Yesterday, TWICE reported that Samsung, Sony, and LG will partner with Best Buy on a 13-week consumer awareness campaign to increase interest in UHDTV and ultimately drive sales of 4K TVs.
The campaign starts tomorrow and is named “Believing Begins Here.” The Consumer Electronics Association had a part in developing the campaign, which will feature in-store demonstrations of UHDTV at 50 Best Buy locations in 11 major markets, including Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, Minneapolis, New York, Philadelphia and Washington D.C.
The timing of this campaign is no coincidence. National Football League pre-season games have already started, and the first NCAA college football games are scheduled for August 28. And as we all know, nothing sells big-screen TVs like football!
The demonstrations will take place between 11 AM and 3 PM each Saturday for the duration of the campaign. According to the TWICE story, these three major TV brands (and hopefully others to be added later) “…have chosen the last remaining big-box CE specialty chain as their showcase.” (I’m sure HH Gregg and Frye’s would dispute that last statement!)
Does this bring back memories of the stumbling, awkward effort to promote 3D TV five years ago? It should, except there’s a difference this time around. For one thing, there aren’t any eyewear issues, because there’s no eyewear. Assuming BB does a good job with 4K content selection, anyone who happens to wander by the demo can easily and quickly check it out.
For another, there’s aren’t any “exclusive” 3D Blu-ray deals tied to specific manufacturers and TVs, a strategy that amounted to shooting one’s self in the foot back then. Throw in the battle between passive and active 3D, the eye disorders and vision issues almost a quarter of the population experiences, and a paucity of interesting 3D content readily available to viewers, and the obituary for 3D TV was quickly written.
This time around, Best Buy has decided to emphasize 2K/4K upconversion as a “future-proof” advantage of 4K TVs and will have adequate demos of 2K-to-4K program material to make their point. And to attract potential customers, the usual manufacturer promotions and sweepstakes/drawings will be conducted. Prizes include a 55-inch Sony, Samsung, or LG UHDTV with installation and Geek Squad service plan included. (By the way, a 55-inch Samsung 4K TV can be taken out of the box and up and running in about 5 minutes, based on my experiences at InfoComm during my 4K / UHDTV class.)
The television industry clearly has a lot more at stake in 2014 than it did in 2009. TV shipments have declined for two years in a row, and TV prices are collapsing with each quarter. (You can easily buy 60-inch LCD sets for less than $1,000 now, and LG has already dropped a 55-inch 4K “smart” model to less than $2,000.)
For some manufacturers like Panasonic, the TV business has been de-emphasized in favor of commercial electronics products and even beauty aids and appliances. (Panasonic now sources a lot of its LCD TV glass on the wholesale market from Taiwan and China.) For others like Mitsubishi, the business of manufacturing and selling TV is “history” as their profits slowly but inexorably evaporated to nothing.
One fact that Best Buy and its partners can’t really explain to consumers is the changing dynamics of the LCD panel and television components supply chain. Thanks to an aggressive push by Chinese manufacturers into the television business and an emphasis on 4K, we will soon see ALL TVs larger than 55 inches move exclusively to 4K glass, just as we saw the migration from 720p/768p glass to 1080p about 6-7 years ago.
The good news is; 2K-to-4K upscaling is comparatively easy, as my colleague Ken Werner has pointed out in a previous Display Daily. Some manufacturers are even building upscaling chips into HDMI interfaces and cables! So the Best Buy demos should be effective if they start with strong 2K content.
But there are always unanswered questions. Best Buy now sells Vizio TVs, and according to Vizio’s timetable, they will have a full range of heavily discounted UHDTVs available this fall, starting at $999 for a 50-inch TV and going all the way to $2,999 for a 75-inch set. In the key sizes of 55 and 65 inches, the prices will be $1,299 and $2,199, respectively. How does that price war help the Big 3? And why should Vizio have anything to do with this campaign when they can simply sit on the sidelines for a couple of months and then swoop in and capture sales based on their brand recognition?
More devil in the details: We still don’t have a 4K Blu-ray standard, and every month it is delayed lets more wind out of the BD sails. According to a recent Home Media story, consumer spending on streaming, downloads, and optical discs was flat through the first six months of this year, to the tune of $8.6B in the U.S.
The “details” show us that digital spending (downloads and streaming of movies and TV shows) increased by 17% ($3.6B) over the same time period in 2013. Meanwhile, spending on optical discs (DVD and Blu-ray) continues to drop, falling 8% ($3.3B) in the Y-Y comparison. Additionally, rentals of optical discs dropped 14% ($1.7B) compared to the first six months of 2013. Brick and mortar store rentals took an enormous hit of 33%.
Breaking out the Blu-ray category, the story says that Blu-ray disc sales were up by 10% during Q2 ’14, with new theatrical releases up 18% in the same time period. But that’s not enough to offset the overall decline in interest by consumers to buy or rent optical discs. (No numbers were provided for Blu-ray sales revenues.)
Will 4K suffer the same fate as 3D? Not a chance. As I just pointed out, many of our big screen TVs will employ 4K panels exclusively in the not-too-distant future. The infrastructure for 4K streaming is being built and the sales and rental numbers show consumers increasingly prefer that delivery format to accumulating a pile of discs.
I plan to check out the 4K demos myself in “secret shopper” mode and will have a report in a future DD.
Posted by Pete Putman, August 8, 2014 11:40 AM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.