Broadband killed the TV star

Raising competition stakes

European TV broadcasters are losing viewers to the Web, a medium they must embrace as broadband roll out presses on.

That's according to UK-based research firm Strategy Analytics, which said in a new report that TV viewers are spending more time in front of the display connected to their PC, and less time watching the box. "Broadcasters Beware: Broadband Is Stealing Your Viewers" said that a survey of 800 Europeans revealed that some 56 percent have cut down on TV time since subscribing to broadband.

David Mercer, principal analyst at Strategy Analytics, acknowledged that TV will continue to have a place in the home, and won't be entirely replaced by high-speed Internet, but the impact of broadband will nevertheless be dramatic.

"TV companies have to pay heed to the Internet... they clearly have to look at the Web as a way to reach their audience," he told ElectricNews.Net. "Putting TV content on the Web is probably not the best way go about things. A better strategy would be to develop new on-line content that people can interact with."

Mercer points to Discovery Networks, which runs the Discovery Channel, The Learning Channel, Animal Planet and several others, as a media company that is a leader on this front. Discovery's Web site includes interactive games and information, and importantly, a section devoted exclusively to broadband subscribers.

Strategy Analytics notes that in other media, such as newspapers and radio, companies have fended off declining reader and listener numbers by moving to the Web and providing interactive content and services not found in traditional formats. The firm says that TV broadcasters have these weapons, and others, such as interactive TV (iTV) services and Digital Video Recorders (DVRs) like TiVo and Sky Plus (Sky+), to defend against declining viewer numbers.

Broadband marches on

A separate report from Strategy Analytics estimates that Europe will have 33.5 million broadband subscribers by the end of this year, representing 20 per cent of all homes. By 2008, the figure will be 41 per cent, with penetration as high as 60 per cent countries such as the Netherlands, Denmark, Sweden, Switzerland and Belgium, where there are strong competitors to incumbent telecoms.

Healthy competition is the key to broadband growth, according to Strategy Analytics. In markets where an incumbent dominates - such as the UK, Germany and Italy - penetration hit only 13 per cent to 15 per cent of homes at the end of 2003, or about half the level of smaller countries with more dynamic telecoms markets.

This thesis echoes a recent OECD report, which called for governments to promote competition, rather than use subsidies, to boost the growth of broadband in rural and remote areas. The OECD says that simply forcing operators to offer services in remote areas will reduce competition and innovation and could also mean users will end up paying more for an inferior service.

"Europe's smaller countries have demonstrated that loosening the grip of the incumbent telcos is critical to faster, wider broadband adoption," said Mercer.

The Strategy Analytics report also claims that the "triple play" of Internet, telephony and video from a single provider will become increasingly important as the European broadband market evolves.

© ENN

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