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Europe: DTV Terrestrial Shows Steady Growth

What may be most telling about some new research on the ongoing DTV transition in Western Europe is what it apparently does not cover: namely, anything having to do with HD. There's good reason for that, of course.

Until recently, HD was virtually ignored by most DBS, cable and terrestrial interests that serve Europe, both as a technology and as a marketing priority. Nevertheless, it has come a long way in a short period of time, thanks to Rupert Murdoch's BSkyB promoting its upcoming DBS HD line-up, as well as other firms.

Also, according to researcher Canalys, there's a trend underway that flies in the face of what's happening in the United States right now--he fact that free over-air terrestrial viewing is actually growing, and will continue to grow in the digital world--thanks largely to government STB subsidies in several nations. At the same time, DBS and digital cable are projected to slowly shrink.

The number of DTV households in Western Europe crossed the 50-million mark during the first half of 2005, driven largely by pay-TV providers continuing to shuffle their subscribers from analog to digital tiers and the arrival of free digital terrestrial services in many countries, according to Canalys.

Nearly a quarter of all homes (24 percent) currently use terrestrial signals to receive digital content. Canalys expects more than 40 percent of European digital TV households will tap into only free terrestrial by 2008. The United Kingdom has the highest household digital TV penetration in Europe, primarily driven by satellite services (about half of all TV homes in Western Europe use DBS. It may be even higher in Eastern Europe.) Finland comes in a close second with a combo of free terrestrial and cable.

In Germany, where cable providers still serve most customers with a large quantity of analog channels, the nation has taken a regional approach to analog switch-off, which will not be fully implemented until 2010.

France is the European leader in broadband-based IPTV, according to Canalys. In Italy, free terrestrial digital is experiencing strong growth, at least partly due to government subsidies on set-top boxes. The main beneficiaries have been digital terrestrial broadcasters.