Digital television (DTV) adoption will show strong growth over the next 2 years as consumers demand enhanced features, greater breadth of content and bundled communications offerings. According to a new report, a further key driver in the transition to DTV services is the switch-off of analog transmission in the US and Western Europe. With the US analog switch-off date mandated for February 2009, and most Western European countries terminating transmission before the 2012 deadline, the next 2 years will see a rapid increase in new digital TV households.

DTV will grow an average of 12% year-on-year, with particularly strong adoption in the near term as broadcasters terminate analog terrestrial television. In 2007 there were 158 million households using digital television services in Western Europe and the US. By 2012, the report expects there to be an estimated 274 million digital TV households in these regions.

For most national markets, the significant increase in DTV services will occur around 12 to 24 months prior to analog signal termination. Driven by campaigns from national regulatory authorities and public service broadcasters, there will be a massive push to migrate consumers to digital platforms to free up valuable spectrum capacity.

The television sector is evolving. Consumers face an ever-increasing array of entertainment channels and options from which to obtain video content, resulting in growing pressure on traditional service operators to reduce churn.

Pay-TV platforms – such as cable, satellite, and IPTV – are facing new challenges to ensure that their services remain compelling and attractive. For many service operators, this challenge is growing increasingly pertinent as non-traditional competitors enter into the marketplace.

A primary strategy to customer retention will be through the provision of new services including interactive features and the bundling of alternative communications services such as data and voice. Furthermore, as customers grow accustomed to accessing online content whenever they wish, video on-demand services will become a ‘must-have’ for operators. As a whole, Datamonitor expects DTV services to illustrate strong growth as customers demand, and are willing to pay for, new services and analog switch-off drives digital migration.

Related research: Western European and US Digital TV Adoption