27 Aug 2003 | The Media Leader Staff

DTV Equipment Costs To Fall Below £30 By 2007, Says Report

The cost of digital TV set-top box equipment could fall as low as â‚Ź36 (£27) by 2007, as fierce competition in the supplier market continues to drive down prices, according to a new report from Strategy Analytics.

Demand for digital terrestrial TV (DTT) services is starting to look much stronger in Europe, with the UK’s Freeview being a notable success. Strategy Analytics predicts that there will be 3.7 million European homes taking DTT services by the end of this year. This is twice the size of the DTT sector at the beginning of 2003.

This demand is being driven partly by the falling cost of equipment. As set-top box prices are pushed down by competition, the report advises manufacturers to develop multi-platform and combination products, such as personal video recorders (PVRs) and DVD recorders, in order to sustain revenue growth.

DTT Set-Top Box Retail Price Forecasts

	2003	2004	2005	2006	2007
Euros	84.00	63.00	50.40	42.84	36.41
GBP	61.35	46.01	36.81	31.29	26.60
*Source: Strategy Analytics, August 2003*

“Prices like these could change the economics of the digital transition,” says David Mercer, principal analyst at Strategy Analytics. “Governments around the world are keen to recover analogue spectrum, but they should also note that substantial public subsidies will still be required in order to encourage universal digital adoption.”

An earlier report from Strategy Analytics forecast that the European set-top box market will generate revenues of $7.1 billion (â‚Ź6.2 billion) by 2008, with growth emerging particularly from the strong uptake of free-to-air terrestrial services like Freeview (see Digital TV Equipment To See Growth Recovery In Europe).