High-definition viewing to reach 44 million homes by year-end

Thursday, April 10th, 2008
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HDTV is finally on the brink of mass market acceptance, according to a new report from Informa Telecoms & Media. Simon Murray, the report’s author, says: “A major contributing factor is that set and settop box prices have fallen substantially in the last two years.”

National free-to-air broadcasters are launching HD services, which will further stimulate take-up. High-definition TV won’t take off in any territory until the main free-to-air broadcasters are involved. Major sports events such as the Olympics and Euro 2008 spur FTA broadcasters to provide more HD programming.

Murray continues: “Digital platforms now use HD channel provision as a differentiator against their competitors. Operators often pay carriage fees for showcase HD channels, especially from main FTA players and prestigious international brands such as Discovery. There are no hard and fast reasons why HD works, but take-up grows substantially when a tipping point of choice (around 20 channels) is on offer. ”

According to the report, Global HDTV Forecasts 3rd Edition, only 4% of global homes will actively watch HD programming by the end of this year. However, this means nearly 44 million active HD households, up 19 million from the end of 2007 (or 2% of global TV households).

Global active HDTV homes by region 

(million)               2007   2008   2009   2012
                        ----   ----   ----   ----
Asia Pacific             5.3    8.9   14.3   49.3 
Europe East/Middle East  0.0    0.2    0.5    4.1 
Europe West              1.3    3.2    6.7   31.5 
Latin America            0.0    0.0    0.1    1.6 
North America           17.8   31.2   47.7   92.0
                        ------------------------- 
Global Total            24.5   43.5   69.3  178.6

Source: Informa Telecoms & Media

By 2012, Informa forecasts 179 million active HD homes, representing 16% of TV households – more than quadruple the 2008 figure.

Penetration of active HD homes will vary considerably from one country to the next. Canada and the US will have over 70% penetration by 2012, with Japan next at 58%.

The next highest country, Korea, will be quite far behind at 39%, and no other country will be above 30%. Some large territories will have very low shares, such as Brazil (1%), Russia (1%), China (2%) and India (2%).

Global active HDTV homes by region as a % of TV households

                        2007  2008  2009  2012
                        ----  ----  ----  ----
Asia Pacific               1     2     4    16
Europe East/Middle East    0     0     0     4
Europe West                1     2     4    18
Latin America              0     0     0     2
North America             14    25    37    70
                        ----------------------
Global Total               2     4     6    16

Source: Informa Telecoms & Media

HD take-up has been highest in North America, partly due to lower-priced equipment and greater content availability but also because the picture and audio quality of standard definition (SD) programming is relatively poor.

By 2012, the US will have 82.5 million active HD homes and Canada will contribute a further 9.4 million.

Asia Pacific is the second-largest region, thanks mainly early adoption in Japan. The region will retain second place – and increase its share of the global total – by 2012, due mainly to take up in Korea (8.0 million) and China (8.4 million).

Murray explains: “France [7.7 million] will boast the highest number of active HD homes in Europe by 2012, spurred mainly by the positive attitude to HD of its FTA broadcasters and digital platforms.

The same cannot be said of Germany [3.8 million], where the lack of interest from some of the FTA channels will result in slower HD take-up not only in Germany but also in Austria and Switzerland.

Adoption in the UK [7.4 million] will be very close to the French example.”

Top 10 countries by active HDTV households in 2012

Country   Active HD homes (000)
-------   ---------------------
USA                      82,534
Japan                    27,084
Canada                    9,441
China                     8,367
Korea                     8,035
France                    7,657
UK                        7,351
Italy                     4,644
Germany                   3,838
India                     2,092

Source: Informa Telecoms & Media

Owning an HD-ready set does not automatically mean reception of HD programming. In fact, the number of homes with an HD-ready set is estimated to reach 117 million by end-2008, so only 37% of these homes will actually watch HD programming.

Global HD-ready homes by region (million)

                         2007   2008   2009   2012
                         ----   ----   ----   ----
Asia Pacific             18.7   26.1   36.7   84.6
Europe East/Middle East   0.8    1.6    2.9    9.8
Europe West              16.2   25.7   35.2   69.0
Latin America             0.3    0.7    1.5    4.9
North America            45.3   62.8   79.5  111.6
                         -------------------------
Global Total             81.3  116.9  155.8  279.8

Source: Informa Telecoms & Media

HD-ready set sales are growing fast, with another 36 million homes to be added in 2008. This will bring global penetration to 11% of TV households. Rapid take-up will push this fraction to a quarter of global TV households – or 280 million – by 2012. At this point, nearly two-thirds of homes with HD-ready sets will watch HD programming.

Global HDTV Forecasts 3rd Edition is published by Informa Telecoms & Media, which produces several media business publications, including Television Business International, New Media Markets, Converging Media and TV International.