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Daily News

DTT Revolution Put on Hold
Dec 5, 2002
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The outlook for the Digital Terrestrial TV (DTT) set top box (STB) market is not as rosy as once thought, according to In-Stat/MDR. The high-tech market research firm reports, that with ITV Digital (formerly OnDigital) in the UK, and Quiero TV in Spain going out of business, other Pay-TV operators postponing the introduction of their DTT services, and the slowing of deployment schedules due to the weakening global economy, a market that was once expected to generate U.S. $2.4 Billion in revenue in 2005, will top a mere $1.4 billion in 2006. The value of semiconductors in DTT STBs will just barely top $500 million during 2006.

DTT broadcasting is the next generation of over-the-airwaves television signal that is expected to replace today's analog terrestrial television service.Governments are anxious to turn off their analog TV signals, and auction the spectrum space to mobile communications carriers and TV set manufacturers and set top box designers are anxious to replace billions of old TV sets with new, digital, products, creating an enormous market. Someday, says the research firm, DTT STBs will out-sell digital cable or digital satellite products.

However, it adds, the obstacles facing DTT are manifold. In the U.S., nobody knows if the transmission and reception technology will work in massive deployments. There is tremendous energy going into innovative DTT set top boxes, and semiconductor vendors are evolving their chips to support advanced features such as Personal Video Recorders, interactive e-commerce, and data casting services. But consumers won't buy the boxes unless they feel they get a unique value from it. Television networks need to figure out how to migrate their programming and services onto new, digital, platforms, or consumers will just keep their old, analog TV and thwart the DTT revolution. All eyes are on the UK, because the BBC and their partners have re-launched their DVB-T Freeview digital service.

In-Stat/MDR also found that:
· DTT STBs will ship in smaller volumes than either digital cable or digital satellite boxes through at least 2006. Long term, DTT will eventually surpass cable or satellite box shipments.
· Europe is evolving DVB-T into a free-to-air service, expanding the market, but it will take a longer time to develop. The UK deployment of Freeview will help tell this tale in the near term.
· The U.S. is mandating ATSC receivers into all new TV sets, which will impact the viability of DTT set top boxes, but nobody knows if all consumers who buy a DTT-equipped TV will reliably receive the signal.
· Asia holds the most promise for DTT set top boxes. However, the Asian market for DTT set top boxes will only begin developing after 2005, and will not have major impact until late in the decade.

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