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Friday, July 28, 2006
The Search for Perfect HDTV Customers

Trying to second guess consumer buying habits can put you in the funny farm. We were positive that the World Cup would get people crowding stores to grab up new LCD, plasma and projection HDTV sets. What went wrong? What needs to be done?

If it weren't for the head butt, retailers and manufacturers would have swore the games had been cancelled.

How could we have underestimated the draw? Let's look beyond "conventional" wisdom.

We got our 50-inch set a year ago after our 5-year-old projection system died.

We knew what we wanted:

- BIG screen
- Able to see shows in HighDef
- Capable of the total home entertainment solution we envisioned
- Cost something less than our second born

We visited two big box stores and one big screen specialty store. The clerks threw every acronym and phrase in the book at us - true NTSC, HDMI (turns out this is really important!), 720p and 1080p, 16:9 aspect ratio and more (some of them we had even heard of!).

We stood back and stared at screen, after screen, after screen. Boy, they were thinner than our old piece of furniture. Picked the one we liked the images on. It was HD ready (the label said so).

Heard the price. Sold the kid. Bought the set.

Rearranged the family room for optimum 7:1 sound (can't wait for it to be available).

Right after the techs installed the set they informed us that to get real HighDef we'd have to buy a special tuner for only $500 because the set was only "HD Ready."

For the most part we're happy. Of course the shows suck but the picture looks great !

So back to our original question - why didn't folks snap up HDTV sets in Europe, the Americas and ROW like they did for the Super Bowl?

For all practicalities every set sold in Japan and the rest of Asia for the past two years is digital. At the prices they charge over there those folks really like their TV !

More than 10 million sets were in use worldwide in 2004. By 2008 the figure is expected to rise to about 30 million.

Europeans have been slow to buy the sets because there aren't that many shows in HighDef - little content, little need. The World Cup helped a little but all of the pubs had the contests in HighDef so why stay home?

Canada has a lot of content options (most pay-for-view) but the sets and HD PVRs are very expensive.

In the U.S. it is estimated that less than 10% of the households will have HDTV by the end of the year. Put another way, most TV set owners find the quality of content they are viewing is.good enough. In fact when they pull the plug on analog TV on Feb 17, 2009 it is estimated that 20+% of the households still won't have HDTV sets.

Unless content quality becomes a lot better and HDTV prices drop dramatically there will be more than that.

In Central and South America countries are still arguing about which format and standard to use. Even then prices are out of reach for 80+% of the populations.almost twice the price in the U.S.

But these minor issues haven't slowed the set manufacturers. They continue ramping up new plasma and LCD manufacturing as rapidly as possible in Korea, Japan and the Chinas.

iSuppli, one of many research firms tracking the TV market, projects solid growth in LCD sets and modest growth for plasma screens (Fig. 1). Good but hardly the demand needed to keep all those new production lines running profitably.

One of the problems is that today people have video choices. We've got mobile video (increasingly 3G), IPTV, video iPod, PSP, smartphone, digital TV, POT (plain old TV) and PC/broadband.

Options don't mean much to Baby Boomers who have the HDTV set permanently implanted in the center of their entertainment environment. Gen X, Y, Z buyers however are extremely comfortable with viewing content on their PC and mobile whatever.

On the PC, HighDef matters. On your mobile device - iPod, PSP, smartphone - who cares?

Digital video screen and device sales are going to continue to grow steadily but the mix of screen size seems to be shifting to personal and portable devices.

While the CEA (Consumer Electronics Association) has finally launched a consumer education program for HDTV most people don't understand when big box clerks go into their song and dance. Superbly sharp, clean, crisp viewing enjoyment. Compared to what ?

Consumer studies like StrategyOne's of US HDTV owners have found that:

- 28% of the owners believed picture quality was higher with their HDTV set
- 23% believed that the message in the lower left of the screen saying the show was broadcast in HD so quality was already there
- 18% believed that the HDTV set would give them HD channels without added equipment
- 14% said that the salesperson told them the set was all they needed

Want an impartial explanation of the benefits?

Visit Wikepedia.org as we did when we tried to figure out why folks hadn't bought all those HDTV sets we said they would for the World Cup. The advantages in non-engineering terms leave a lot to be desired.

Of course the video resolution graphics made everything clear as mud !

Wikipedia's table illustrates total horizontal and vertical detail via box size. It does not accurately reflect the screen shape (aspect ratio) of these formats, which is always stretched or squeezed to 4:3 or 16:9. The table assumes an average vertical detail loss of .75x due to interlace.

The actual loss is variable due to content, motion, opinion on acceptable levels of flicker, and possible success of deinterlacing. 1920 ? 1080i is not included because all common use of 1080i is filtered to 1440 or less.

What the HDTV set and home entertainment network folks won't tell you is that the beautiful video entertainment vision is still a cloudy dream.

Much of it is still outside of their control no matter what they do to deliver devices and solutions.

They understand and support the consumers' desire for digital rights management - being able to move audio/video around the house, to your mobile device and do it effortlessly.

That's a goal. That's a work in progress.

Sure you can view TV shows such as they are. Don't forget to buy the tuner or have an HDTV card in your PC - they're less expensive and the network/local stuff is still beamed to you through the air.

You may be able to use your PVR to timeshift (that's still up for grabs but Hollywood is pushing hard to take that off your wish list).

Store the content on your HD? Ah, maybe.

Move it to your smartphone/portable device? Hollywood and cable companies aren't hot for that either.

Your present DVD movies will look better on your HDTV set. The box sets of TV series are great to watch. You just have to put them on pause when you have a bathroom or snack break.

So what's stopping you from taking the plunge?

HighDef movie availability?

Give Hollywood a year or two to work out the post production kinks because most of the stuff right now is just reprocessed. Not well but reprocessed in HighDef. It will take them at least a year to learn how to take advantage of all of the post production tools they have.

By 2009, the content and interactive capabilities will be so phenomenal that you'll wonder why you ever bought that copy of Ultra Violet (you did really?). And by then the prices of HighDef disc players, recorders and media will be "reasonable."

Yes, you can still enjoy today's DVD favorites.

The price for high quality plasma and LCD sets have come down quite a bit since you didn't buy one like you were supposed to for the World Cup. By this holiday season they should be extremely reasonable.

Most important is the fact that the big box sales people may be able to explain the HDTV difference so you can make an intelligent buying decision for your home and your viewing habits.

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