The UK’s digital TV experiment Freeview is just one year old but has just passed the 2 million homes mark that represents about an 8.3% market share in the UK Television market.

The BBC’s shift to offer Freeview channels is probably the most important ingredient in this success, and in order to maintain its lead in digital TV it is off on another huge marketing campaign, just as other ervices such as Disney, get ready to launch their own services this winter.

The BBC has issued predictions that Freeview will double its penetration in the coming 12 months and hit
2.5 million by the end of 2003.

The only cost associated with the service is buying either a set-top that will convert signals for an existing TV set or to buy a new digital ready TV set. The prices of the new TV sets is slowly but surely coming down. The average price is now around £840 for a new digital set, with prices ranging from £350 to Sony’s top of the market £1,700 36 inch model.

Freeview was set up as a replacement to the collapsed ITV Digital, which folded largely due to its single
minded strategy of buying up football rights in the UK.

The BBC, in conjunction with Crown Castle, launched Freeview to allow viewers access to digital channels without paying subscription fees.

BBC offers a number of channels on the service and a new channel UK History has been launched for it.
US shopping channel QVC, is live on it and there’s now around 30 channels in total. Channel 4 and Disney are preparing new channels for the system.

However a report this week from Informa Group says that things are not all rosy in Freeview and that
subscriber growth will slow dramatically in 2004 and continue to fall thereafter. (Mind you this is the
same research company that says that film companies have nothing to fear from piracy).

Informa expects Freeview to add just 678,000 homes in 2004 and in 2005, a further 357,000 homes and then
settle back to 250,000 a year. This would mean a total of 4.7 million by 2010, contrasting with the BBC’s
expectation of 4 million by the end of 2004.

© Copyright 2003 Faultline

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