Ubercool

The Real Trend of 2008: HDTV

February 4th, 2008

While it seems that every self-anointed sage and her brother had a list of predictions for 2008, savvy trendwatchers know that trends don’t adhere to calendar years. There’s one trend, however, that will reshape the U.S. market in the next year: HDTV. Most trends are initiated by human- or technology-related events, but this decade’s biggest media revolution is propelled by none other than the U.S. government.

The Federal Communication Commission (FCC) mandated that U.S. analog television broadcasting cease by February 17, 2009. Worried that unwitting consumers might be caught unprepared by this digital switch, the FCC also instructed stations to air ads to notify viewers of the impending change.

As a result, consumers will not be able to watch TV without hearing about the digital TV transition, and the remote possibility of losing reception after the switch.

A few days before the start of the Las Vegas Consumer Electronics Show (CES), Warner announced that it would support the Blu-ray format exclusively, virtually sealing the fate of HD-DVD and unlocking more hi-def sales. This will help such new players as the Philips BDP7200, which ships any day now for $400.

We say remote because the transition will only directly affect the 12% of U.S. TV households, about 13.5 million homes, that receive over-the-air broadcast signals, according to The Nielsen Co. The Consumer Electronics Assoc. (CEA) reported on December 28 that 50% of U.S. households, or 56 million, already own a digital TV set, virtually all of whom likely receive TV via cable or satellite.

Households that potentially could “go dark” have an option: continue watching an older TV with analog tuner and buy a converter box. The U.S. government will help people pay for converters, offering all households as many as two coupons, worth $40 each, to cover some of the price.

It’s a trend that perhaps arrived with the supermodels but thin is in. One big flat-screen phenomenon this year is the “thin bezel.” As the Toshiba XF550U shows, thinner bezels result in more attractive sets that offer far smaller footprints, another major motivation to upgrade.

So, it’s a safe bet that sales of digital TV converters will explode by year-end. Yet despite the fact that most U.S. households will be insulated from the February 2009 digital switch, the sheer noise generated by the media about the impending “death of analog” will lead many to consider buying a new digital TV or upgrading existing gear.

Surveys show that less than 20% of Nielsen’s 112.4 million U.S. TV households, some 18 million homes, actually watch HDTV today, either due to the complexities involved or because HDTV owners believe that watching DVDs constitutes “HD.” The media’s educational campaign is likely to help change that scenario, which is good news for marketers and broadcasters alike.

Marketers will profit because they will finally have an incentive to produce all their commercials in HD. Despite the fact that it’s not a technology player, Target was the first company to broadcast a TV commercial in native hi-def on January 23, 2005 during an episode of Desperate Housewives. Apple followed with an iPod ad in February, proving that being a trendsetting company does not a pioneering marketer make.

Next year, Pioneer plans to sell plasma displays that borrow ideas from this prototype shown at the Consumer Electronics Show this past January. The next-generation Kuro shown was 9mm deep, 2mm thinner than the iPhone.

The Super Bowl points to the shifts taking place due to HDTV’s growing popularity. The 2005 Super Bowl featured 28 high-definition TV commercials by our count. A year later that figure rose slightly to 30 HD spots, according to SPOTBOWL. In 2006, HDTV-native advertising made up 45% of Super Bowl advertising. By contrast the 2008 Super Bowl featured only four national TV spots broadcast in SDTV, out of a total of about 60 network TV commercials shown.

Surprisingly, one of the laggards included Victoria’s Secret, a company that could have materially benefited from an HD spot, given its superb placement in the final moments of a close game. A new U.S. consumer survey discovered that 5.5 million households purchased an HDTV set for the first time during the 2007/2008 holiday and Super Bowl season, boosting U.S. household penetration with at least one HDTV set to 25%, or 28 million.

Welcome to the real trend of 2008.

Ubertrends: Digital Lifestyle, Voyeurgasm, Generation X-tasy
Value Propellants: Experience, curiosity, convergence, indulgence, performance, reality

Entry Filed under: Consumer Electronics