Consumers Worldwide Are Hungry for Hi-Def

Dec 2, 2007  •  Post A Comment

Consumer interest in high-definition television is growing rapidly in international markets. That’s the conclusion of a recent study from SNL Kagan that found pay TV operators around the world are using hi-def services as a key marketing point as they battle each other in global television markets.

“In certain markets, hi-def is going to fuel an already hypercompetitive dynamic, so in places like France and the U.K., where cable and satellite and IPTV competition is strong, hi-def will be an important competitive differentiator,” said Ben Reneker, the SNL Kagan analyst who wrote the report examining HD trends in Australia, Brazil, Canada, France, Germany, Italy, Japan, Mexico, the United Kingdom and the United States.

The appetite for hi-def services internationally kicked into high gear in 2006 when many pay TV providers carried the soccer World Cup in hi-def. That sporting event is credited with jump-starting the demand for programming in the format.

In most markets, however, the number of channels available in hi-def is fairly limited because many international news organizations and entertainment channels are still in the process of transitioning to HD, Mr. Reneker said.

As a result, international operators are adding U.S. channels to their hi-def lineups. “We are seeing National Geographic and Discovery and Voom have some deployments in international markets,” he said.

Discovery offers hi-def services in 14 international markets. Discovery HD, the company’s international hi-def network, first launched in Korea in February 2005. Now Discovery HD is available in South Korea, Japan, Canada, Germany, Austria, Ireland, the U.K., Poland, the Netherlands, Sweden, Denmark, Norway, Finland and Singapore.

The Voom suite of hi-def channels is growing its international reach, too. By the end of the third quarter, Voom had sold hi-def content in 150 countries, including Singapore, the U.K. and China.

Overall, the top five markets for HD services worldwide are the U.S., Canada, France, Japan and the U.K. Only two of those markets, France and Canada, have hi-def penetration rates higher than 10% of TV homes today, Mr. Reneker said. However, by 2012, four of the five markets will have hi-def penetration that exceeds 50% of TV homes, he said.

To get there, multichannel providers will market hi-def services heavily in the coming year. “This means pay TV operators will deploy HD-enabled set-top boxes, and this is occurring within increasingly competitive environments,” Mr. Reneker said. “DVRs will also come into play, so hi-def DVRs and hi-def programming will become much more widely available.”

Mr. Reneker pointed to another trend. Within a few years, hi-def content will not be sequestered to a hi-def tier. Over time, hi-def channels will migrate into the regular tiers of channels. “Consumers will grow to expect this in the basic tier. It’ll become the norm,” he said. “It also means that the opportunity to grow becomes a little more complicated, but hi-def revenue won’t decline.”

In fact, the report found the 10 top hi-def markets will generate aggregate hi-def video service revenues greater than $1 billion in 2007, $11 billion by 2014 and $12 billion by 2016.
HD Report


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