Kate Bulkley, Media Analyst.

Extra costs take digital bill to 1bn

By Kate Bulkley

The Guardian

Tuesday November 9, 2004

The cost to consumers of converting Britain to digital TV is likely to be 1bn, a third more than estimated, Freeview will tell the government today.

The cost of digital terrestrial TV more than doubles for nearly a third of those who buy Freeview set top boxes, according to research commissioned by Freeview.

Of 1,000 people interviewed by TNS Research in August and September, 29% said they had to spend an extra 80 to 100 to have their TV aerial upgraded after they bought their Freeview box.

This figure contrasts sharply with the figure of 10% published in the draft report of the Digital TV Project. The project is a partnership of government departments, TV equipment manufacturers and broadcasters; its final report is due to be delivered to ministers at the Department of Trade and the Department of Culture, Media and Sport at the end of this month.

"This 29% figure is significant because it implies that converting to digital is not going to be as straightforward or as cheap as the government thought," said a Freeview spokeswoman.

The research comes at the same time that the government says it will announce a new cost-benefit analysis for the digital switchover that will show a greater benefit to UK plc than forecast last year.

"The net benefit of digital switchover will be higher than we said last year and importantly we think that if you de lay digital switchover [this benefit] could fall," Lord McIntosh, minister for media and heritage, told a New Media Markets conference yesterday.

He would not name the new benefit figure, but industry insiders say it could be as high as 2.8bn, up from the forecast of 1.5bn to 2bn.

Allan Williams, senior policy adviser for the Consumers' Association, commented: "Consumers benefit the most from digital TV but they also have to carry most of the cost."


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