Telcos entering TV market could further accelerate digital TV rollout: Decima

Telcos entering the TV distribution sphere should further drive the rollout of digital TV, even as satellite TV and digital cable continued to accelerate the digital transition in the second quarter of 2005, according to Decima Research VP of broadcast/media research Mario Mota. Mota has revised upwards his previous digital TV subscriber estimates, predicting that there will be 5.1 million digital TV subscribers in Canada by the end of 2005, and 5.9 million by the end of 2006. If the 5.1 million figure is reached by year-end, it will mean that the number of digital TV subscribers in the country will have surpassed the number of analog TV subscribers several months sooner than Mota originally predicted earlier this year. He attributes the faster pace of growth to cablecos aggressively converting their analog TV customers to digital, and a more than doubling of the number of subscribers acquired by all-digital satellite TV operator Bell ExpressVu in the second quarter of 2005 compared to the same quarter last year. The overall number of digital subscribers increased by an estimated 178,000, or 4%, in the second quarter (February/March to May/June), compared to 132,000, or 3%, during the same period a year earlier. There were almost 4.7 million digital TV subscribers in Canada at May/June 2005, according to the latest edition of Decima Research’s THE DIGITAL DOMAIN report that tracks digital TV subscriber growth. A push by telcos to enter the broadcast field with all-digital Internet Protocol TV (IPTV) – with TELUS Corp. recently rolling out its TV service, and Bell Canada expected to sometime next year – could spark an even quicker conversion. "Generally, the more players you have competing in the marketplace – spending marketing dollars and educating consumers about the benefits of digital TV – the more it will result in a net benefit in terms of growth of the digital TV subscriber universe, because consumers are more educated and more aware. More offerings and more choice in the market might cause some of those laggard analog TV subscribers to take a look at some of the options out there, and potentially subscribe," Mota says. "Certainly, you cannot underestimate the ability of the telcos to compete in this market because they are big players with deep pockets, and they have attractive bundled offerings and a very strong reputation and history with their customers. So they are in a good position to capitalize on extending another service such as digital TV to their customers." Currently, the telcos only account for 2% of the overall digital TV market, but Mota estimates that will increase to 3% by the end of 2006. "If you look at the numbers today, the telco TV providers as a whole make up a small proportion of the total digital TV market across the country," Mota says. "But they are certainly making a dent. MTS has just surpassed 50,000 subscribers in Winnipeg and SaskTel has close to 40,000 subscribers. TELUS TV is now rolling out its service neighbourhood by neighbourhood in Calgary and Edmonton (CCR, Nov. 18/04) and Aliant is rolling out its TV service in a few neighbourhoods in Halifax. The telcos are certainly going to be a contender for subscribers going forward." Mota predicts that the telcos’ IPTV services, satellite TV, and wireless cable combined could eventually account for 35% to 40% of the entire TV universe – both digital and analog combined. Today, they have about 25% of the market. "If you take the MTS experience in Winnipeg, for example, MTS has passed 20% penetration in that market in about three years – that’s pretty significant," he notes. "And that’s why you’re seeing the cablecos aggressively entering the telephone business because it’s a way to kind of have those subscribers cancel each other out. The cablecos may be losing some cable subscribers but they will be gaining some subscribers on the telephone side."

Telcos entering TV market could further accelerate digital TV rollout: Decima

Broadcast | November 29, 2005

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