Terrestrial dTV Profit Like ‘Milking a Stone’, Says Report

08 October 2002

US-headquartered Forrester Research announced Monday that making an honest buck or three from digital terrestrial TV is like “trying to milk a stone” – an opinion that will gladden the hearts of satellite and cable operators the world over, and cause some cynics to wonder why Forrester chose this moment to do its oracle act.

Clearly, it has nothing to do with the imminent launch in the UK of terrestrial dTV platform Freeview, backed morally by the British government and financially by the BBC’s hard-nosed director general Greg Dyke along with that well-known exponent of market forces Rupert Murdoch, whose BSkyB is partnering the BBC in the venture [WAMN: 04-Oct-02].

Forrester report Digital Terrestrial TV Won't Bear Fruit surveys the European dTV scene and concludes: “Making money from digital terrestrial looks as hard as milking a stone and forcing consumers to take it just won't work” – an opinion that can be based solely on speculation as the thesis has yet to be put to the test.

Instead, argues the report, European governments (and doubtless America’s FCC too) should “allow market forces and commercial providers of cable and satellite services to dictate the speed of digital take-up”.

Curiously Forrester does not cite in support of its thesis the US-owned UK cable ventures NTL and Telewest – both of which have veered close to collapse through massive debt burdens and cashflow crises.

The researcher does however, cite the example of two European failures – ITV Digital in Britain and the Quiero Television digital network in Spain. But dispassionate onlookers know that one of these failed as a result of expensive acquisitions and the other through management ineptitude.

Earlier this year, Forrester’s clouded crystal ball forecast that terrestrial dTV would be available in just 11% of European households by 2007. It seems it got this wrong, as it now claims that even this modest prediction is optimistic given the collapse of ITVd and Quiero.

It has yet to factor-in its guesses as to the outcome of the BBC/BSkyB Freeview venture.

Data sourced from: MediaGuardian.co.uk; additional content by WARC staff