Five Predictions for HDTV

[wisconsin00]

Will High-Definition TV be in every home by 2010? Don't bet on it.
By Phillip Swann

Santa Monica, CA (July 4) -- High-Definition TV, which delivers crystal clear-images on big-screen sets, is expected to revolutionize the TV industry.

However, despite dropping prices, HDTV-enabled sets are still in
just six million homes, according to the Consumer Electronics Association. In addition, even fewer viewers have digital tuners that enable them to watch shows broadcast in high-def.

So, what is the future of High-Definition TV? Here are five predictions.

1. The Cable-Satellite War Will Boost HDTV Sales
The cable TV industry was slow to launch HDTV channels. However, under pressure from the federal government -- and competitive pressures from satellite TV operators -- cable operators this year added HDTV services in most major cities.

DIRECTV and Echostar, the nation's two satellite TV operators, have offered HDTV for a few years. And, both companies are expected to increase its HD lineup in the second half of this year. However, DIRECTV and Echostar do not have the bandwidth to offer HD feeds of local channels. Cable, however, does and you can bet that cable operators will exploit this in the coming months.

The HDTV audience is not large, but it has money. Both cable and satellite operators know that high-def owners are more likely to subscribe to premium movie channels and other pay packages. So, the cable-satellite war will lead to more HDTV feeds getting on the air. And that will encourage more consumers to buy an HDTV set.

2. Sports Will Drive HDTV Sales
For some reason, most retail stores display HDTV nature shows on demonstration sets on the floor. I have never understood this. The Discovery Channel, for instance, is a sensational HD channel, but no one is going to spend thousands of dollars to get a better view of the Albanian bumble bee.

The retail outlets should broadcast ESPN HD or Mark Cuban's HDNet, which has a heavy sports lineup. Sports can -- and will -- drive HDTV sales because the early buyers are largely male.

There is a precedent for this. DIRECTV began its meteoric rise in the mid 1990s when it added the NFL Sunday Ticket, the exclusive package of pro football games.

When a sports fan sees a game broadcast in high-def, he will be hooked.

3. HDTV Recorders Will Drive Sales
Sony, TiVo/DIRECTV and Echostar have all announced plans to launch high-def recorders later this year. (Thomson and Zenith have already introduced DVRs that can record up to nine hours of high-def programming.) The HD recorder will encourage more consumers to buy HD sets. Americans have become conditioned to believe that they should be able to record anything. The lack of a recording feature has tempered enthusiasm for the new technology among some viewers.

4. The Networks Will Soon Increase HDTV Programming
To date, there are less than 15 channels that offer high-def programming. The relative lack of HD content has had a negative impact on sales. Why buy a $3,000 set if you don't have anything to watch?

However, ESPN has just launched an HDTV network and Bravo is expected to follow suit in the coming weeks. Fox, which is owned by Rupert Murdoch, has announced plans to add HDTV programming to its primetime lineup in 2004.

Other networks, which have been hesitant to invest in expensive HDTV production facilities, will soon change their tune to keep pace. Starz, for instance, just announced that it will soon launch an HDTV channel. The movie network, of course, competes with HBO and Showtime, which have already launched high-def channels.

5. HDTV Will Not Replace Analog TVs By 2010
Some industry officials have expressed hope that the Digital TV will be in every home by decade's end. Despite increasing sales -- and the Federal Communications Commission's mandate to push Digital TV -- high-def sets will be in no more than 50 percent of American homes by 2010.

That may sound disappointing, but no technology becomes a household staple overnight. Many Americans are simply not interested in buying a new set, no matter how much better it is. They like to buy one set and hold onto to it for years. In time, they will come around, but it may not be this decade.

HDTV will indeed change the TV industry and, in many ways, our culture. And, factors such as dropping prices and increased programming will continue to boost sales. However, HDTV growth will be slow but steady.