Half of UK TV households choosing pay TV

Almost half of all television households in the UK are now choosing to pay for access to additional television channels, with satellite and cable services driving growth of digital TV according to new research from Ofcom.

Its Digital Progress Report for the fourth quarter of 2008 reveals that 49.5 per cent of households have a pay satellite or cable service on their main television set, up from 48.6 per cent on the previous quarter. This compares to nearly forty per cent (39.3 per cent) of households which had free television services through digital satellite or digital terrestrial television (DTT).

In total, 88.8 per cent of households in the UK had a digital TV service connected to their main set at the end of 2008, up by 2.4 percentage points since the end of 2007.

Homes with access to a High Definition (HD) service rose to an all time high with over 1.5 million in total.

BSkyB’s HD service saw the highest ever number of new homes added during the quarter bringing the total to almost 780,000 subscribers, up 188,000. There were a further 521,000 cable customers subscribing to Virgin Media’s V+ service which allows viewers to watch programmes in HD, while sales of BBC/ITV freesat HD receivers had reached 172,000 by the end of 2008. HD will also begin to become available on DTT from late 2009, with nationwide coverage by the end of digital switchover.

Digital Terrestrial Television (DTT)

• The total number of households with DTT on any set reached 17.7 million, up from 17.2 million during the quarter
• Nearly 4.5 million DTT devices were sold in the fourth quarter of 2008, the highest sales of DTT equipment to date. This was mainly driven by record sales of HD-capable integrated digital TV (IDTV) sets with nearly 3.1 million sets sold during the period
• Some 393,000 DTT digital video recorders were sold during the quarter, bringing total sales to around 2.3m

DTT equipment quarterly sales:

                                            Q4 2007    Q1 2008    Q2 2008    Q3 2008    Q4 2008
                                          ---------  ---------  ---------  ---------  ---------
Freeview set-top boxes                    1,931,130  1,273,955    912,115    973,730  1,409,220
Integrated Digital Televisions (IDTV's)   2,286,900  1,879,605  1,417,500  1,575,630  3,059,700
  Total sales                             4,218,030  3,153,560  2,329,615  2,549,360  4,468,920
DTT DVR sales*                              346,000    252,000    191,000    195,000    393,000

Source: Sales figures from GfK, as adjusted by Freeview**

* DVR sales include devices that combine DVR with DVD recording functionality.
** Freeview adjusts the sales figures upwards by 5% to represent its estimate of the number of DTT set-top boxes and IDTVs sold in Northern Ireland and offshore islands.

Digital Satellite Services (Pay TV services)

• BSkyB reported that its customer base grew by 171,000 to over 9.2 million households in the UK and Ireland during the quarter
• Some 19 per cent of its customers (1.7 million) have at least one extra set connected to Sky through its Multiroom service, an increase of 68,000 on the quarter
• Half (4.65 million) of all BSkyB customers now has a Sky+ service which allows viewers to pause, store and fast-forward TV programmes. This is an increase of 515,000 subscribers on the quarter

Cable (Virgin Media subscribers)

• Virgin Media said that its subscribers rose by 44,500 to reach over 3.6 million households, during the quarter, the highest level of take-up since 2001
• Over half (52 per cent) of its customers were using its video on demand (VoD) service. There were an average of 53 million VoD views per month over the period, up by 60 per cent on a year ago

Digital Satellite Services

• The BBC/ITV Freesat service showed further growth during the quarter reaching 233,000 sales. By March 2009, it reported that sales had reached 300,000
• According to the latest consumer research there were around 600,000 households with free satellite services, similar to the previous quarter

Platform take-up survey results:

                                             Homes (millions)        % TV homes  Net additions  Growth
                                             ----------------  ----------------       Increase    rate
                                             Q3 2008  Q4 2008  Q3 2008  Q4 2008       % points       %
                                             -------  -------  -------  -------  -------------  ------
Total digital pay TV homes                      12.5     12.7     48.6     49.5            0.9     2.0
  Digital Cable                                  3.3      3.3     12.7     12.8            0.1     0.6
  Pay Satellite [1]                              8.8      8.9     34.2     34.7            0.5     1.4
  DTT pay (Top-Up-TV)                            0.4      0.4      1.6      1.5           -0.2    -9.4
  TV over ADSL (Tiscali) [2]                     0.1      0.1      0.3      0.3           -0.1   -16.7

Total Free-to-view digital TV Households        10.0     10.1     38.9     39.3            0.4     1.1
  DTT (Freeview) only homes (non pay) [3]        9.3      9.5     36.5     36.9            0.5     1.3
  Free-to-view Satellite [4]                     0.6      0.6      2.4      2.3           -0.1    -3.2

Total digital TV homes                          22.6     22.7     88.2     88.8            0.7     0.8

All homes using DTT (Freeview) [5]              17.2     17.7     67.2     69.0            1.8     2.6

Source: GfK

1. Pay satellite homes may include some UK households which subscribe to overseas pay satellite services and also an element of survey respondents not differentiating between pay and free satellite.
2. TV over ADSL figures do not include BT Vision customers, to whom live scheduled programming is delivered via DTT (in Freeview coverage areas) rather than by broadband. These homes are therefore included in DTT homes.
3. DTT-only homes (Freeview) means those homes where DTT is the only digital platform and no monthly subscription is paid for additional DTT services such as Top Up TV.
4. Free-to-view satellite homes include all homes with satellite TV on the main set which do not pay a subscription.
5. All homes using DTT includes satellite and cable homes which also use DTT on any set in the home. DTT-only relates to homes where DTT is the only multichannel platform.

More: Full report