Governments urged to ‘stop pushing flawed Digital Terrestrial TV’

New report warns that making money from digital terrestrial TV is like "trying to milk a stone."

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By  Marcus Webb Published  October 6, 2002

In a damning report published today, Forrester Research urged governments to stop forcing digital terrestrial TV (DTT) on consumers and instead allow market forces and commercial providers of cable and satellite services to dictate the speed of digital take-up.

"Compared with cable and satellite, the limitations of DTT have always been known, but not acknowledged,” claims Forrester analyst Hellen K. Omwando. “Basically, free or cheap DTT lacks an operator business model. Interactivity is far too costly to help DTT retain customers; no one will be able to afford DTT mobility; and most importantly, a forced analogue switch-off will create consumer uproar."

Earlier this year, Forrester forecast digital terrestrial TV would be available in just 11 percent of European households by 2007. But now warns that even this modest forecast may turn out to be “optimistic because making money from DTT looks impossible, and forcing consumers to take it up just won't work.” Instead, Forrester argues that European governments should recall digital audio broadcasting (DAB) - another technology that has never found its market - and stop pushing DTT.

"Governments simply cannot justify funding DTT and bringing unfair competition into a market where highly leveraged commercial operators like Canal Satellite are struggling to survive," says Omwando. "Just as the average price of DVD players has dropped by 70 per cent in the past five years, set-top box prices will fall in the next few years. This in itself will spur consumer adoption of digital TV."

The report, entitled Digital Terrestrial TV Won't Bear Fruit, concludes "making money from digital terrestrial looks as hard as milking a stone and forcing consumers to take it just won't work."

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