Our take...
Sky HD has already by far the largest HD package in Europe, although far smaller than what is offered by US operators (30 to 70). The pricing of the HD option (£399 for the HD box and £10 per month on top of existing subscription) will not change in the short term but we anticipate that the cost of the box will go down at some point this year in order to accelerate HD uptake. Sky recently announced 422,000 HD subscribers in UK and Ireland at end-2007, although the calendar fourth quarter showed no acceleration of customer acquisition compared to a year earlier.

This expansion deepens the sports/movie emphasis of Sky HD but we expect other categories to go HD in the UK in the next 18 months, following the many brands that launched an HD version in the US during Q3 and Q4 of 2007 (music, news, entertainment, lifestyle, children). FX HD was one of them. HD is attractive for content providers as it drives viewing. Recent consumer research by Ofcom (in 'The Communications Market 2007') found that HD programming accounted for one-third of total viewing in HD-enabled homes. In addition, 43 per cent of HD homes reported that their overall TV viewing had increased since taking HD.