New Report: Free European DTT Resilient Against Recession

LONDON, December 17: Free-to-air digital terrestrial TV in Europe will be least affected by the global economic downturn, according to new 2009 forecasts from research firm Screen Digest.Surveying the impact of the recession on Europe's media markets, the research notes that growth prospects for the region's DTT players are tied to the transition to digital—not to the economy. Screen Digest also predicts that Eastern European pay-TV markets will experience consolidation in the wake of the downturn.Elsewhere in the region, the British pay-TV market will be comparatively resilient, the report notes, with Sky expected to maintain its subscriber growth, control churn and maintain ARPU. Operators in Spain, France, Italy and Germany will be less fortunate, the research notes.

The home-video market is expected to stay strong as consumers look to cut costs by staying in. However, margins are falling, and Screen Digest cites the impending closure of Woolworths, which accounted for almost 9 percent of DVD sales in 2007. EUK, the largest DVD wholesaler in the U.K. and a sister company of Woolworths, is also closing this year. Nonetheless, 10.2 billion euros will be spent by consumers on DVDs this year. This will drop to 5.6 billion euros by 2012 as a result of the transition to Blu-ray. The take up of Blu-ray will, however, slow in Europe due to the downturn. "Many European consumers who might have upgraded their home-entertainment system will now defer their decision so the shift to Blu-ray will take longer than previously anticipated," said Helen Davis Jayalath, the head of video at Screen Digest. "They will, however continue to buy DVDs, safe in the knowledge that [Blu-ray's] backward compatibility means that they won't become obsolete. But the delay in [Blu-ray] adoption and the availability in the short term of high numbers of surplus EUK and Woolworths DVD stock mean it will take longer for consumer spending to return to growth.

"Screen Digest also reports that the mobile entertainment landscape will be increasingly dominated by free content. Ronan de Renesse, the head of mobile, said: "Content providers will be looking at application stores such as Apple's App Store and Google's Android Market to compensate for the loss they will make on mobile operators portals. The economic downturn will push operators to release their grasp on the mobile content industry and open-up mobile Internet. So against all odds, 2009 will turn out to become the most successful year for mobile content so far."