Set-top freebies are key to sales

Set-top freebies are key to sales
Melanie Reynolds The announcement of free set-top boxes by the leading digital TV players is a key development spurring the uptake of the technology. So claims Strategy Analytics which predicts that just over half – or over 12 million – of UK households will adopt the technology in the next five years. It predicts set-top box sales will be 1.3 million this year and reach just under three million a year by 2005. BSkyB’s deal from June is for a free digital set-top box which will be installed for a fee of ?40. ONdigital will be giving away boxes to new subscribers when they buy a TV worth at least ?199 in May. It said that other competitive offers would be made in the following months. Digital cable TV operator Cable & Wireless Communications, which has just announced launch dates for its service, described the moves by BSkyB as “defensive”. The monthly fee it charges includes all equipment and programmes. David Mercer, an analyst at Strategy Analytics, believes that satellite digital TV is romping ahead of the competition. Despite the extra services that cable can offer like interactivity and Internet, it is falling behind its already launched rivals. “There probably are people prepared to wait for an advanced cable service, but they won’t want to wait too long,” said Mercer. “As far as terrestrial is concerned it’s looking very difficult and frankly the pressure is on.” Mercer believes more consolidation is needed in the cable industry to allow it to compete effectively and sees this fast approaching. BSkyB has set aside ?315m to cover the cost of the promotion which Mercer says the subscription revenues show it can afford to do in the long term. He is less convinced that ONdigital can afford to do the same.


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