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off at last, no joke
Set prices falling and more cable ops offer service
By David Everitt
Sometimes it seems like we’ll be forever reading stories telling us about the coming of HDTV.
Stories like this one, for instance.
Still, something’s been going on lately that might help get high definition television out of the consumer-electronics showroom and into the living room.
HDTV offers as much as twice the amount of visual information as traditional television, and displays it on a wide, rectangular screen that approximates the dimensions of a movie screen. In fact, at its best, watching HDTV is like having a personalized movie-theater experience in the home.
Not that any of these fine qualities have succeeded in turning the format into a widespread commodity. A big part of the problem has been that everyone is waiting for someone else to go first.
NBC is currently supplying high-definition broadcasts of the winter Olympics, but for the most part networks haven’t been offering much HD programming because they’ve been waiting for consumers to buy more HD sets, and vice versa.
At the same time, cable operators have been waiting for both programmers and consumers to make a move before committing themselves to offering the enhanced TV service.
But in the last few months cable operators have started to get beyond this logjam.
At the end of last October, Comcast began offering HDTV service in Pennsylvania, New Jersey and Delaware, an area comprising 1.3 million Comcast customers.
Cox, which initiated the service in Omaha over a year ago, has now brought the high-definition option to North Carolina. And just this past December, Canadian Rogers Cable started marketing HDTV to 70 percent of its Ontario customers.
Does this amount to a significant trend?
"Cable operators are clearly interested in rolling out the service," says Adi Kishore, analyst for the Yankee Group.
The next question is: What’s the reason for the cable industry’s new interest in HDTV?
"People are buying more high-definition TV sets," says Michael Allen, vice president of programming at Rogers Cable. "The number of sets out there has risen dramatically."
That is the key development behind the accelerated activity, the thing that has at least partly disrupted the HD waiting game and set some players into motion.
As for what’s behind the increased HDTV sales, that comes down to the inevitable process of electronics price-cutting that results from more sophisticated and less expensive ways of manufacturing the necessary circuitry.
When HDTV sets first went on the market, they were out of range for a lot of people–for just about everybody, actually–costing between $5,000 and $7,000. But, according to the Consumer Electronics Association, prices have dropped 46 percent in the three-and-one-half years since high-definition products were introduced.
Integrated HD sets (meaning sets that include the digital tuner required to receive HD signals) now go for about $2,000. HDTV-ready sets (meaning sets that can receive HD signals when the consumer adds a digital-tuner set-top box) now go for as low as $1,300 to $1,500.
"In 2001, 1.4 million units were sold, from manufacturers to dealers," says CEA spokesman Jeff Joseph. "That exceeded our original projections of 1.1 million. We project another 2.1 million this year."
By early next year, according to the Yankee Group’s Kishore, the price might fall under $1,000.
Will the $1,000 line be the truly significant threshold for this technology to cross? "Actually," says Kishore, "reaching $2,000 was the really significant threshold. Studies have shown that 20 percent of American households are willing to spend that kind of money for a big-screen TV."
As with the selling of other advanced TV technologies, seeing is believing.
"We’ve done some consumer research on this," says Joseph, "and we’ve found that as a general rule, when consumers see HDTV, they love it. It’s very difficult to explain the product verbally, but when they see it, they see the big difference in resolution and clarity compared to analog and non-high-definition digital TV."
There’s still the issue, though, of what consumers will be able to watch once they get the HD sets into their homes. Right now, they can find some HD programming on ABC, CBS, NBC, HBO and Showtime.
Perhaps in coming months programmers will be more motivated to supply HD shows now that more sets are out there.
Allen of Rogers Cable is hopeful that lower-priced sets and a current HD attraction might combine to produce some interesting results.
Originally, Rogers had a supply of 500 digital-tuner boxes that would allow owners of HD-ready sets to receive the advanced signal.
Allen says that the 500 "were taken up very quickly, and we haven’t even advertised the service yet. Once they were gone, there were people on a waiting list.
"Now we have several thousand boxes ready because of the HDTV Olympic coverage from NBC. We’ll see over the next three weeks. Those people who decide they want to see the Olympics in high definition might be signing up."
February 12, 2002 © 2002 Media Life
-David Everitt covers technology for Media Life, writing from Huntington, N.Y.
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