By Simon Bond

     With its head start in digital television broadcasting, the U.K. should be the world's largest market for the interactive digital TV sets-- iDTVs--to receive these new channels. 
    Yet barely 100,000 units were sold in the U.K. last year, and this number will struggle to double again this year. 
    Meanwhile, the market for regular analog TV sets remains buoyant, with close to five million selling each year.
    For digital broadcasters like ONdigital, the pay TV network, these figures are frustrating. 
    This company's precarious finances could be transformed by the mass adoption of iDTVs, which have built-in decoders so that no extra set-top box is needed to receive digital programs. 
    ONdigital has been forced to follow the lead of Rupert Murdoch's BSkyB and give away its set-top boxes. The free box costs ONdigital close to $300 a customer; if it could end the giveaway, ONdigital's cost per customer would be less than $50.
    With demand so weak, leading manufacturers like Sony, Philips, Grundig and Bush pay little more than lip service to iDTVs as the future of home entertainment, and they invest little in their development or promotion.
    IDTV sets offer high-definition images, which in terms of clarity, contrast and detail are significantly better than their analog counterparts. Viewers also have access to many more channels.
    However, iDTVs cost some $300 more than a conventional analog set.
    Furthermore, the latest innovations are cheaper to introduce through set-top box technology than through integration into a new set. So the analog set/set-top box combination represents equivalent quality at a lower price, with a measure of future-proofing--that is until analog broadcasting can be turned off.
    The government could stimulate the digital market overnight by confirming a date for switching off the analog signal. 
    Politicians want to free the part of the radio spectrum that analog TV uses and to promote new services, but they remain coy about committing to an exact date. 
    Some time between 2006 and 2010 is favored, though few in the industry believe even the later date is feasible.
    A recent survey by the Consumers Association found that two-thirds of the population remain unaware of the government's intentions. With no sense of urgency, people replacing their sets feel no pressure to take the digital option.
   However, while the TV set manufacturers and digital broadcasters both accept that the campaign to establish iDTVs has failed so far, there are now signs of change. The government recently created a new scheme to label iDTVs with a "DVB" quality logo to promote consumer confidence. 
   The Digital Television Group, an industry lobby, has persuaded manufacturers to start working with each other and with broadcasters in order to adopt a clearer message for consumers.
    These are important first steps, but consumer understanding, let alone confidence, in digital TV sets will take more time to build. With the average British consumer retaining a TV set for around seven-and-a-half years before replacing it, this is a market that requires patience.  

May 14, 2001 © 2001 Media Life

-Simon Bond covers European media for Media Life, writing from outside of London.

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