Freeview is on course to overtake BSkyB's pay-TV service by the end of the year, according to latest analysis by the Institute of Practitioners in Advertising (IPA). The marketing trade body, which represents 250 UK advertising and media buying agencies, says digital terrestrial television (DTT) now serves 27.3% of all UK households, just behind Sky's 31.5% share of main digital TV sets.

"If digital terrestrial continues to increase its market share by 2% per quarter, as seen in 2005, it will surpass digital satellite as the UK's most popular television platform by Q4 2006," says the IPA's Trends in Television Viewing report for the first quarter of 2006.

Key points in the report (which is based on Barb data):

* The UK continues to embrace digital television with two thirds of households having made the switch; 31.5% have satellite, up from 25.3% in Q1 2003; 27.3% have digital terrestrial, up from 3.5% in Q1 2003, and 10.9% have cable, up from 10% in Q1 2003. Analogue now accounts for 33.8%.
* Channel 4 bucks the downward trend of major channels to record an increase in audience share, increasing from 9.7% in Q1 2005 to 10% in Q1 2006.
* The other four main channels all lost audience share: BBC One is down from 23.7% to 22.4%; BBC Two is down from 9.6% to 9.4%; ITV1 is down from 22.3% to 20.6%; and Five is down from 6.4% to 5.9% (Q1 2005 to Q1 2006).
* Viewers continue to switch over to non-terrestrial channels, now accounting for 32% of all TV viewed, up from 28% in Q1 2005 and 24% in Q1 2004 and 22.8% in Q1 2003.

Jim Marshall, chairman of the IPA media futures group, said: "Digital television continues to grow at a significant pace, clearly most recently driven by the Freeview service. However, with around two years until the start of analogue switch off, it's worrying that still a third of UK homes have chosen not to 'go digital'. This could represent a serious challenge to the government's plans for analogue switch off."

Freeview general manager Cary Wakefield said: "We're delighted that most homes switching over to digital are now choosing Freeview. The outstanding channel line up, which will soon see Film Four and two new channels from Five coming on board, demonstrates our broad appeal.

"Couple this with the simplicity of a one-off payment and no-subscription and you can see why, according to Ofcom's latest report, 7.1m UK householders have already chosen Freeview to be their primary source of digital television. And with the recent announcement of the Freeview Playback brand for a new generation of digital TV recorders, we expect this strong growth curve to continue."