One of the many nuggets offered by our latest survey digital home device markets is that more than 50 million TV homes around the world will be using a digital video recorder (DVR) by the end of this year. The US is leading the way, with nearly 30 million DVRs now in use (25% penetration), certainly a significant lead over Europe, where we estimate the installed base at around 14 million (8% of homes). (Note: these estimates include only DVRs provided by digital TV service providers. In particular, they exclude DVD recorders that incorporate a hard disk drive and therefore can serve as a DVR; this option is particularly popular in Japan.) The DVR has come a long way, but it has taken longer than many observers expected. Reporting on TiVo and ReplayTV in 1999, we noted: As each company gets drawn into wider industry alliances, it will inevitably lose control of its own destiny. DirecTV will want TiVo to serve its audiences, not those of rival services. Eventually the broadcaster will either swallow TiVo completely or develop its own solution independently." Well, DirecTV does have its own solution, although the TiVo partnership continues. But as we suggested, TiVo's share of the DVR market has dwindled to a few percentage points as operators push their own proprietary solutions. The DVR has now become a key competitive tool for digital TV providers and is set to move into the mainstream over the next few years. sub=addfavbtn&add=http://www.strategyanalytics.com/blogs/dmercer">

As one country finishes its analogue switch-off, another begins. On Monday morning at 8.45am Sweden’s Culture Minister, Lena Adelsohn Liljeroth, switched off the country’s last remaining analogue terrestrial transmitter at Hörby in Skåne. Two days later, in the UK, the same process is just beginning. This morning 20,000 households in Whitehaven, in Cumbria in northern England, woke up to find that BBC2 was no longer available on the analogue terrestrial service. Actually, if everything went according to plan, this should not have surprised any of the residents of this small coastal town. Over the next month the remaining analogue channels (BBC1, ITV and Channel Four) will also be removed, leaving room for the replacement DTT channels offered by Freeview. Is this a case of the UK falling behind? It would be easy to play the blame game as different European countries progress at their own pace towards an all-digital future. Sweden in fact is the fourth country (after the Netherlands, Luxembourg and Finland) to end analogue terrestrial TV, and a number of German Laender are also digital-only. The UK may just be beginning the process, but it is not the slowest. France and Spain have yet to begin switch-off, and Italy has just revised its schedule. The irony is that the countries that have succeeded in moving quickly towards switch-off are not necessarily the most successful in promoting digital TV. In fact, the UK still has the highest penetration of digital TV in Europe (more than 80% of homes have at least one TV able to watch digital channels). The secret in the Netherlands, Sweden and Germany is that many homes there have not used analogue terrestrial TV for many years – they use analogue cable TV, and continue to do so. It is in the less cabled countries – such as France, Spain, Italy and the UK - where switch-off is most challenging. Even though digital penetration in the UK is high, the switch-off process will be arduous. Converting all the second and third TV sets, as well as recorders (VCRs and DVD recorders) to digital will not be a trivial task. If Whitehaven proves successful, the UK's 2012 deadline will looking increasingly realistic. sub=addfavbtn&add=http://www.strategyanalytics.com/blogs/dmercer">

As we predicted, BD player prices are plunging in time for the Christmas buying season. At €399 (£299), Sony’s new 40GB PS3 will be a tempting option for any early adopters thinking of starting out on the long road towards upgrading their DVD collection to high definition. The PS3’s form factor and design may not appeal to buyers used to wafer-thin DVD players. But then it also includes a hard drive (albeit one scarcely able to cope with HD content) and wireless connectivity, not features of your standard BD player. Sony must be confident that the new PS3 will be supported by a raft of new games titles in the next couple of months, given that it has sacrificed PS2 compatibility to squeeze cost out of the new console. Lack of choice in games is one of the biggest complaints of early PS3-ers, and the new device will not do well if buyers are not able immediately to get their hands on two or three compelling titles. The new price point will certainly make holiday season gift buyers think twice about the Xbox 360, which enters the European market at £250. Microsoft will not want to start another round of price cuts, but if sales strength is not maintained thru November it may have no choice. Nintendo is unlikely to be affected: it seems increasingly clear that the Wii is in a market of its own, and many Wii owners will also be future PS3 adopters. sub=addfavbtn&add=http://www.strategyanalytics.com/blogs/dmercer">

Italy's Telecommunications minister, Paolo Gentiloni, has announced that the country's analogue switch-off date will now be 2012. This compares to the current official plan to complete the digital transition by next year, which was always highly improbable. Back in 2000 we wrote: "Italy continues to bemuse outsiders. Decision-making is still geared towards satisfying ever-changing political priorities, rather than developing coherent long-term strategies. ...There has even been a suggestion (by the Communications Minister) that analogue switch-off could occur as early as 2003. To describe such ideas as pure fantasy would be polite." In fact, in 2000 the official "switch-off" date was announced as 2006, which remained the objective until 2006 loomed too close for comfort, and was then revised to 2008. So Italy has an impressive track record of tearing up its old digital TV plans; now realism finally appears to have taken hold. The 2012 objective should be realistic, assuming the proposal for mandated DTT tuners is formally adopted, although there is still a long way to go - half of Italian households still rely solely on analogue terrestrial TV signals. As we predicted, France's new DTT strategy has already had an impact on the rest of Europe. We will watch the details of Italy's transition plan with interest.