High definition television is set to become a mass-market item rather than just a high-end item, although it is still many years away from replacing standard definition television as the dominant format for television viewing.

In many countries HDTV is being used by pay-television operators to gain market share and enhance revenues by differentiating their services from those of their rivals.

In particular, satellite and cable operators are best positioned to exploit the format which requires up to four times the bandwidth of standard definition channels. This will likely increase the competitive advantage over digital-terrestrial television which lacks the capacity needed to provide extensive HDTV offerings.

HDTV’s emergence as a serious consumer proposition – initially in the USA and Japan and now in Europe – has been a long time coming. The first HDTV services were launched back in the early 1990s in analogue format. The amount of bandwidth needed to deliver high definition images meant that it was not until the advent of digital broadcasting and video compression that HDTV really became viable. Even so, it has taken time to start being popular. For instance, the UK’s BSkyB has around 600,000 HD subscribers (about six per cent of its customer base) more than 10 years after launching digital satellite television. Across the Channel, the long-established established Canal+ has a comparable number, representing about 10 percent of its subscribers.

According to estimates from researchers Informa Telecoms & Media, only four percent of global television homes were watching programmes in HD at the end of 2008, a proportion which it reckons will rise to 16 per cent by 2012 (although many more homes will have equipment capable of displaying high definition images).

Only in North America is the 2012 proportion expected to be above 50 percent. All in all, researchers suggest that there will be just under 180 million active HDTV homes around the world by the end of 2012.

Business models

As might be expected with an emerging product, different business models are being tested. The most popular so far appears to be that of selling a package of HD channels as a premium service on top of conventional, standard definition subscriptions.

Often HD is offered together with an operator’s latest generation of digital video recorder (DVR) as a product sitting above existing premium packages. This approach has been adopted by BSkyB and Spain’s Digital Plus among others. In the former case, take-up has been stimulated partly by subsidising the cost of set-top boxes. Another approach is to bundle HD channels with existing packages. This strategy is adopted by pay-TV operators keen to build early market share for the HD offering and to establish a clear lead over rivals.

HDTV is not the sole preserve of the pay-television groups. In the UK, the BBC and ITV are using HDTV to drive Freesat, their new free-to-air satellite service, while France launched five channels – simulcasts of the main national broadcasters – in HD on its DTT platform at the end of October 2008.

On DTT, the UK has come up with a radical approach. It is using MPEG-4 compression with the new DVB-T2 transmission standard to maximise the number of HD channels. Even so, the total is unlikely to exceed four which seems minute compared to what can be offered via cable or satellite. BSkyB, for instance, already has 28 high definition channels.

Global acceptance

In global terms, European take-up of HDTV lags behind the USA and is on more or less level-pegging with the Asia-Pacific region where Japan leads the field. This is not particularly surprising given its citizens’ love of new consumer electronics and its wealth of consumer-electronics manufacturers.

For most European countries the advantage that HDTV delivers in terms of picture quality over standard definition is significant and this is the main stimulus to encourage purchasing. In the USA, however, the quality differences between the old and the new are much greater.

As Informa comments: “HD take-up has been highest in North America, partly due to falling equipment prices and greater content availability but also because the picture and audio quality of standard definition (SD) programming is poor.”

Given the old joke that the US television standard NTSC stood for “never twice the same color,” one can understand the impetus behind an early transition to high definition television.

Production costs

The cost of producing television programmes in HDTV has been falling rapidly over the last few years and is now only marginally more expensive than producing shows in standard definition format. But because of the additional bandwidth required, transmitting HD programmes remains around three times as expensive as the comparable costs for standard definition channels.

Three genres of programming stand out as benefitting most from being shown in HDTV – the sports and film channels that are the staple of premium pay-television operations and the kind of natural history programmes made by the BBC, Discovery and National Geographic. In contrast, HDTV adds little value to news, chat shows and other studio-based content.

Sport had been used by broadcasters and platform operators as a way to attract viewers to HDTV and kick-start high definition services. The Olympic Games in Beijing in Summer 2008 provided such a stimulus in a number of markets.

Consumer confusion

While millions of television sets might be able to display HDTV signals the vast majority are still used only to show standard definition TV.

The use of terms such as “HD Ready” has confused some consumers who wrongly believe that they already have HD. While about 40 percent of the world’s digital-TV homes now have television sets able to display HDTV, only about 15 per cent in fact have high definition television.

As HDTV becomes a mass-market proposition and gradually replaces standard definition television as the norm – a process likely to take well into the next decade, if not beyond – the next generation of products are already appearing on the horizon.

Three-dimensional television (3D TV), in which the illusion of a three-dimensional image is created, might sound radically different from television as we know it, but can be seen as an incremental advance on HDTV.

In December 2008 BSkyB staged a demonstration of a·3D TV product, where two HDTV cameras mounted close to each other are used to create the 3D effect, with different pictures sent to viewers’ right and left eyes. While BSkyB is still working out when to launch a service, French telco France Télécom has announced plans to offer football in 3D over its ADSL network during 2009. Both operators will use a format that requires viewers to don special glasses in order to see the pictures in three dimensions.

The BSkyB demonstration used a 3D television set from Hyundai which went on sale in Japan in April 2008. How serious this service turns out to be remains to be seen.

Beyond that is the prospect of “Ultra HD” which is now being developed by NHK, the Japanese broadcasting pioneer which was developing HDTV back in the 1960s. Ultra TV will offer picture quality with four times the resolution of today’s HD signals.

But there’s no need to rush out to buy this product which is still in the R&D phase. NHK reckons it will be ready to hit the shelves in … 2025.

For more information:

Informa