Last month the Federal Communication Commission launched a new education/PR campaign called "DTV: Digital Television Get It!" The campaign is designed to help close the cavernous gap between the number of households that have a digital TV set today and the 85 percent of households that are required to make a full transition to digital. While the greatest PR campaign of all time could not help to achieve this goal by 2006 or even 2009, the reality is that consumer adoption of HDTV has made great strides in the past year, and at the same time a different gap has developed among early HD adopters.
New consumer research from LRG finds that the percentage of households that have an HD-capable TV set nearly doubled in the past year, and this is in concurrence with information from the Consumer Electronics Association (CEA). The CEA recently reported that as of the end of June 2004, 11.7 million digital TV units had been shipped since DTVs were first introduced in 1998. In the year from mid-2003 to mid-2004 5.5 million units were shipped, or about 47 percent of the all-time total.
As caveats in analyzing the CEA information, it should be noted that:
*Not all DTV sets are HD-capable sets – as of last year the CEA reported that about 87 percent of DTV sets were HD-capable. *Each set does not necessarily represent a household - LRG's survey found that 15 percent of those who have an HD-capable set have more than one HDTV in their house.
*Not all DTV sets are in consumers' homes - the CEA counts sets shipped from manufacturers to dealers, not sold to consumers. In addition, some sets end up in bars and restaurants and other non-residential locations.
Despite the significant gains made in the evolution of HDTV in the past year, the Sisyphusian goal of full digital conversion clouds the progress. Still more than 90 percent of U.S. households do not have a digital/HD TV set, and 97 percent of TV sets in consumers' households are analog (and this does not even include the millions of TV sets in hotels, motels, bars and restaurants).
Beyond the overall gap of digital TV households necessary to convert to digital, another interesting gap has developed among households that have already purchased HDTV sets. The majority of consumers in households with HD-capable sets are not actually watching HD programming, but they think that they are.
As of the end of the third quarter of 2004, the two leading cable set-top manufacturers (Motorola and Scientific-Atlanta) had shipped close to 3 million HD set-top boxes – with more than 20 percent of this total shipped in the past quarter alone. These boxes have likely made there way into about 2.3 million U.S. cable households.
The number of DBS households with HD converters is more difficult to ascertain, as neither DirecTV nor EchoStar have revealed these totals of late, yet I estimate that the DBS total is around 650,000 households.
*In total, about 3 million cable and DBS subscribers have set-tops that allow them to watch HD programming from cable or DBS. This represents just over a third of HD-capable households actually watching HD programming from cable or DBS.
*Yet LRG's recent study found that two-thirds of cable and DBS subscribers with HD-capable TVs believe that that they are currently receiving HD programming from their cable or DBS company (with an additional 2 percent saying that they are exclusively getting HD programming via a broadcast antenna).
*In other words, there are about 5 million to 6 million U.S. households today with HD-capable TVs that are not watching programming, yet half of this group believes that they are.
While cable and DBS operators are now perpetually focused on acquiring new customers, these millions of existing, high-value, HD adopters are waiting to be hooked up with real HD programming.
Clearly there is a need to educate the general consumer base on the on-going digital transition, but cable and DBS operators should not rely on retailers or the teach their customers about HD. Educating today's HDTV owners on how to get HD programming falls on the shoulders of the cable and DBS operators, and it is worth their while to do so before their competition does.
This is CABL.com posting #137497. Tiny Link: cabl.co/mJVR
