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MHEG-5 exhibits uneven growth

23 March 2007

Members of IMPALA, the International MHEG Promotion Alliance, have welcomed the latest receiver sales figures announced by Freeview, the UK DTT platform. In Spain, however, the format is languishing, writes Andy Stout.

Freeview is celebrating its best receiver sales quarter ever, with more than two million digital terrestrial receivers including set-top boxes, integrated digital TVs and digital TV recorders, purchased in the UK in last quarter of 2006. All receivers include the MHEG-5 middleware to support interactive TV. The industry now claims over 14 million Freeview receivers sold in the UK with many homes having multiple receivers.

IMPALA is an industry group formed by software vendors Strategy & Technology, Cabot Communications and Echostar to promote the use of the MHEG-5 interactive TV standard.

The success of Freeview (where all receivers must include the low-cost MHEG-5 middleware) is in contrast to the situation in Spain. The latest figures for DTT receiver sales in the country show that Spanish viewers are not interested in paying a premium price for MHP-enabled devices.

In the last quarter of 2006 in Spain, 437,000 DTT receivers (set-top boxes, integrated TVs and PC-enabled DTT cards) were sold, but only 514 were MHP-enabled. (Source: the DTT Association, Impulsa TDT). The main reason seems to be that MHP set-top boxes are significantly more expensive, costing from Euro120 or more, compared to around Euro50 or less for standard receivers. For comparison a UK DTT set-top box including MHEG-5 middleware costs around Euro50.

Overall, there are more than 3.3 million DTT boxes in the Spanish market, of which 2.7 million were sold in 2006. The very low penetration of MHP-enabled receivers in Spain and other countries makes it very difficult for broadcasters to build any viable commercial business models for interactive services.

IMPALA believes that viable interactive TV services can be launched where the population of receivers contains MHEG interactive middleware by default. The cost of this is low compared to MHP implementation, especially since the high volume generated by Freeview in the UK is driving down cost. The incorporation of MHEG-5 capability into integrated TVs is also universal across the UK market and these receivers could be made widely available for DTT rollouts in many countries.

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