Broadband will hurt broadcasters

[Akasha]

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," Mercer 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 pointed 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.

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

Broadband marches on

Meanwhile, a separate report from Strategy Analytics claimed that Europe will have 33.5 million broadband subscribers by the end of this year, representing 20 percent of all homes. By 2008, the figure will be 41 percent, with numbers going as high as 60 percent in places like Sweden, Switzerland and Belgium, where there are strong competitors to incumbent telecoms.

Indeed, Strategy Analytics indicated that healthy competition is the key to broadband growth and pointed out that in markets where an incumbent dominates -- such as the UK, Germany and Italy -- penetration hit only 13 percent to 15 percent of homes at the end of 2003, or about half the level of smaller counties with more dynamic telecoms markets such as Belgium, the Netherlands and Denmark.

That theory echoes an OECD report released weeks ago, which said that governments should promote competition instead of subsidies to boost the growth of broadband in rural and remote areas. The OECD said 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.

Information Source : ElectricNews.net