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Momentum for HDTV is now building. Broadcasters have announced definite deployment plans and the consumer electronics industry is a-buzz over this new market. Some observers said that HDTV would never come to the European market, but this year it has arrived and James Healey, Datamonitor's senior media and broadcasting technologies analyst, says that it is here to stay...

New Datamonitor research forecasts that there will be 4.6 million high-definition TV (HDTV) households in Europe by 2008, up from 50,000 at the end of 2003. Germany, the UK and France will lead the European rollout. In the beginning high prices will hinder sales but those who do buy will be in the top-tier of the ABC1 advertising super-group, with large disposable incomes.

HDTV - the cinema show at home

The most accurate comparison to HDTV is the introduction of the simple color TV in the 1950s in America. The similarities are striking: the picture quality was noticeably superior to the old generation of black and white TVs, there was little color content initially and the prices were sky high. The first TV, produced by RCA, cost $1,000. It is estimated only 1,000 were sold in the first year (1956). Even by 1964, penetration had climbed to only 3 per cent. Color TVs cost $500-1,200, while black and white versions retailed for $150-300.

Today, it's HDTV. Already being broadcast in the US, Australia, Japan, Canada and South Korea, European consumers will be able to benefit from improved picture clarity and surround sound like at the movies (referred to as 5.1 in technical terms). HDTV introduces new terms: 720p and 1080i. Televisions in Europe today display 576 lines, but HD video increases this line count (thus the improved picture quality) to either 720 or 1080 (depending which standard is selected by the broadcaster).

Sky in the UK and M6, TPS and TF1 in France have all recently announced plans to offer HD content to viewers - TPS should launch services in 2005 and Sky in 2006. In fact, the French terrestrial channels had asked the French government to permit HDTV on the digital terrestrial television network that will launch next year - although that request has been rejected. The BBC has plans to produce all of its content in HD by 2010.

Datamonitor expects Germany, the UK and France to lead the adoption of HDTV, with Italy a distant fourth. Although HDTV is currently still a nascent market, 20 years from now all of Europe will broadcast television only in HD.

Consumers will find adoption confusing

To watch/record HD content, consumers will have to upgrade their home entertainment systems (a new television, set-top box, VCR, PVR/DVD recorder etc). Despite the best-laid plans of manufacturers and broadcasters, and (undoubtedly) a massive marketing campaign, many consumers will be confused by the competing technologies.

The only certain result is that there will be headline stories of consumers unintentionally buying expensive televisions that are not truly HD-ready. It happens in the US and it will happen in Europe. Educating the consumer is critical to ensuring the technology upgrade occurs as smoothly as possible.

Although televisions remain high priced, and few operators are ready for HD broadcasts, momentum for the introduction of HDTV in Europe is unstoppable. Consumer electronics manufacturers are already selling HDTVs - Sony even has large displays in 180 retail stores across Europe promoting the superior picture quality - and broadcasters are beginning to record content in HD. While take-up rates will remain low until the end of this decade due to the high cost for both the consumer and the broadcaster, HDTV is here today and it is here to stay.

Source: ComputerWire/Datamonitor Related research: Datamonitor, "MarketWatch: Technology Annual Subscription"

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