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Digital Broadcasting Market Report 2005
Key Note Publications Ltd, Nov 2005


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The technology behind digital broadcasting is well established in the UK, but 2004 and 2005 saw a surge in the uptake of multichannel television services such as Sky Digital and Freeview. Sales of equipment capable of receiving digital radio broadcasts have also increased rapidly, although digital radio still has a much lower penetration level than digital television.

There are three main ways to receive digital television broadcasts in the UK: satellite, digital terrestrial and cable. British Sky Broadcasting (BSkyB), the dominant satellite broadcaster (with its Sky Digital service), is controlled by Rupert Murdoch's News Corporation, while the digital terrestrial operator Freeview is run by a consortium including BSkyB, the BBC and other terrestrial television broadcasters. In October 2005, the two dominant cable operators, NTL and Telewest, announced that they had agreed to merge.

The cable merger, and the need for a consortium behind Freeview, are part of a trend towards consolidation that also saw the creation, in 2003, of ITV PLC, a single franchise holder for all the ITV regions across England and Wales. A similar consolidation process has been taking place in radio, with examples including the creation of GCap Media (the owner of Capital Radio, Classic FM and over 100 digital stations) in 2005.

This consolidation reflects the development of new rivals for conventional television and radio, with home computers and mobile phones competing to provide consumers with information and entertainment. Broadcasters are being forced to experiment with different platforms in order to attract customers and — crucially — advertisers. (The BBC continues to be funded publicly through the compulsory Licence Fee for all owners of TV sets.)

In 2005, the Government announced a timetable that will see all analogue television broadcasts in the UK cease by 2012. At the same time, the Department for Culture, Media and Sport is continuing to create new digital radio licences. The broadcasting regulator, Ofcom, estimated that more than 60% of UK households were able to receive digital television by mid-2005, and that figure is expected to rise to more than 90% of households by 2012.


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