HDTV Summit ? Over the Hump?
By Joe Paone
The prevailing message of the eighth edition of the Consumer Electronics Association's (CEA) HDTV Summit — a gathering of CE manufacturers, content providers and lawmakers held annually in Washington, D.C. — seemed to be, "HDTV, you've come a long way, baby. But we've still got a few tall hurdles to overcome." For residential customers who see HDTV as a killer app for their home installation, and for the C-tailers who hope to sell it, the news isn't perfect, but it's getting better all the time.
SILVER LININGS WITH CLOUDS
Among the major difficulties cited was the content providers' reluctance to continue churning out programs without a broadcast flag or similar safeguard against unauthorized reproduction. This position, unfortunately, is at loggerheads with the manufacturers' reluctance to make their products unusable, or at the very least, too restrictive. Other obstacles to the transition, said panelists, include confusion, misinformation and a lack of HDTV education among many consumers; the role and stance of the federal government in the transition; and continuing consumer-hostile battles between the cable industry and the broadcasters over HDTV carriage.
The panelists agreed that HDTV sales are getting brisker, even within the weak economy. Sean Wargo, director of market research for CEA's eBrain Market Research, said 2.7 million HDTV units were sold in 2002, which beat the CEA's forecast by 600,000; total revenues were $10 billion. DTV wholesale pricing continues to scale downward, reported Wargo; the average price was $3,147 in 1998, $1,693 in 2002, and is forecast to go down to $1,441 in 2003, and $1,134 in 2006. "And it may come down further as low-end vendors enter the market," he said. Most in the industry see the $500 to $600 range as the sweet spot for the mass market.
IT'S ABOUT CONTENT, STUPID
The imminent launch of ESPN's HD channel had many attendees excited. CEA President and CEO Gary Shapiro said the launch of ESPN HD is a "critical announcement" that will significantly energize the mass market's interest in HDTV. Bryan Burns, vice president, strategic business planning and development for ESPN and the head of ESPN HD, said demand for sports programming is tangible. "I'm hearing just a lot of 'Bring it on, it doesn't have to be perfect.'"