Eastern Europe digital switch in high gear


BUDAPEST -- Eastern European territories are moving fast toward the digital switchover with a growing number technically able to make the change now, executives and observers with experience in the region say.

Technical and regulatory measures essential for digital television are all advanced in Poland, Hungary and Russia, according to Barry Cupples, CEO of U.K.-based Omnicom Media Group.

Cupples, who has more than a decade's experience living and working in Central Europe, said that many of the fears Western executives of conventional terrestrial television express about threats to the established advertising-revenue business model are fast being resolved by industry leaders in Eastern Europe.

"A lot of the best ideas I see in digital (TV), in terms of integration, are coming from Russia," Cupples said during a visit to the Hungarian capital for the DISCOP television content market.

The idea that digital will "kill" television's advertising-subsidized business model is erroneous, Cupples said. "Information and content will still be king. Interactive television in the U.K. proves that people still want information. (Advertisers) are still going to get their message across; it is just that the 30-second spot does not do it anymore," he said.

Said Chris Dziadul, chief East European analyst with Broadband TV News: "There is a momentum building up: Only last week Hungary's parliament gave the go-ahead to digital television, and they will have a government strategy in place by July for the transition. A similar thing is happening in Romania. And high-definition and VOD are catching on in a big way in Poland and Russia."

Digital development in the Czech Republic is awaiting a new media law, Dziadul added, but is expected to join the "fast-moving head of steam" soon.

Tim Horan, executive vp of Poland's ITI Group, said Poland's switch to digital will take place with relative ease when the 2012 date set for Europe's move to the new broadcast medium arrives.

"In Poland, there are 12 million-13 million television households. Some 80% of cable provision already is digital," Horan said.

British-born Horan, who moved to Warsaw from Moscow last year, said ITI has plans to launch a pay-per-view video on demand service that will draw on material from five major Hollywood studios. ITI Group's interests also includes a major bouquet of television channels.