Digital TV content can be delivered in five ways: satellite (BSkyB), digital terrestrial (Freeview), cable (NTL / Telewest), TV over ADSL (via the telephone line…Homechoice) or via the internet (Internet Video and IP (Internet Protocol) TV). The main advantage of digital TV is that it enables much higher volumes of information to be delivered with reduced bandwidth. This enables BSkyB, for example, to deliver over 500 channels along with interactive services. NTL / Telewest and Homechoice now offer on-demand programming.

Curent Penetration:
18.3 million or 73% of homes (Ofcom, June 2006). The fastest areas of growth are TV over ADSL (Homechoice) although this is from a very low base, and Freeview.

Predicted Penetration:
Carat currently estimate that over 80% of all homes will be digital by 2010 and the government has put in place a timetable for the switch-off of the analogue terrestrial system by 2012 (Digital Switchover), at this point 98.5% of all homes should be able to receive digital TV by some method.

Implications for advertisers:

• Reduced viewing of the original five channels (BBC1, BBC2, ITV, C4 and five) as greater channel choice will fragment viewing further.

• Reduced opportunity to target mass audiences of 5 – 10 million in one go through TV spot advertising. Coverage and rates of cover build will gradually be eroded, while frequency levels will increase.

• Demand for cover building ‘event’ programming may increase pushing up costs.

• On-demand programming is a threat to DVD rental and the consumption of DVD’s of TV series in particular.

But there are also some positives:

• Digital TV provides a greater opportunity to reach niche audiences through closely targeted airtime.

• The expansion of interactive TV and other TV based services such as home shopping.

Latest Research

The TV section of Carat’s Connection Study 2007 (sample size 14,000+ GB adults) includes a question about the use of interactive TV. Respondents were asked whether they have ever done or have done in the past month, a range of both commercial and non-commercial (like watching player-cam) interactive activities.

Of those with Digital TV in the home, 61% claim to have ever used the red button, whilst 37% claim to have done so in the past month.

Those who live in Sky homes ( 41% in past month) do so more than those who have cable ( 36% ) or freeview ( 31% ).