New York -- Efforts to entice consumers to purchase digital and
high-definition TV sets are -- contrary to speculation from some media
executives and pundits -- yielding dividends.
The growing interest in the sets should trigger cable operators to maximize
their use of retail outlets to take full advantage of the movement, declared
panelists at the opening session of Kagan Seminars Inc.'s latest Digital
Household Summit here Tuesday morning.
Consumer Electronics Association senior industry analyst Sean Wargo estimated
that 4 million households will buy digital-TV sets this year, with at least
double that number doing so in 2003. Many of those sets will be
'The rumors of people not transitioning to digital are greatly exaggerated,'
However, he acknowledged that the ability to meet federal authority
guidelines of having 85 percent of TV sets digital-capable by 2006 'is a
stretch.' Lower set prices and more digital content must get into the
marketplace to fuel increased consumer demand for digital/HDTV sets.
The Federal Communications Commission wants to reach the 85 percent mark so
it can move broadcast-TV signals off analog to digital, freeing up the analog
spectrum for other uses.
Look for cable operators to step up their presence in Best Buy Co. Inc.,
Circuit City Stores Inc. and other consumer-electronics chains, plus such
retailers as Wal-Mart Stores Inc., within the next two or three years to sell
digital, HDTV and on-demand services, added Dwight Sakuma, retail director at
Motorola Broadband Communications Sector.
'They realize they must be in the same point-of-sale as DBS [direct-broadcast
satellite],' he explained.
Retail sales of set-top boxes and services can help operators to grow their
businesses by 10 percent to 20 percent annually, and by 2005-06, cable could
have a booming sales avenue in place, he said.
Also, Sakuma suggested that cable operators offer combo HDTV audio/video
channels so customers get 'a whole high-definition environment.'
If operators showcase HDTV side-by-side with regular TV sets in stores,
they'll have no trouble making sales, said Robert Perry, marketing vice
president at Mitsubishi Digital Electronics America Inc.
'When the customer experiences the performance of HDTV, they are sold. It's
an impulse-driven market,' he said.
Separately, Perry predicted that TiVo Inc., SONICblue Inc.'s ReplayTV and
other personal-video-recorder ventures face a choice -- integrate into digital
set-top converters and digital TVs, or die.
Within three years, 'it will not be an individual product category,' he
added. 'It will be a stuffed feature and a cheap one, naturally expected by the
Wargo and Sakuma agreed with that perspective.
The Digital Household Summit -- the first of Kagan's annual round of
late-summer/fall media forums -- continues here through Wednesday