Freeview boxes must be cheaper says study

Continental Research has found that freeview boxes will need to be priced at 50p if the Government is to reach its 95% target for digital penetration.

The cheapest model currently available is £99. At that rate, says Continental, household penetration will reach just 55%.

Continental director Dave Chilvers said: "While familiarity with the freeview concept may increase the forecasts for sales, the giveaway idea is not that incredible - it's what happened in the pay-TV market with free dishes. It's credited with giving the market the push it needed."

Chilvers praised the recent awarding of the licences for the old ITV Digital multiplex to a free-to-air consortium of the BBC, BSkyB and Crown Castle, which he said would stimulate the market. But he warned that cheaper boxes are vital to its success.

"Aggressive marketing of the new freeview service and making free-to-air set-top boxes this year's must-have Christmas present will be crucial to giving the market a boost," he said.

The research found that interest in the product rose from 14% to 32% of the adult population as the price fell from £99 to £25.

The number of homes with free-to-air capabilities currently stands at about 900,000. That would rise to 4.1 million if the product was priced £49, according to the research.

Grundig and Pace currently market set-top boxes. Pace has sold 53,000 boxes at £99 since its March launch. NovaPal is launching its Setpal product in September and Nokia is also planning to enter the market.