| KN32063 |
| KEY NOTE DIGITAL TELEVISION : JUNE 2003 |
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This report covers: Digital TV,digital satellite,digital cable,ONdigital,Sky Digital,Multicrypt,Simulcrypt,choice for consumers,impact on other industries,financial structure of the industry,Advertising & Promotion,
Companies covered include: British Sky Broadcasting Group, Carlton Communications, Ntl Group, Telewest Communications, British Broadcasting Corporation, Carlton Communications, Channel Four Television Corporation, Granada, NTL, Telewest Communications,Crown Castle International, Digital Interactive Television Group, EMAP, FTN, Kingston Communications, TVCompass, DTV Services, Pace Micro Technology,
| 1. Market Definition 7 |
| REPORT COVERAGE 7 |
| MARKET SECTORS 7 |
| Digital Satellite Television 8 |
| Digital Cable Television 8 |
| Digital Terrestrial Television 8 |
| Pay-per-View Television and Free-to-View Digital Television 9 |
| MARKET TRENDS 9 |
| ECONOMIC TRENDS 10 |
| Population 10 |
| Table 1: UK Resident Population by Sex (000), Mid-Years 1998-2002 10 |
| Gross Domestic Product 11 |
| Table 2: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 11 |
| Inflation 11 |
| Table 3: UK Rate of Inflation ( percent), 1998-2002 11 |
| Unemployment 12 |
| Table 4: Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 12 |
| Household Disposable Income 12 |
| Table 5: Index of Household Disposable Income (index 1971=100), 1997-2000 12 |
| MARKET POSITION 13 |
| The UK 13 |
| Overseas 13 |
| 2. Market Size 14 |
| THE TOTAL MARKET 14 |
| Table 6: The Total UK Market for Digital Television by Platform by Value (£m), 1998-2002 14 |
| Table 7: Shares of Pay-TV and Digital TV Held by the Satellite, Cable and Terrestrial Television Platforms by Viewer Numbers per Quarter ( percent), 2000-2002 15 |
| Table 8: UK Multi-Channel Pay-TV Penetration by Platform (000 households and percent), Third Quarter 2002 16 |
| BY MARKET SECTOR 16 |
| Digital Satellite Television 16 |
| Table 9: The UK Digital Satellite Television Sector by Value at Current Prices (£m), 1998-2002 17 |
| Table 10: Satellite Television's Share of Pay-TV and Digital TV by Viewer Numbers per Quarter ( percent), 2000-2002 17 |
| Digital Cable Television 18 |
| Table 11: The UK Digital Cable Television Market by Value at Current Prices (£m), 1998-2002 18 |
| Table 12: Digital Cable Television's Share of Pay-TV and Digital TV by Viewer Numbers per Quarter ( percent), 2000-2002 19 |
| Digital Terrestrial Television 19 |
| Table 13: The UK Digital Terrestrial Television Sector by Value at Current Prices (£m), 1998-2002 19 |
| Table 14: Digital Terrestrial Television's Share of Pay-TV and Digital TV by Viewer Numbers per Quarter ( percent), 2000-2002 20 |
| Table 15: UK Free-to-View Digital Television Usage by Type of Connector by Number of Households (000 and percent), Third Quarter 2002 21 |
| 3. Industry Background 23 |
| RECENT HISTORY 23 |
| NUMBER OF COMPANIES 24 |
| Table 16: Number of UK VAT-Based Enterprises Engaged in the Telecommunications Sector by Turnover Sizeband (number and percent), 2001 and 2002 25 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 26 |
| DISTRIBUTION 26 |
| HOW ROBUST IS THE MARKET? 27 |
| LEGISLATION 27 |
| Digital Television Action Plan 27 |
| Draft Communications Bill 28 |
| BSkyB 29 |
| KEY TRADE ASSOCIATIONS 29 |
| Cable Telecommunications Training Services 29 |
| Confederation of Aerial Industries Ltd 30 |
| Consumers' Association 30 |
| The Digital Television Group 30 |
| EuroPacketCable Forum 30 |
| Independent Television Commission 31 |
| Intellect 31 |
| OFTEL 32 |
| 4. Competitor Analysis 33 |
| THE MARKETPLACE 33 |
| MARKET LEADERS 33 |
| British Broadcasting Corporation (BBC) 33 |
| Company Structure 33 |
| Current and Future Developments 34 |
| Financial Results 34 |
| British Sky Broadcasting Group PLC 34 |
| Company Structure 34 |
| Current and Future Developments 35 |
| Financial Results 36 |
| Carlton Communications PLC 37 |
| Company Structure 37 |
| Current and Future Developments 37 |
| Financial Results 38 |
| Channel Four Television Corporation 38 |
| Company Structure 38 |
| Current and Future Developments 38 |
| Financial Results 39 |
| Granada PLC 40 |
| Company Structure 40 |
| Current and Future Developments 40 |
| Financial Results 40 |
| NTL Group Ltd 41 |
| Company Structure 41 |
| Current and Future Developments 41 |
| Financial Results 42 |
| Telewest Communications PLC 42 |
| Company Structure 42 |
| Current and Future Developments 42 |
| Financial Results 43 |
| OTHER COMPANIES 43 |
| Crown Castle International 43 |
| Digital Interactive Television Group Ltd 43 |
| EMAP PLC 44 |
| FTN 45 |
| Kingston Communications (Hull) PLC 45 |
| TVCompass Ltd 45 |
| OUTSIDE SUPPLIERS 46 |
| DTV Services Ltd 46 |
| Eldon Technology Ltd 46 |
| Pace Micro Technology PLC 46 |
| MARKETING ACTIVITY 47 |
| Satellite Television 47 |
| Table 17: Main Media Advertising Expenditure Across Sky Satellite Television Formats (£000), 2001 and 2002 48 |
| Cable Television 48 |
| Table 18: Main Media Advertising Expenditure by the UK's Cable Television Providers (£000), 2001 and 2002 49 |
| Digital Terrestrial Television 49 |
| Table 19: Main Media Advertising Expenditure by the UK's Digital Terrestrial Television Providers (£000), 2001 and 2002 50 |
| ITV Associated Channels 50 |
| Table 20: Main Media Advertising Expenditure by the ITV Associated Channels (£000), 2001 and 2002 51 |
| 5. Strengths, Weaknesses, Opportunities and Threats 53 |
| DIGITAL SATELLITE TELEVISION 53 |
| Strengths 53 |
| Weaknesses 53 |
| Opportunities 54 |
| Threats 54 |
| DIGITAL CABLE TELEVISION 54 |
| Strengths 54 |
| Weaknesses 55 |
| Opportunities 55 |
| Threats 55 |
| DIGITAL TERRESTRIAL TELEVISION 56 |
| Strengths 56 |
| Weaknesses 56 |
| Opportunities 57 |
| Threats 57 |
| 6. Buying Behaviour 58 |
| HOUSEHOLD PENETRATION 58 |
| Table 21: Penetration of Pay-TV and Digital TV by the Satellite, Cable and Terrestrial Television Platforms ( percent of TV households), 2nd Quarter 2000 to 2nd Quarter 2002 58 |
| By Demographic Group 59 |
| Table 22: Viewers Who Receive Satellite, Cable and Digital Television at Home and Length of Subscription by Sex, Age, Social Grade and Region ( percent of households), 2002 59 |
| Type of Service 60 |
| Table 23: Satellite, Cable and Digital Television Services Received by Sex, Age, Social Grade and Region ( percent of households), 2002 61 |
| USAGE OF PAY-TV 62 |
| Table 24: Consumers Who Use a Pay-TV Service to Watch Films, Sports and Other Events by Sex, Age, Social Grade and Region ( percent of households), 2002 63 |
| INTERACTIVE TV 64 |
| Table 25: Penetration of Sky Digital Interactive by Sex, Age, Social Grade and Region ( percent of households), 2002 64 |
| 7. Current Issues 66 |
| NEW PROGRAMMES DRIVE UPTAKE 66 |
| IMPACT OF CONSUMER CHOICE 66 |
| CORPORATE ACTIVITY 67 |
| NTL and Telewest Comunications 67 |
| Carlton Communications and Granada 68 |
| INTERACTIVE MARKET 68 |
| ASIAN MARKET 69 |
| 8. The Global Market 70 |
| THE US 70 |
| EUROPE 70 |
| Germany 70 |
| France 71 |
| Spain 71 |
| The Netherlands 71 |
| Croatia 72 |
| THE MIDDLE EAST 72 |
| Israel 72 |
| ASIA 73 |
| Japan 73 |
| 9. Forecasts 74 |
| FORECASTS 2003 TO 2007 74 |
| Table 26: The Forecast Total UK Market for Digital Television by Platform by Value (£m), 2003-2007 74 |
| FUTURE TRENDS 75 |
| Digital Take-Up 75 |
| SECTOR TRENDS 75 |
| Getting the Balance Right 76 |
| 10. Company Profiles 77 |
| British Sky Broadcasting Group Plc 78 |
| Carlton Communications Plc 80 |
| GRANADA PLC 82 |
| Ntl Group Ltd 84 |
| Telewest Communications Plc 86 |
| Further Sources 88 |
| Associations 88 |
| General Sources 88 |
| Bonnier Information Sources 89 |
| Government Publications 90 |
| Although the digital TV market has not yet reached maturity, it has attained a level of stability after 5 years of significant activity. The choices open to consumers now include Sky Digital on the digital satellite (D-SAT) platform, NTL and Telewest on the digital cable (D-Cable) platform, and a consortium led by the BBC and Sky on the digital terrestrial television (DTT) platform. |
| The UK digital television market is one of the most advanced in the world and boasted the first ever commercial DTT platform. However, the problematic development of the UK's market has been mirrored across Europe. Despite these problems, BSkyB has proved that digital TV is a viable business and its success contrasts with both the UK's cable and terrestrial television platform providers. |
| The UK Government is committed to switching off the UK's analogue television service, beginning in 2006 and completing a total switchover to digital television by the end of 2010. However, the technological and social scale of preparation for digital switchover should not be underestimated. The interaction of broadcasters, manufacturers and consumers will be the driver behind this change. The challenge that faces the Government and the UK digital TV providers continues to be persuading viewers to purchase the set-top boxes and viewing equipment that are required to access digital television services. |
| UK consumers are being confronted with a greater number of viewing choices, which are fragmenting the television marketplace. While this presents challenges to existing commercial channel and programme providers, it provides opportunities for new channels that are able to take advantage of the additional space offered by the digital television platform. |
| The UK's pay-TV operators' efforts to increase their revenues per subscriber are targeted at existing digital subscribers by actively providing a wider range of services. A greater array of services available might prove more attractive to potential consumers, thereby increasing growth in subscriber numbers. The number of services that are available is dependent on the development of technology such as interactive services, which will be critical to the maturity of future revenue streams. It is certain that the key to further growth in the industry will be balancing the way in which companies mix television content, marketing, technology and customer services. |
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Last updated by Amanda Porteous July 2003
