One in Four UK Homes will Have 3D TV by 2014

London, June  16,  2010--Several weeks after the launch of the first 3D TV in the UK, a new report from Kelkoo, the shopping comparison website, reveals that almost one in four households (23%) will own a 3D enabled television set by 2015. With prices predicted to fall by 60% from £1,720 today to just £786 over the next five years, it is estimated that the UK market will be worth an estimated £7.25bn by 2015 with 7.6 million consumers investing in the new technology. In addition, the hype surrounding this year's FIFA World Cup will also play a pivotal role, boosting HD TV sales by 5% or £118 million as consumers flock to upgrade their home entertainment systems. 

The report, commissioned by Kelkoo.co.uk and carried out by the Centre for Economics and Business Research, provides a comprehensive overview of the prospects for HD TV and 3D TV in the UK over the next five years, and examines the drivers behind the adoption and market penetration of these technologies.

Launched in 2005, HD or high definition technology offers viewers a much clearer, sharper picture, and is up to four times more defined than standard definition television. Market penetration increased rapidly over the past five years and today 12.5 million households in the UK (47%) own a HD television. The numbers peaked at around 8.5 million sets sold in 2008 and by 2009 around 80% of all televisions sold were HD enabled with cumulative sales totalling over 23 million sets by the end of 2009. This growth has been mainly driven by falling prices, the increasing quality and quantity of services on offer, and the availability of TV programmes broadcast in high definition.

As with all new technology, the average price of HD-enabled television sets fell by 59% between 2006 and 2009. While early adopters had to pay £1,000 on average in 2006, the average price fell below £400 in 2009. At the same time, HD content has risen to over 40 available channels, including those broadcast on freeview. However, despite the popularity of HD enabled equipment, just 26% of households actually subscribe to HD channels, meaning that 74% of consumers are not enjoying HD to its full potential.

For the first time in 2009 the HD TV bubble burst due to the economic downturn and market saturation. As a result, the number of sets sold fell by 15% in 2009 from 2008, and sales values also declined by 33% due to the combined effect of lower sales and price erosion. On a positive note, the World Cup is expected to generate a 5% boost in sales, equivalent to an additional 363,000 units sold and £118 million in incremental consumer spend by the end of this year [2]. However, revenues are expected to decline again in 2010 (-13%) as downward price pressures continue.

Meanwhile, the initial sales forecasts for 3D TVs are promising and could help to turnaround the industry's fortunes. Commentators believe that by 2018, 64 million 3D TV sets will be owned worldwide accounting for global sales worth an estimated $17 billion. Following the resounding success of 3D films like Avatar and Alice in Wonderland it is believed that worldwide household sales of 3D ready televisions will stand at 845,000 by the end of this year, even if less than one in eight homes will actually have access to 3D programmes. In the UK alone sales are expected to reach 40,000 units in 2010 totalling £68 million, and representing just 0.4% of the market; by 2015 the market share will have risen to 18% and be worth an estimated £7.25bn, with 7.6 million consumersor one in four households in the UK owning a 3D set.

3D or three dimensional televisions are about providing more immersive and true to life experiences and have only become commercially available in the past few weeks. The success of the new technology will depend on overcoming a number of interrelated factors including initial technical issues, lack of content availability and affordability. Prices are predicted to fall by 60% from an average £1,720 today to £786 in the next five years, but early adopters may feel short changed as 3D TVs currently cost more than five times the average price of a 26 inch HDTV (£324).

Content is also an ongoing issue with audience figures set to lag behind television sales. While 845,000 households worldwide will have 3D sets by the end of 2010, only 101,000 homes will watch 3D shows. A number of factors will contribute to this gap, including the limited availability of content and viewers not realising that they must have the right set top box and subscription package. At present, content is limited to DVD films and games, and according to Ofcom 3D broadcasting is not expected to be fully available in the UK until 2012. However, BSkyB said customers would be able to enjoy 3-dimension viewing at home later in the year and the number of 3D films is expected to increase to 31 in 2010, from 19 titles in 2009.

The broadcasting of HD3D requires up to four times the bandwidth of ordinary HD and broadcasters are already struggling to free up capacity to deliver HD. Much of this issue will be resolved when the digital switchover is completed in 2012 and analogue TV is no longer taking up valuable space.

Bruce Fair, Managing Director of Kelkoo UK, comments: "HD TV sales have reached a natural point of saturation so the world cup effect will provide a welcome sales boost for retailers and manufacturers alike. Historically, major sporting events can have a significant impact on the sale of consumer electronics products, and the arrival of 3D ready televisions in time for the World Cup is no coincidence.

"The industry is tying its hopes to 3D technology to become the new growth driver for the consumer electronics market so it is widely anticipated that any barriers to entry will be swiftly addressed. Issues such as affordability and the lack of content on offer are likely to be alleviated with proximity of events such as the 2012 London Olympics as a means of showcasing the technology.

"Consumers are understandably keen to upgrade their home entertainment systems in time for major events, however, prices for 3D TVs are currently at a premium and will be for the next couple of years, which means consumers should always shop around and compare prices before making any purchasing decisions."