Recordable HD: A Clearer Picture (part2)

[Gregg Lengling]

Could the explosion of new products and formats add to consumer confusion, as seen with past technologies, such as the DVD recorder?    
   
 

But that scenario could evoke memories of the battle between Beta and VHS. In the 1980s, videotape enthusiasts were forced to choose one format over the other; Beta owners were eventually left out in the cold when that format was pulled from the market. Another major format dispute may fuel consumer confusion and retard growth of an exciting new market.

We may not know for years how this format war will be settled or how it will affect HDTV sales. With prices of the new DVD players expected to start at more than $1,000, many consumers will probably shrug at first, regardless of whether there's one format or two. Plus, Hollywood is concerned that neither format offers significant copyright protection for their films. The studios are expected to push hard for more anti-piracy software in each format before signing off, which could delay launch dates.

Services Abound

In 2003, cable and satellite TV operators made HDTV an important part of their overall marketing efforts. From DirecTV to Comcast, industry officials concluded that many HD viewers would pick a TV provider based solely on its high-def offering. Consequently, the operators added HD channels and expanded services.

For instance, late last year EchoStar launched an unusual package that included a satellite antenna, a high-def receiver and a widescreen HDTV—all for less than $1,000. The aggressive marketing approach reflected the industry's commitment to win over the new HD audience.

In 2004, cable and satellite operators are expanding their focus by rolling out HD receivers that can record HD programming on a hard drive rather than a DVD:
EchoStar's DISH Player-DVR 921, a dual-tuner satellite receiver, combines the features of a digital video recorder with the ability to receive and record HDTV. The set-top can record up to 180 hours of standard-definition TV and 25 hours of high-def programming as well as pause live TV and fast-forward through commercials.
At press time, DirecTV was scheduled to launch its TiVo HDTV recorder in March 2004. The set-top, which also includes a DirecTV tuner, received an award at the 2004 International CES show for best new innovation in the satellite TV category.
Scientific-Atlanta's Explorer 8000HD DVR box must be leased through your cable operator, unlike the satellite boxes, which can be bought at retail. Despite the cost of acquiring the receivers from Scientific-Atlanta, cable operators believe the investment will result in new subscribers.
"The combination of HD's incredible video and audio and the ability to watch television on your own time creates a fantastic entertainment experience for our customers. The payback on our investment in digital, high-definition and DVR capabilities comes in two ways: highly satisfied customers and new avenues for revenue and growth," says John Lochner, vice president of marketing for Time Warner Cable in Green Bay, Wis., one of the early test markets for the new set-tops.

Michael Harney, corporate senior vice president and president of Subscriber Networks at Scientific-Atlanta, says the recorder will help cable operators in their battle against the satellite industry. "Our Explorer 8000HD high-definition digital video recorder product offers a tremendous opportunity for cable operators to aggressively go after and win back satellite's best subscribers," he says.

Comcast clearly agrees. The nation's largest cable operator plans to offer Motorola's HD recorder to 90 percent of its subscriber homes by the end of 2004.

Over the past few years, the cable–satellite war probably has done more to fuel the growth of new TV technologies than any other factor, be it HDTV, DVRs or video-on-demand. The launch of the HD recorder—coupled with the expansion of HD channel lineups on both cable and satellite—should help boost sales of HDTVs in 2004.

Although viewers will not be able to record an HD show on a disc, they will be able to store it on the hard drive. Playing it back for friends who may not own a high-def set should generate more word-of-mouth for HDTV. Plus, the ability to record high-def programming will likely make the current HD owner even happier—and more likely to recommend the technology to others.

And unlike the DVD format war, the HD recorder should not add to consumer confusion, since all of the set-tops offer basically the same features. Consumers simply have to pick a TV provider, something they have been doing for years.

What's New?

In 2003, JVC introduced the world's first HDTV camcorder for consumers. Priced at more than $3,000, the JY-HD10U can record HD videos in the 1280 x 720P or 480/60P mode. The recordings are stored on Mini-DV cassettes, capable of up to 63 minutes recording time, and they can be played back on an HDTV monitor.

The HDTV camcorder is a significant advance because it should encourage greater interest in the technology. After buying a new HDTV—and getting an eyeful of the spectacular picture—many consumers will be curious to see how their home movies will look in HD. And they will be eager to share those pictures with friends.

The JVC camcorder is a bit pricey for most consumers. But prices will come down as other manufacturers enter the market.

Moving Forward

Most industry analysts think that 2004 will be a breakthrough year for HDTV. Until now, many people have believed that high-def sets cost too much and there wasn't enough HD programming to justify the expense. But prices are plunging, and most cable and satellite TV operators will likely offer up to 20 different HD channels by year's end.

The launch of recordable HD products and services will help fuel even greater awareness of the technology. And if the DVD format war can be resolved in the coming months, the industry could have an even greater year in 2005.