THE growth of digital TV, with the promise of hundreds of channels within a few years, appears to be slowing down. Media companies are beginning to question the speed at which it will grow.
As the American studios go through their annual auction of programmes to the European television channels, it has become obvious that the growth in the number of European TV channels is pushing up the price, with a greater number of outlets bidding for programmes.
As new channels seek exclusive deals from big producer companies such as Viacom, Warner and Disney, the cost of exclusive output deals are increasing. Some deals, for all the programme output from a particular studio, are costing up to $1 billion.
The high cost is forcing media - groups to question just how quickly the market will grow and when they might start seeing a return. Recently, the pan European broadcasting company, Compagnie Luxembourgoise de Teledeffusion, (CLT), announced it was abandoning plans for digital TV in Germany. The significance of this is obvious as CLT and Beitelsmann had recently merged their television interests to become Europe's largest broadcaster.
As well as the rising cost of programmes, problems with developing a common decoder technology for televisions have added to the problems with the development of digital services.
CLT, which owns 80 per cent of Radio Tara, the company which broadcasts Atlantic 252 from Trim, Co Meath, said it planned to concentrate on free TV markets because of the sluggish demand for digital services.
The other media giant, the German company, Beitelsmann, has independently announced it is postponing its entry into the digital market until there is a greater likelihood of attracting a bigger audience.
There are, of course, many still interested in offering new digital services. BSkyB, for instance, is developing up to 200 channels next year, while the BBC and the British independent channels are developing terrestrial digital channels alongside their conventional analogue services.
Digital arrived in Germany this July when the German Grand Prix was transmitted by the new DF1 service, owned by Kirch and BSkyB.
This service offers 17 channels, including two sports channels.
One of its major attractions, and something that only a digital service can offer, is that it has a degree of inter activity. While watching the grand prix viewers could select camera angles.
According to the trade magazine, TVB Europe, DF1 hopes to have 200,000 subscribers, paying 20 or 30 D marks (£8 to £12) a month, by the end of the year.
Industry sources think that is optimistic, but point to the number of people subscribing to other analogue pay channels, more than three million for Sky, two million for the French pay channel, Canal Plus and one million for the German channel, Premiere. Yet those figures took up to five years to achieve, sources pointed out.
The rush towards digital was fuelled by the technology developers who predicted a future of unlimited band width. The attraction of freeing wave bands for other uses, such as mobile phones, also pushed the broadcasters to embrace the new technology.
Now some broadcasters have realised that they face a number of problems - the rising cost of programmes, technical problems, such as a common standard for the television boxes that will decode the signal and last, but possibly most importantly, the resistance of the viewers. The move towards a digital future has been initiated by the industry. Viewers are not clamouring for the better picture promised by the broadcasters, nor are they asking to buy digital televisions.
Having sounded the warning, however, there is little doubt that the future will be digital, but it might be the longer term future, rather than the immediate future.
The BBC is launching a number of channels, which will be delivered in digital form. Sky is intending to push ahead with its plans and even CLT is still officially planning digital services in France with TF1 and M6.
However, sources are suggesting that, in the light of the latest developments, even this might be reviewed.
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