drive Europe’s HD market. It could be a key differentiator for pay-TV operators in markets reaching a degree of maturity and facing fierce competition from emerging operators of IPTV services.

Are the growth prospects for HD in Europe encouraging?
There are unquestionable growth prospects in the HD market for subscription TV services. However, unlike the USA, where 90 per cent of homes subscribe to pay-TV (55% digital), the proportion in Europe is far lower (30% in France, 40% in the UK).

The prospective population for subscription-based HD is therefore smaller. Nor should we expect service providers of free TV to promote pay-TV or to frustrate the majority of viewers currently deprived of HD services by offering a service to which they have no access.

Is ‘Free HD’ an essential component for growth?
In order to enhance the exposure and consumption of HD programmes, alternative broadcasting platforms need to be found to provide free TV services. The rollout of free HDTV, with the impulse coming from commercial and generalist public channels, is the only way of enabling the widest possible audience to enjoy the benefits of this technological progress.

Since access to new terrestrial frequency spectrum is bound up with analogue switch-off, satellite networks could take on a central role to achieve this audience reach. Satellite-based networks do not have the same capacity constraints as terrestrial networks and are still the most efficient vehicle in terms of channel transport costs.

Satellites are also the ideal complement to DTT coverage, and could help to enhance the existing DTT offer with HD services. Between the two, in the most dynamic urban markets, IPTV could offer a hybrid model for gradual enhancement of the offering, at no extra cost to the subscriber.

When is ‘free HDTV’ likely to become a reality?
Free HDTV services in Europe’s major markets could arise from 2008, with the implementation of satellite offers and the introduction of HD services by generalist channels. However, the question of the additional costs bound up with the rollout of an HD offering, and the ‘who and what’ is involved (a consortium in charge of the service, ordering of set-top boxes etc.) needs to be addressed. A broad mass market can ultimately only be achieved via the DTT network, which is not before 2010 at the earliest.

What is the current status of HDTV channels across Europe?
At the end of 2006 there were approximately 40 HDTV channels broadcasting in Europe, principally offered by pay-TV operators in the UK, France, Germany and Italy. In parallel to this expected take-up in western Europe, Poland and Turkey have emerged as earlier than expected adopters of HD. The number of channels will dramatically increase in the coming years as pay-TV platforms strengthen their HD line up, major public service broadcasters and commercial channels launch HD versions of their Standard Digital channels in simulcast, and as new countries including Spain and “mid-size” European markets enter the HDTV landscape. With these combined factors, HTDV channels in Europe could double to over 100 by 2010.

Interview based on IDATE multiclient report; ‘HDTV, ready for the take-off?'