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Opportunity in Transition to Digital Television

With digital terrestrial television (DTT) subscriber numbers set to expand from less than 36 million in 2006 to 89 million in 2012 and broadcasters preparing for the digital switch-over, the market dynamics of local and regional over-the-air video transmission is quickly changing.

The result will be growth in consumer equipment and core-network markets for digital-video equipment. Broadcasters stand to benefit in several ways, according to ABI Research's principal broadband analyst, Michael Arden.

"Not only does digital broadcasting allow them to do targeted local advertising more easily, it also allows them, using their existing spectrum license and allocation, to add extra sub-channels, which could contain specialty content or HDTV programming."

Digital broadcasting offers real business advantages, says Arden. The ability to create localized content (news, sports, etc.) on a limited budget and to resell it to cable companies and others is quite significant. I believe that targeting short and long-form advertising to localized niche programs will offer a unique new promotional opportunity for small businesses.

Digital terrestrial television provides a terrestrial-transmitter-based over-the-air video service and will be used in some markets to supplement Telco TV (also known as IPTV). Already gaining traction in Western Europe, DTT provides both free and subscription services while offering low-cost customer premises equipment.

The uptake of DTT will coincide with digital switchover, although there are several DTT formats in use around the world, and political or economic as well as technological considerations enter into the decision-making process in various countries. DTT will emerge as a tool for providing video to under-served markets and to supplement other services.

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