News

3DTV: TOUGH SELL

9/13/2010 4:19 AM Eastern

It's going to be hard getting most consumers off the
3DTV sidelines anytime soon.

People are interested in 3DTV for certain special events and programming, and
would expect to pay an average of $20 more per month to get 3D service from their
pay TV provider, according to a study conducted by Nielsen that was
commissioned by the Cable & Telecommunications Association for Marketing.

But multiple issues - not least of which is the hassle of wearing glasses -
threaten to put the brakes on adoption. Of consumers in the market for a new TV
set, 29% said they would consider purchasing a 3DTV set in the next 12 months.
That means the majority currently expect to stick with conventional 2D
televisions, according to the CTAM/ Nielsen research.

In fact, purchase interest among those planning to buy a new TV in the next
year actually decreased after they saw a 3DTV demonstration, experienced the
glasses and learned more about product costs, said Frank Stagliano, Nielsen's
executive vice president and general manager of TV Primary Research. The survey
of 425 consumers, who first watched a 30-minute reel of 3DTV programming, was
conducted in June and July 2010.

That suggests that most people "will wait until these challenges are addressed
and there is more content available before opening their wallets," Stagliano
said.

To get 3D televisions and content in front of consumers, the Consumer
Electronics Association teamed up with ESPN - as well as Comcast, DirecTV and
AT&T - for demonstrations showcasing threedimensional sports programming at
hundreds of electronics retailers nationwide this past weekend (Sept. 10-12).
Retailers participating in the "National 3D Demo Days" event included Best Buy,
CompUSA, Fry's Home Electronics, Sam's Club, Sears and independent specialty
retailers.

The parties hope that, for consumers on the fence, seeing 3DTV will be
believing. According to CEA research, among consumers who have seen 3DTV, 46%
rated the experience as "excellent" and 79% rated the visual experience
positively.

But of course, even a positive 3D experience doesn't guarantee someone will
ultimately purchase a set. The CTAM/Nielsen study found the most commonly cited
reasons for lack of interest in purchasing a 3DTV include the cost of the set
(68%), having to wear the 3D glasses (57%) and not enough 3D programming (44%).

The need to wear glasses to view 3D content continues to be a big stumbling
block. Overall, 89% of those surveyed felt the 3D glasses would constrain their
multi-tasking activities and 45% expressed concern that wearing the glasses was
uncomfortable.

"I was surprised by the resistance to the glasses," Stagliano said. "We knew it
was an issue, but it really upset people."

About 77% agreed that 3DTV was better suited to special events, such as movies
or sporting events, as opposed to everyday viewing. "People love it more for
special events than regular viewing," CTAM president and CEO Char Beales said.

Survey respondents also indicated they expect to pay more for a 3D television service.
When asked how much they would be willing to pay to add 3D service to their
current TV service plan, on average consumers were willing to pay $20 extra
monthly, but reported a range of $5 to $40 per month. "Right now, it's
difficult to gauge the incremental value" of a 3D programming service,
Stagliano said.

The 425 randomly selected participants first took an online survey that
assessed their prior familiarity and experience with 3D content. They then
watched the 30-minute clip reel of 3DTV content, followed by additional survey
questions about their reactions to the experience. In addition, Nielsen
conducted 12 focus groups of five individuals each, including some families,
interviewed over a four-day period.

According to Beales, the survey is the first with a large group of consumers
who watched 3D programming and experienced it firsthand before they were
interviewed.

September