Sports help sales of HDTV

[Gregg Lengling]

At the men's NCAA basketball Final Four in Minneapolis last year, fans' attention in the Mitsubishi suite was divided.

"Three or four of the people were watching play on the court," Mitsubishi's vice president of marketing, Bob Perry, said. "The other 14 had turned around and were watching the game on one of our HD sets. The viewing was better."

The images on the high-definition, theater-like wide screen offer such clarity that viewers can make out the faces of fans in the stands. After two decades of bold predictions for success, high-definition sets are beginning to make an appreciable dent in TV sales.

Zenith vice president John Taylor says HD sales are up 43% this year. "Prices on HDTVs have dropped 50% in the last two years and they will drop another 50% in two years."

And the sports industry, as it did in the boom in color TV four decades ago, is playing a major role.

"WGN-TV showed a Cubs game in HD," says Marc Cook, a manager at Abt Electronics in Glenview, Ill. "Our store was packed. People interested in sports are devoted to TV watching. Once they see sports in HD, most people become hungry for it."

Wes Nicholas of Yorba Linda, Calif., got a 65-inch high-definition set. "The HD picture is more clear than if you were standing in the pits watching a car race," he says. "It's the most wonderful breakthrough in TV since, well, the TV."

Pat Coan of Canton, Ga., says his 61-inch flat-screen HD set impressed his son's friends. "One said, 'I don't need to go to sports bars anymore.' "

Though some sets still cost more than $10,000, Samsung and Zenith offer 27-inch sets for less than $800. Larger sets cost $1,500 or more. A 61-inch RCA sells for under $3,500, about the price of an analog big screen a few years ago.

"You don't have to take out a second mortgage to get one of these HDTV sets anymore," says Martin Franks, executive vice president of CBS Network.

Last year, the Consumer Electronics Association projected digital TV, of which HD has the highest quality programming, would be in 2.1 million homes by the end of this year. The reality is that the number of digitally connected homes is approaching 3 million.

Of those homes, only 350,000 receive HD programming, according to the consumer group.

But with HD programming on the rise and the cost of a TV dropping, the original estimate of 10.5 million digital sets by 2006 seems conservative.

ABC has nearly concluded arrangements to carry this season's Super Bowl in high definition. Fox riled advocates this year when it did not televise the Super Bowl in high definition.

CBS has been the most aggressive of the networks in high-definition sports. It televises in high definition the men's NCAA Final Four, The Masters, U.S. Open tennis and a Southeastern Conference football game of the week in addition to the 2001 and '04 Super Bowls. The network hopes to offer the NFL playoffs and other games in HD format this season, Franks says.

If a fan is buying a high-definition TV set to watch sports, HDNet figures to be among the early lures.

HDNet is the country's first full-time HD-only network and is on Channel 199 of the DirecTV satellite service that is in about 200,000 homes.

NBC carried horse racing's Triple Crown live in conjunction with HDNet and handed off the Salt Lake City Winter Olympics to HDNet on a one-day delay.

HDNet combines travelogues, concerts and news with sports: 80 major league baseball games, 65 NHL games, six Arena Football League games, the National Lacrosse League, Ivy League football and basketball, and a few Dallas Mavericks NBA games.

Why Mavericks games? Because HDNet is the brainchild of Dallas Mavericks owner Mark Cuban, 44.

Cuban says he'll invest up to $100 million in the year-old HDNet. He plans a December spinoff of three new premium HDNet channels in sports, movies and entertainment that will be packaged for $10-$12 a month.

"This is like the early days of cable," Cuban said in his office in a restored warehouse in Dallas. "The most successful networks weren't the ones necessarily with the best programming. They were the ones who got in early and grew with the industry. ESPN relied a lot on Australian Rules Football and World's Strongest Man contests, but check where they are now."

Cuban has been able to place HDNet as a customer attraction in 1,600 retail stores. "HDNet is playing all the time on 90% of our sets," Joe Azar of Upstairs Audio in Columbia, S.C., says.

"CBS is clearly in the lead in HD with the Final Four, Masters, U.S. Open and college football," Zenith's Taylor says, "but we tip our hat to Cuban for providing compelling sports programming. HDNet is helping us sell HD sets."

CBS' Franks acknowledges a place for Cuban's HDNet, though he points out the fledgling network will have competition. "As a Princeton graduate, I love that HDNet shows Ivy League football games, but we have the SEC in HD and the Final Four."

Cuban says he has an advantage in not having to protect the outgoing legacy of analog TV.

"We can direct everything toward HD viewers rather than having to serve two masters — the old analog system that the networks still use and HD," he says.

NBC Sports President Ken Schanzer says, "We have a network of affiliated stations, so per-market HD use is very small. We'd like to do as much HD as we can, but it has to make economic sense."

The troubled economy is providing footing for HDNet that wouldn't have existed with a strong stock market, Cuban says

"If this was 1998, I couldn't start HDNet because then if you mentioned a new technology, the stock price would go up 50% in a day. But in this market, if you mention a new technology without a proven business model, your stock price goes down.

"So the major media companies won't invest heavily in HD because the stock market won't reward them for it. It will punish them. It's not easy to raise new capital and invest in HD if you're Fox or Disney. That opens the door for me."

Though Cuban is poised to bolt through the door when the high-definition age hits, it's inevitable that the broadcast and cable networks will join in.

The top 10 cable operators, reaching more than 85% of cable homes, have agreed to a Federal Communications Commission proposal to add as many as five HD channels by Jan. 1. The FCC recently ordered digital tuners to be installed in sets with screens 36 inches or larger by 2005 and small screens by 2007.

The HD boom is expected to peak in 2004, but Mitsubishi's Perry figures the flash point could occur as early as next year.

"When we get to 20 million homes, the ratings will start to have an impact," Cuban says, "and people will rush in to provide more programming. I don't know when that is, but I'll be there."



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Gregg R. Lengling
RCA P61310 61" 16x9
glengling@ameritech.net

[Matt Heebner]

Football. Thats it. Thats the answer. Football. Give the public HD football, and it will be the best thing since sliced bread. I'd be willing to bet that if all the football games both NFL and college were HD, stores would have a hard time keeping HD sets in stock. Look at how big screen TV sales jump at the beginning of football season, and then again before the SuperBowl.
Football is the HD "killer app".
Show football in HD, and they will come.

Matt

[This message has been edited by Matt Heebner (edited 09-01-2002).]

[Gregg Lengling]

I posted another article yesterday that the CBS crew at the US Open will then be doing College Football. So look for College Football on CBS in highdef.  Last winter I saw some archive games on HDNET and it was impressive.


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Gregg R. Lengling
RCA P61310 61" 16x9
glengling@ameritech.net