News | July 8, 1999

Report Says Growth Rate for New DTV Set Sales Will Lag Behind Worldwide Digital Broadcast Services Over Next 5 Years

By: Tom Butts

While a new report from Allied Business Intelligence Inc. (ABI), an Oyster Bay, NY-based research firm predicts a healthy growth rate for worldwide digital broadcast services—including satellite, cable, and terrestrial—over the next five years, it paints a somewhat gloomy picture of DTV set sales over the same period.

The report, entitled "Digital Broadcast 99—Worldwide Market for Digital Broadcast Systems and Equipment," estimates that digital services will grow 43% annually worldwide from 1999 to 2005.

ABI estimates that there are 1.5 billion TV sets worldwide and 250 million TV sets in the US alone. By the end of this year, DTV sets capable of receiving digital broadcasting services will comprise 2.5% of all the sets worldwide. This penetration rate will rise to 21% by year-end 2005, according to ABI. The growth picture for sales of new DTV sets is even more pessimistic—the report estimates that only 15% of all new TV set sales in 2005 will be digital.

ABI points to the usual suspects in the staggered transition to digital—lack of content, cost, signal reception, and compatibility.

The research firm says current digital growth has been spurred by the emergence of the PC/TV, creating an ever-widening audience for new services. Entertainment will attract the majority of subscribers, and real video-on-demand—when it arrives—will be a major source of income for broadcasters.

Global DTV and set-top box sales will rise in 2003, igniting a sharp annual growth rate of 121% for digital terrestrial services and a penetration of 5.2% of all TV households over the next five years, ABI says. Digital satellite will have the largest number of worldwide digital subscribers in 2005 with 94.7 million.

In the US, the current penetration rate of 16% for digital services for all TV households primarily stems from DBS subscribers. ABI forecasts that the total US digital services penetration rate will increase to 60% by 2005.

The most active digital broadcast regions are North America and Europe, with 92% of all digital subscribers. In these two regions, the US and the UK have deployed more digital satellite, digital cable, and digital terrestrial services than all other nations.

ABI conducted 50 interviews with industry officials in the broadcast and cable markets as well as manufacturers, association and government officials in compiling data for the report.