Will It Be The H-word? Gary Shapiro on HDTV's Consumer Launch Prospects

by Gary Shapiro, President, CEMA
Sunday, March 29, 1998

History will define this era by its movement from analog to digital technology. For television, the most influential and pervasive technology in American society, this shift to digital technology has moved from technical committees to policy wonks to media hype. The next and most exciting stage is the shift to consumer availability.

Moving from the laboratory to the home still requires a few issues to be resolved.

Will it be the H-word?

HDTV, the holy grail of video on television, means full resolution with all its beauty and brilliance of clarity—bringing the fullness of the theater viewing experience into the home. PBS, a couple of networks and forward -thinking broadcasters have already embraced HDTV. So, will there be critical necessary for manufactures to sell HDTV sets? Yes, there will be critical mass. Expect virtually every TV set manufacturer to offer HDTV from the start. The first several months HDTV will be "on allocation"—meaning retailers sell out immediately and fight for the HDTV sets in the pipeline.

HOW MUCH IT WILL IT COST?

The first million sets will sell quickly to sports bars, early adopters and videophiles. After the huge early demand is satisfied and when manufacturing efficiencies are reached, marketplace forces will push HDTV set prices so they are within a few hundred dollars of today's TV sets (of a comparable size).

HOW WILL THE SETS HANDLE MULTIPLEXING?

TV set engineers are figuring out the best ways of making digital sets as easy to sue as today's analog sets. Consumers will still want to channel surf—although on screen guides will be important. Given the high cost of content, the finite advertising dollars and even more finite consumer tolerance for lousy programming—the author believes that multiplexing will be a short-lived experiment as digital set owners will strongly prefer to watch HDTV.

BUT WHAT ABOUT CABLE AND DBS?

HBO's announcement of support for HDTV portends things to come. Cable and DBS will rush to HDTV once they start losing customers. These alternate media are not only competing with broadcast—they are competing against the digital CVR and DVD. These signals will be superior to muliplexed programming and consumers will generally switch to the higher quality program.

COME ON, DO CONSUMERS REALLY CARE ABOUT QUALITY?

Yes, DVD players are a success—despite an almost obscene shortage of quality software.

WHAT FACTORS ARE CRITICAL TO EARLY HDTV success?

Very few items are now uncertain—success is virtually assured. The Model Station (WHD-TV) is doing field testing and consumer and broadcast equipment. (And the equipment works.) Consumer research shows a strong preference for HDTV. The first HDTV signals will be broadcast—so consumers will need antennas (expect some focus on this).

AND WHEN WILL THIS HAPPEN?

The first public focus on HDTV was at the 1998 Winter CES (January 8-11) in Las Vegas where several HDTV set makers will demonstrate prototype products.

Gary Shapiro