Turning Digital

Horizontal Markets and New Business Models

The 5th Annual Report by ITMedia Consulting to be released on June, 26

As every year, ITMedia Consulting, sketches a picture of the DTV market, reporting whatever has happened in the recently ended year, and analyses actual trends.

In 2006 the European television market grew by 6.2% as a whole, against +7.4% in 2005, thus accounting for nearly € 80 billion.

Advertising confirms the trend of the previous year, growing by 3.4%, slightly more than in 2005, and collecting more than €36 billion. TV advertising has been stagnating and losing importance, if compared with the achievement of subscriptions revenues.

Pay TV is still the driver of the market, reporting a growth of 12.7%, and reaching €29.5 billion. Pay-TV penetration is still rising, and now 30% of households in Western Europe subscribe to a premium offer.

However, leading cable and satellite pay TV providers, relying on the classical premium pay TV model, are facing tougher market conditions in which to grow their subscriber bases, due to the multiplication of networks and delivering chances, and to the expansion of rich FTA DTT offers and the launch of several IPTV services.

Penetration of digital TV grew at a fast pace: at the end of 2006 there were 67.9 million digital TV households in Western Europe, thus reaching nearly a 41% of European TV households. The Netherlands completed the switch off in December 2006.

New platforms such as digital cable, ADSL, FTTH and mobile networks are now fully operative. At the end of 2006, there were 6 commercial mobile TV services running, with 450 000 users as a whole.

Audience fragmentation is getting more and more evident every year. Multichannel audience share, although split among a great deal of small channels, is constantly increasing. This also affects the advertising market. Now it is the Internet that is imposing itself everywhere as a major media. According to ITMedia Consulting, in 2006, internet advertising spending in Western Europe amounted to nearly €6 billion.

ITMedia Consulting is a leading, independent research and consulting firm in the framework of digital economics.

Every year ITMedia Consulting publishes a multi-client research exploring the hot topics in digital communications.
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