Turning the zeroes into ones

Following the collapse of ITV Digital in March, growth in digital television viewing appears to have come to a grinding halt. Although the number of adult digital viewers in the UK now stands at over 19 million – an increase of more than 30 per cent in the past 12 months – almost all of the growth occurred before March this year. New research from MORI suggests that this could be a setback to the Government’s plans to switch off the analogue TV signal some time between 2006 and 2010.

According to MORI, it has become increasingly difficult to project future rates of uptake, particularly since the collapse of ITV Digital. In recent work commissioned by the Department of Culture, Media and Sport, MORI explored this in detail.

In addition to the 43 per cent of UK adults who now have digital TV, a further 20 per cent expect to switch from analogue to digital by the end of 2007. Even assuming these people do make the switch, less than two-thirds of the population will have digital access by 2007. Indeed, this may prove to be an optimistic forecast, as it relies upon the recent dip in uptake being a short-lived phenomenon. Of the remainder of the population, 26 per cent do not know when they will switch – or estimate that they will switch after 2007 – and 11 per cent say that they will “never switch”.

The general demographic profile of those likely to switch by the end of 2007 is broadly similar to that of existing digital viewers. However, those likely to switch tend to be slightly older than existing viewers and to come from higher social grades, indicating that the next phase of uptake may not come from the youthful early-adopters, but from slightly older and better-off households – those who have hitherto adopted a “wait-and-see” policy. Accessing a wider range of channels remains the key reason for switching for those who intend to do so soon. However, those who see themselves switching at some point further in the future regard it as an unavoidable imposition, rather than making a positive decision to switch.

Cost remains a prohibitive factor for many. Growing numbers of people cite the cost of subscribing, or “hidden charges” as a disadvantage of digital TV. Despite the launch of several free-to-air channels, a digital service is still associated with pay-TV. However, there are indications that consumers are identifying other drawbacks to the technology, for instance that households will need separate set-top boxes for each TV set and that watching one channel while video-taping another is not possible. In addition, the tendency of some set-top boxes to “freeze up” and the collapse of ITV Digital have left some viewers out of pocket.

There is a danger that, as familiarity with the technology grows, awareness of the benefits will be balanced by a growing awareness of problems associated with digital services.

Some interesting lessons can be learned by studying those who have subscribed to digital TV in the past, but have since cancelled their subscriptions. In 2001, less than one per cent of the population had done so, but this has now jumped to ten per cent. The chief reason cited for cancelling a subscription is cost, followed by poor programming and poor picture or sound quality. While the main short-term selling-point of digital TV is the number of channels available, these need to be of sufficient quality for viewers to continue to believe them worthy of the subscription fee. At the moment, it is clear that this is not always the case.

Both industry and the Government have their work cut out to ensure that the analogue switch-off can take place within the target timeframe. So how can those who say they are unlikely to adopt digital TV in the near future be persuaded to do so?

Predictably, the main incentive cited was lower cost. Free-to-view channels would also be an encouragement to almost one in seven respondents, while access to cheap set-top boxes without an attached subscription would appeal to one in eight. Yet accessing free-to-view channels has not, before now, been a driver for the switch to digital TV – the impact of the launch of Freeview will be an interesting phenomenon to track over time.

Even given every encouragement to switch, there remains a core of people who say that nothing could be done to make them switch sooner than they have to. Finding a way to persuade these viewers to switch is one of the greatest challenges for the sector before the analogue signal can disappear for good.

In order to achieve the target for switch-off, the Government and industry need to ensure the provision of a high-quality digital service, in terms of programmes, reception and interactive services. Only when this happens will viewers stop cancelling subscriptions and begin to act as advocates of the digital service, helping to drive uptake among those unlikely to switch before 2007.