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German HD channels shut down: Is Europe’s HDTV in trouble?

by User Not Found | Feb 14, 2008

ProSiebenSat1, one of Germany's leading commercial television broadcasters, will close its two free-to-air HDTV channels (ProSieben and Sat1) from tomorrow morning, 15th February. Instead the company will focus on increasing the availability of its 16:9 SD broadcasts. This shows, if nothing else, that the German market has some way to go to catch up with other countries, where 16:9 has been established for some years, and that HD may be a step too far, too soon. ProSiebenSat1 was one of the first broadcasters in Europe to take the plunge with free-to-air HDTV. Germany's TV market is characterised by the continued dominance of free-to-air broadcasting and the weakness of pay TV, relative to other European countries at least, and is often seen as being fundamentally different to other markets. So FTA HDTV may have seemed a natural development in Germany while other countries concentrate on pay HDTV services. But ProSiebenSat1's decision suggests that the laws of economics apply in German broadcasting as much as anywhere else. The fact is that in the early days of any new platform the audience is going to be tiny. HDTV requires users to buy or rent new set-top boxes, so a significant audience will only begin to emerge after some time. Any broadcaster believing that an HD channel can survive on advertising revenues alone in the early days is relying on wishful thinking rather than a sound business plan. Strategy Analytics' European HDTV scenario has always called for initial market leadership from the pay TV providers to establish the technology platform in the first few years, as indeed Sky is doing in the UK, using subscription payments as the primary business model. Public broadcasters will also find it difficult to participate initially because of lack of funding, although the BBC and others do have limited initiatives already in place. Wider availability of FTA channels will have to wait until the audience capable of receiving HD signals has expanded significantly from today's 1% of European homes. Client Reading: Europe's High Definition Homes: High Definition TV and Video Devices Forecast Add to Technorati Favorites
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