The HDTV transition in Europe is not going as well as in the United States, a report from Strategy Analytics finds. Only 5% of HDTV owners are actually watching HD content. What’s less promising, is that non-paid subscription HD channels are shutting down. In Germany, a leading broadcaster recently turned off two of its HD channels given the low audience count.

However, the report expects the number of European HDTV subscribers to grow to 3.5 million in 2008. And, Strategy Analytics predicts that by 2012 twenty percent of all European households will have HD channels available.

 “It was always highly ambitious to expect advertising revenues alone to support HD channels in the early years,” said David Mercer, Principal Analyst. He adds, “Significant audiences cannot be built until the market has been seeded with millions of HD receivers–and this was always going to take a number of years.”