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UK leads the way on digital TV beating US and France

LONDON - UK consumers are embracing digital TV services, such as high-definition TV and digital video recorders, leading to a sea change in the way broadcasters are funded, with advertising no longer the majority source of commercial TV revenue.

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Ofcom's third International Communications Market Report into the £876bn global communications market reveals that of the larger countries surveyed, the UK has the most households with digital TV on their main set, at 86%, up 9% on the previous year.

The US is second in terms of digital take-up with 70% of households owning a digital TV, up 15% over the past year, followed by France at 66%.

Ofcom's research also shows that the take-up of new communications services is having an impact on traditional industry revenues as consumer behaviour changes.

With the growing popularity of pay television services, and the rising take-up of DVRs, advertising revenues no longer account for the main source of commercial TV funding.

Global advertising accounted for 49% of revenue (£81bn), down from 50% on last year, while subscription revenues were at 43% (£71bn) - up by 2% on the year.

The report covers take-up, availability and use of broadband, landlines and mobiles, TV and radio in 12 established industrial economies and four fast-growing economies: Brazil, Russia, India and China.

High-definition services were relatively new in 2006, but the report reveals that take-up of HD subscriptions has been huge, especially in the UK, US and Canada. In the UK, Sky and Virgin Media have both pushed their HD services strongly.

Although the US has the highest number of households with HD subscriptions at 6m (6.2%), the number of HD households in Canada is nearly 2m, representing 17.6% of households.

The UK leads Europe with 700,000 HD households (6%), higher than the combined number of HD households in France, Germany and Italy at 500,000.

Ofcom's report also shows that more households are choosing to pause, record, store and fast-forward TV programmes with a digital video recorder.

The UK again leads the way with 30% of people saying they own a DVR, followed by Italy at 21% and Canada and the US at 20%.

According to price comparison research commissioned for the report, consumers in the UK continue to get a good deal when buying communications services.

This is firstly due to competitive markets driving prices down and secondly because consumers are shopping around for good deals through "bundling" -- taking multiple communications services from a single provider.

A typical basket of services, including a landline, four mobile phones, basic pay-TV and broadband, is available in the UK for £104 a month when they are purchased together within a 'triple-play' deal, with Italy offering the next lowest price at £114, and then France at £131.

Mobile growth was particularly high in emerging markets with 216m new mobile subscriptions in Brazil, Russia, India and China.

In 2007, China alone had more than 88m new connections, more than the total number of subscriptions in the UK (74m). Take-up in Russia increased nearly 1000% from 12 connections in 100 people in 2002 to 123 connections in 2007, with more than one connection per person in Russia for the first time.

 

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