HDTV: When the Barriers are High, Adoption Takes a While

Categories: New TV Technology,Satellite TV

Written By

September 16th, 2007

But HDTV will get there, and sooner or later we won't even remember a time when we didn't have it.  That's going to be later rather than sooner though because the barriers for HD are still very high.

I wasn't that surprised to discover that only 10.7 million homes in the US currently have all the proper hardware  and are subscribing to HDTV services from their satellite or cable providers.    Contrast that with the Consumer Electronics Associations bold prediction that by the end of this year there will be 52 million homes with HDTVs and you'll realize that the cart is indeed a little bit ahead of the horse. 

Either that number is wrong, and wrong by about a factor of 2, or come the end of the year of those 52 million homes, only a mere one-fourth of them will be watching non "over the air" or OTA content.  And that assumes that the existing base of those subscribing to an HD package will grow by 20% in just a little over 3 months.  I know where I'll be on that one come the next "Oddsmakers" game with Gorman: 0% likelihood of that happening.

I live in a bad zip code to get a good feel for these numbers.  Everyone around me has HD.  I look out my window at night and see a sea of big screens pumping out crystal clear content.  And it looks good from even across the street.  I run into kids half my age who will tell me, "Ha, I just bought a new 50" plasma!"  I'm quick to say, "You need to call Comcast and get the HD package and a new set-top box!"  Their responses generally are, "Psh, I was on the phone with Comcast while I was still in Best Buy!"

But San Francisco is a special place and with only 10.7 million people subscribing to HD services it obviously doesn't work like that in most other areas of our nation.  Even if the CEA is wrong by 50%, that still means less than 50% of the homes with HDTVs  actually are subscribing to any HD services.

I'm not really too surprised. The first time I connected to a network with a modem on personal computer in 1982, I thought it would be very big.  By the time I saw AOL's early incarnation via Quantum Computer Services Q-Link service for the Commodore 64, I thought, "wow, this is going to be HUGE!".  Mass adoption didn't start kicking in until around 1997.  The barriers were high with that as well.  First, at the time, the cost of personal computers was still pretty high. In the early days of the 1980s and until the mid 1990s, access to the networks was also very expensive.  And let's not forget that the knowledge curve at the time was pretty steep.  Not everyone knew how to use a personal computer.

I had my first HD set-up in late 2002 via DirecTV on a Pioneer elite 50" plasma.  It was gorgeous and I was blown away.  I had the feeling that it would be a big deal, though I didn't have the same sense that I had with online services, the Internet and the Web.  Personal computers hooked up to the Internet brought a lot of new utility.  HD on the other hand merely makes something we're already very familiar with much better.  HD has more than its fair share of barriers.  First, there's the expense of the televisions themselves. 

While the prices are falling, you're not going to find a high end 1080p 42" plasma screen for under $1000.  The good news, however, is you can now get a low-end 720p plasma screen for even under $800. What's the difference between 720p and 1080p?  It has to do with the maximum resolution of the set.  Much of the so-called "HD" content (even when you subscribe to an HD service) is broadcast in 720p, but the bigger this number, the better the resolution. 

The level of complexity is a barrier. The price is a barrier. Having to call your cable company to pay more is a barrier.  Having to have a new satellite dish, buy a new set-top box AND pay your satellite provider?  All big barriers.

I believe full-on mass adoption kicks in when the highest-end 42" screens are $1000, but I may be wrong and it could be that just having 42" screens under $1000 will start to tilt the scales. 

The highest end 40" (not 42") Sony Bravia retails for about $2800 as of this writing.   Sony's cheapest 40" Bravia, which can be had for around $1400 and is not full 1080p (1080p = an output resolution of 1920x1280,  the low-end Bravia, which is certainly on the high-end of the low-end -has a resolution of 1366x768). Sony's cheapest Bravia with 1080p can be had for around $1600.  So already you see some of the problem. It's confusing as hell from a product/pricing standpoint. 

Still, I have to admit that I find it puzzling that after paying all that money for a spiffy new HDTV, that more than half of the buyers aren't worried about actually receiving HD content (or are satisfied by what they can get OTA). Or perhaps they're completely using their TVs to playback high definition DVDs.  For now, it remains a mystery and a huge growth opportunity for both the satellite and cable companies.  I suspect more so for the cable cos.  Either way somebody is coming to your house, but with one method you just rent the box and they install it as it works with the cable companies.  With satellite, you have to buy hardware (the right dish for your roof and an HD set-top box).  

I think it's a fairly big opportunity for the cable companies.  Gorman and I aren't in full lock step on this one, he believes, especially in the case of Comcast that they'll focus on marketing the broadband Internet and telephone services.  While I agree with that, I think they'll give HD more focus.  On the heels of what is bound to be a fairly big marketing effort by DirecTV to launch their new service with over 100 HD channels, the cable companies can reach out to that more than 50% crowd who has an HDTV but is not subscribing to content.

The subscription is about $10/mo on Comcast, and another $10 if you want their HD DVR.  The broadband Internet and telephone offerings are more expensive, and a harder sell, especially for people who already have broadband and telephone providers.  More than 50% of the HDTV homes have no HD provider, it seems like the low hanging fruit.

  • Anonymous

    1080p is 1920×1080 isn't it? Hence, where the 1080 comes from. Not 1920×1280 as you stated.

    WUXGA is 1920×1200 on a computer (16:10) and 1920×1080 (16:9) on a tv.

  • Anonymous

    1080p is 1920×1080 isn’t it? Hence, where the 1080 comes from. Not 1920×1280 as you stated.

    WUXGA is 1920×1200 on a computer (16:10) and 1920×1080 (16:9) on a tv.

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