Digital TV Grabs 20 Million Subscribers in 2000

By the end of 2001, 38 million homes worldwide will have access to interactive digital television services, up from 20 million that currently have the services, according to a report by Strategy Analytics.

The report, “Interactive Digital Television: Worldwide Market Forecasts,” also predicts that 625 million people around the world will have access to online services on their TV sets by 2005, including online shopping, banking, games, information and interactive entertainment services. Western Europe accounts for 62 percent of the interactive digital television audience in 2001; while North America accounts for 18 percent; Asia-Pacific, 10 percent; and Latin America, 1 percent.

The most advanced market in the world is the Britain, where 40 percent of homes will have interactive digital television by the end of 2001. All of Britain’s major digital platforms: satellite, cable and terrestrial, offer a wide range of interactive services such as interactive sports coverage, t-commerce, games, email and walled-garden Internet.

Other leading European markets include Denmark (25 percent household penetration by the end of 2001), Spain (23 percent) and Sweden (22 percent). The success of advanced digital television services is leading to the emergence of a fast-growing new industry of interactive television application and software developers eager to build on the potential of the new platforms.

The satellite industry continues to dominate the emerging digital television market. Strategy Analytics found that 65 percent of all new digital television customers worldwide chose a satellite-delivered service in 2000, compared to only 31 percent who opted for cable. Cable operators, particularly in Europe, are still failing to respond to the growing threat from satellite-based multichannel and interactive services.

In total, 20.5 million homes switched to digital television in 2000. Satellite’s share of new digital customers increased slightly in 2000, to 65 percent from 64 percent the year before, while cable’s share fell from 32 percent to 31 percent. The balance is accounted for by digital terrestrial television operators, who took 4 percent in each year.


Distribution of Worldwide
Interactive TV Audience
Western Europe 62%
North America 18%
Asia-Pacific 10%
Latin America 1%
Source: Strategy Analytics

Cable is faring better in some markets. In North America, for example, cable added 4.5 million digital subscribers in 2000, bringing digital penetration to 12 percent of cable homes. In Britain, operators have finally begun to roll out digital services over the past 12 months. But in most parts of Europe digital cable is behind schedule — only 7 percent of cable homes have so far switched to a digital service.

Strategy Analytics predicts cable will regain some momentum in 2001, as growth in some leading satellite services slows down and as European cable operators put more emphasis on digital. This year, the researchers predict that cable will account for 40 percent of new digital subscriptions worldwide, compared to 55 percent for satellite.

“The continued restructuring and consolidation of the cable industry will eventually help to speed the digital transition,” said David Mercer, vice president, consumer practice at Strategy Analytics. “Right now, though, satellite appears to be continuing its momentum.”

While digital interactive television will make TV-based e-commerce (t-commerce) more accessible to the public, TechTrends, Inc. found that only one-sixth of all cable and satellite subscribers are willing to pay a monthly fee for t-commerce applications.

The TechTrends study, “TV-Based E-Commerce: An Investigation of Consumer Interest, Pricing and Payment Preferences,” examined consumer demand for t-commerce applications such as investing and banking, ordering groceries, ordering restaurant meals for immediate delivery, and shopping for products typically found at retail stores.

Other findings from the TechTrends study include:

  • The majority of consumers prefer to have t-commerce transactions billed to their monthly cable or satellite statements, while only one in six prefer to type their credit card information on-screen.
  • More than half of non-online shoppers consider a transaction’s security to be the most important consideration.
  • Although one in three consumers show an interest in TV-based banking and investing, only one in 17 would pay more than $3 per month for this type of service.
  • Consumers who access the Internet on their PC while watching TV (simultaneous users) have very different levels of interest and price sensitivity for most t-commerce applications than consumers who engage in both activities separately (non-simultaneous users).
  • Nearly one-fourth of simultaneous users would pay a monthly fee to order restaurant meals for immediately delivery, compared to about one-sixth of non-simultaneous users.

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