July 05, 2008

HD adoption in the UK

An interesting press release from screendigest.com is being widely commented upon on other sites. You can read the full release here, or, if you have a few thousand euros and several days to digest the full 230 pages, you can get the entire report here.
In my professional experience expensive consultancy reports normally state the bleedin' obvious, making you wonder why you didn't write it yourself in the first place. But ocassionally they put a twist on it, and to some degree this is one of those.
First big finding is that despite the considerable sales of HD ready TVs, the vast majority appear to be happy to stick with standard definition broadcasts or are ignorant of the difference between SD and HD. Hardly innovative thinking. It also states that the lack of HD programming is a major problem facing adoption in Europe - again, nothing new there.
But it then suggests that pay TV only has a limited opportunity to cash in on the HD market before the free-to-air technologies evolve to deliver HD and it becomes the norm. Very true - Sky has seen this already and has already signed up half a million (and rising) premium rate customers, whilst Virgin Media is doing its best to drive its own top-paying customers to Sky HD too.
Europe's Pay TV operators are using HD to increase loyalty and reduce churn rates and to increase revenues per subscriber (ARPU). Some operators have also been able to charge subscribers a premium for HD content; others have offered it for a small fee or none at all for subscribers with an HD box. Screen Digest believes this approach will become the most popular as cable and satellite operators drop fees to encourage more people to upgrade to HD.
In a maturing pay TV market HDTV can also drive customer acquisitions as consumers who upgrade to an HD display might also wish to upgrade to a pay TV package to fully enjoy their new purchase. In this sense, pay TV operators have a window of opportunity in which to drive subscriber growth before HD broadcasts become available on free-to-air platforms.
So how long will HD remain a premium pay-for product? The report suggest 2015, but I think 2012 will prove the tipping point in the UK as that's when we'll see the analogue signal finally off, MPeg4 on Freeview and Freesat fully loaded. Whither Virgin Media? Who knows - the silence is deafening, they seem incapable (either through funding or strategic will) to cash in at the moment and have opted for the "who needs high definition?" head in the sand approach.
Anyone who doesn't believe the customer doesn't appreciate better quality should ask themselves when did they last watch a VHS tape or listen to a cassette - once you've experienced better, it's difficult to accept lower standards.
Have a read of the press release and let me know what you think. (And thanks to Dazza for supplying the source for this post - cheers mate!)

8 comments:

dazza124 said...

Wimbledon PQ has been fantastic.Have been watching Murray this past week.
Even if your not a tennis fan you could have, like me, switched between BBCHD.BBC1/2 and clearly seen the difference.I have stated before i also have a Bluray player so with all this HiDef source going back to Sd is painful on the eyes and ears (running audio/video through av amp and listen to bbchd in DD 5.1).

Off Topic.

Nialli any comments from your contact at VM who back in may you said would be trialling the new samsung V+ box.maybe time you gave him a call hehe...

Nialli said...

My contact at VM is on holiday at the moment, so I've no news on that front (and he may not be that forthcoming if the box is on internal trial). Keep an eye of Virgin1's blog though - he's looking to add some equipment reviews shortly and you never know...

demented said...

Sorry to be dull but as the piece is motivated by HD displays I'd like to take up a little talked about area - gaming. A lot of the original HD tv sales were motivated by gaming as well tv source material (there wasn't much) and films.

If we're talking 2015 that's a long time. Of the current 7th generation consoles only the PS3 has a built in Blu-ray player. The Wii tends to be families/casual gaming. The PS3 for avfreaks and the PC and 360 for serious gamers. By 2015 despite the vast losses racked up by MS and Sony on hardware the 8th generation consoles or revised 7th gen consoles should have arrived. The Wii market is the most interesting market, the Wii isn't even high def, but imagine the possible tens of millions of units future Wii revised/successor units will be bringing the first source of HD to countless homes that don't have it at the moment? That's hours of high definition play and high definition movies and then wondering hmmm, what about high definition tv, shouldn't we have some of that?

The other interesting thing on the material is when the soaps (I know Hollyoaks already is) will start broadcasting ft in HD (or even for the forseeable future). Surely by about 2011 ITV and C4 will have got it's soaps up and running in HD. The Beeb I suspect may never have eastenders broadcast in HD unless hours change.

Matt said...

Demented please explain to me this comment "The PS3 for avfreaks and the PC and 360 for serious game". I am a PS3 user and I would say I am a serious gamer. I take it your a 360fan boy? Ha

Also to keep my comment valid for this topic...I bought my HDTV originally for my PS3. If I didn't have the PS3 I doubt I would have bought it just for BBCHD.

Carol Steele said...

I particularly noticed the statement:
"Paradoxically, it has been used heavily as a marketing tool, but has not been followed through with the delivery of HD channels – for example, Premiere in Germany still only offers two HD channels." ....
Sound familiar Mr. Branson??
.... followed by the harsh statistics that:-
"There is a direct connection between the depth of the HD offering and the take up of HD by subscribers. BSkyB has 17 HD channels and on the back of this has signed up almost 500,000 subscribers in less than two years."
I, personally, cannot see Virgin adding many more HD channels over the coming 18 months, C4HD and/or ITV HD if we are extremely lucky. OTOH, with Sky rumoured to be dropping their £10/month HD subscription charge over the coming months, I can only see an increase in the churn to Sky.

virgin1 said...

The HD issue with Virgin is not just hampered by funding issues but by network limitations. I believe that Virgin has all along wanted more HD channels and probably has the rights for them, but with a shrinking EPG lineup due to lack of bandwidth, they cannot launch any more unless analogue is switched off and all the new network equipment is launched (DOCSIS 3, MPEG4, Single Headend). It will happen eventually but until Virgin sort out the network then its just a pipe dream I think :-(

Nialli said...

On Demand may be the more efficient way of delivering HD content on the Virgin network in the short/medium term, but that seems to have taken some pretty big backwards steps in recent months. It'll be interesting to see how the programming that expires this week is replaced. If at all.
The response to the petition has been pretty phenomenal and continues to still add a dozen or so signatures a day. No real response from Berkett's office yet except for a standard "thank you for contacting us" letter and I don't really expect any words back we haven't heard before - but I thought it time we voiced our frustrations en masse. Given the limited audience this blog and other forums reach, the 896+ signatories is I think a pretty powerful statement, especially with many of the comments you guys have added. It was a pretty weighty envelope I took down the Post Office - it may have some effect on their thinking.

demented said...

Matt, I know people with all 3 consoles. Although the PS3 does have people that play it for games, they seem very few and far between compared to say the PS2. Sony just hasn't reached that all rounder console that they want - yet. My point is that 7th generation consoles should sell 150 million units between them. That's a lot of demand for high def. These numbers will out do the 500 000 Sky HD subscribers and the 200 000 V+ers.

Of course Teleport/VOD is an efficient way of delivering things. The issue is whether it's a good model for customers rather than virgin. When it works I like it but it's really more of an SD innovation. I can only wait until Freesat has 3 HD channels and the initial freeview areas get it. Even with the small numbers this should seriously shake perceptions up and maybe jerk virgin into doing something. Of course all this talk of IPTV stuff could mean that virgin want their business model to vastly extend the half the country they can reach and not that bothered about HD and the tv platform - just extending geographically rather than lineup. If that's the case I think it makes business sense for them but I'll be waving them goodbye.