No one can offer a clear indication of the European HDTV market two years from now, but the current situation is a chicken-and-egg scenario: Sales of HD-equipped sets depend largely on quality content and accessibility, which must be driven by sales and consumer demand.

But sales of HD-compatible TV sets in Europe remain so marginal that no detailed figures exist.

"It's certainly less than 1% of television sales," says Jurgen Boyny, consumer electronics division manager at leading European market researcher GfK.

Despite such slow consumer uptake, some of the continent's major broadcast groups seem determined to get in on the next technological revolution in television — one that is comparable, some say, to the switch from black-and-white to color. Sporting events such as last month's Athens Olympics and major international soccer tournaments are likely to be the prime content meant to attract HD viewers.

The front-runners for HD transmission in Europe are:

Leading French commercial TV network TF1, which hopes to beam HD signals on that nation's upcoming digital terrestrial system by next autumn

Both French pay TV group Canal Plus and rival platform TPS plan to transmit their premium channels in HD via satellite by the end of 2005.

Leading German pay TV group Premiere, which promises to offer HD satellite and cable broadcasts by the end of 2005

U.K. satcaster British Sky Broadcasting, set to bow its HDTV service in 2006

Belgium's Euro 1080, launched in January as the continent's first HD satellite broadcaster and which aims to break even by 2006 with a projected half-million customers

To highlight Europe's interest in HDTV, the MIPCOM television market, set to kick off Monday in Cannes, has scheduled conferences to discuss how broadcasters and producers are approaching the format's challenges.

Central to that debate, undoubtedly, will be technical standards. In the United States, HD resolution is 720 lines, a significant improvement on the 525 lines used for standard broadcasts; in Europe, where the broadcast standard is 625 lines, the high-def standard likely will be 1,080 lines in order to allow for an appreciable change in picture quality — though that figure has not yet been adopted as a norm.

European broadcasters also are awaiting a signal-compression standard that will allow HD channels to use less bandwidth, making them less costly to run. The main contenders for that standard are Apple's MPEG-4 and Microsoft's Windows Media 9.

Digital satellite and cable operators already are capable of pumping out high-definition programming, but with digital terrestrial systems still struggling to find their mark in Europe, widespread free-to-air HD broadcasting seems a long way off. The United Kingdom is the only major European territory in which digital terrestrial has reached critical mass and the only one in which a date has been set — 2012 — for switching off analog transmission.

Nonetheless, France, set to launch digital terrestrial next year, suddenly has begun to take HDTV seriously. July saw the launch of the HD Forum, an alliance of broadcasters, hardware manufacturers and content distributors that has won the backing of industry minister Patrick Devedjian and is pushing hard for an MPEG-4 standard to be adopted in favor of MPEG-2.

A French government study is due to report next month on the pros and cons of upgrading to MPEG-4, which calls for about 40% greater compression than does MPEG-2 and would allow more space for HD signals. Some Gallic broadcasters — notably pay channel Canal Plus — are opposed to the switch, saying it would delay the introduction of digital free-to-air services, already the subject of multiple postponements.

"The mass commercial launch of HDTV is not foreseeable for several years," Canal Plus chairman Bertrand Meheut says.

But TF1 reckons that next-generation MPEG-4 set-top boxes and transmission technology could be in place as early as September 2005.

"By then, we could have everything ready," TF1 new-technology development manager Sylvain Audigier says. "It's worth waiting six months for the television standard of the next 30 years; if digital terrestrial doesn't involve high-definition, then I can't see the interest for consumers."

In Germany, HDTV went from largely ignored to center stage this month when Premiere announced plans to offer three HD channels — for films, documentaries and sports, respectively — to subscribers in Germany and Austria, beginning in November 2005.

"Our subscribers will be blown away by Premiere HDTV; it is television in a whole new dimension," Premiere CEO Georg Kofler says.

Premiere will carry HD channels on cable and satellite, and decoders will go on sale for Christmas 2005. To test the system and entice potential customers, Premiere will air Super Bowl XXXIX live in HDTV in February at Berlin's Sony Center.

But Germany's free-TV broadcasters remain skeptical of HDTV's potential.

"I think it will be very difficult to imagine an HDTV market developing (in Germany) because our TV signal is already very good," says Gerhard Zeiler, CEO of RTL Group, Europe's largest broadcaster. "That's the difference with America: The quality difference between Europe's (existing) system and HDTV is almost impossible for the consumer to see with the naked eye. So it is a much bigger issue in America than in Europe."

Nonetheless, many major European producers are increasing their HD output rapidly, despite a 15%-20% hike in production costs. The BBC now shoots nearly all of its co-productions in high-def because of the worldwide appetite — particularly in the United States and Japan — for HD-quality programming.

"Where HD is an absolute must is in programs we do with Japan — for example, with 'Planet Earth' (the BBC's next big documentary)," says Mike Phillips, managing director of international television and film at BBC Worldwide. He adds that HD also has become important for big music events, on which DVD partners are keen on high-definition.

Tele Images, one of France's leading independent program-makers, has produced two wildlife documentary series in high-definition: "Wild Nights" and "Urban Wild," the latter co-produced with Japanese public broadcaster NHK.

"We managed to make several sales to the (United States) on the shows, so using HD opened at least one new opportunity," Tele Images executive vp international Marie-Laure Montironi says. "The market is not sufficiently mature to produce everything in high-definition, although it does give an additional production value even for traditional broadcast."

Southern Europe has only dallied in HD technology thus far. Spain's Telefonica Audiovisual Services performed a two-week test via satellite in January; the trial, which used the MPEG-2 format, was considered successful — but there has been no word since as to when Telefonica might begin to offer an HD service.

Sogecable, Spain's largest pay TV powerhouse, also has experimented with high-def programming on its pay channel, Canal Plus Spain, and its satellite platform, Digital Plus.

"There still aren't very many producers creating high-definition product because there aren't many HDTV sets in Spain — so it doesn't make much sense for us to air it," a Sogecable spokesman says.

In Italy, some observers believe that HDTV has fallen victim to the European Union's bureaucracy and centralization.

"We started experimenting with high-definition as early as 1987, but then the EU stopped us because they didn't like our partnership, at the time, with Japan's NHK," says Raffaele Barberio, director of Italian media-news Web site Key4Biz.it. "They wanted to impose the HDTV standard adopted by the EU, which was not the best standard available back then."

As Europe's major broadcasters wrangle about how and when to take the HD plunge, Euro 1080 has taken a pioneering course, beginning HD broadcasts in January using MPEG-2 compression via an Astra satellite.

With partners including hardware manufacturers Pioneer, Thomson, Panasonic and Canon, Euro 1080 began as a showcase, running demonstration programming on a loop.

Since the start of this month, the broadcaster has rebranded its channels as HD1 and HDE (the "E" is for events) and has charged customers for access. Customers pay €200 ($245) for a "smart card," a one-time fee that grants access to both channels until the end of 2010.

"We have four hours of fresh content daily, from 8 p.m.- midnight," Euro 1080 assistant CEO Vicky Debuele says.

Euro 1080 plans to begin broadcasting documentaries and movies in December and is reckoning on 4 million paying customers by early 2008.

One thing is clear nearly industrywide: Broadcasters and producers will remain reluctant to invest in technology until the penetration of HD sets reaches a critical point.

Boyny predicts that sales of HD sets are bound to increase beginning next year as prices fall and more content becomes available.

"Manufacturers that we deal with are ready for HDTV and would greatly appreciate channels starting to broadcast (in that format)," he says. "It depends on the position of the broadcasters, and a lot will depend on whether the World Cup is shown in HD — this would be a very strong driver."

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