HDTV: Finally In The Picture For Christmas 2005?

AMSTERDAM, Netherlands — The annual chorus of promises that high-definition television “has arrived” to sweep the viewing public off its feet was sung again at International Broadcast Conference (IBC) here, but came supported this time by two convincing forces — falling prices and government meddling.

Keynote speaker David Hill, chairman of Fox Sports Inc. and president of the DirecTV Entertainment Group, said that because an array of HDTV equipment, especially flat-screen 16:9 displays are finally becoming “mainstream affordable,” there will occur a “massive uptake at Christmas [2005] for HD” by consumers.

But an even stronger catalyst for HD adoption worldwide is that governments from the U.S. to Japan to Australia and Germany are mandating the phase-out of analog television broadcast, to be replaced by digital broadcast, which is increasingly high-definition capable.

Stating the case bluntly, panelist Peter Wilson of High Definition & Digital Cinema Ltd. (U.K.) said, “Regardless of what the market says, the government says that sales are going to increase.”

Perhaps most striking about the perennial HD report-card at IBC is how much nostalgia can be generated by a technology barely 15 years old. Most of the panelists slipped into fond reminiscence about a course of HD development that has never run smooth. Yukihiro Nishida of NHK-Japan, the broadcaster that started HD with its Hi-Vision effort in the late 1980’s, recalled the excitement of developing the cumbersome analog MUSE HD system.For his part, keynoter Hill waxed sentimental about the first “HD” Super Bowl halftime show in 2002, when U2 performed in “wide-screen digital enhanced-definition” at a not-quite-HD resolution of 480 progressive-scan pixels per line.

But all the technical improvements in HD have so far failed to generate spending among consumers, largely because HDTV equipment costs too much compared to analog televisions, which most viewers still deem tolerably vivid. That problem, said Wilson, is disappearing. The average price of an HDTV receiver has declined, he said, from $3,147 in 1998 to $1,216 in 2005.

The trend will continue downward to $1,134 in 2006, close to the magic $1,000 threshold. Wilson cited two HD receivers now on the market at under $500. Chinese manufacturers are also trying to produce low-cost HDTV sets.

The lowering of prices has generated a dramatic uptick in sales, according to Wilson. Since 1998, 17 million HD-capable televisions have been sold, but 3.8 million of that total has occurred just between January and June 2005. Total consumer spending on HD technology is close to $5 billion.

In terms of market penetration, Wilson said HD televisions were present in only 17 percent of U.S. households last year, a number that will grow to 22 percent this year and will exceed 55 percent in 2008.

The year 2008 is crucial, because it is the year, according to panelist Byran Burns of ESPN, that sales of digital 16:9 TVs will exceed sales of analog 4:3 aspect TVs by a 12-to-1 ratio.By then, analog television sales will be virtually illegal in many countries. Nishida of NHK noted that by 2007, the Japanese government has mandated the cutoff of analog-to-digital broadcast signal conversion. In 2011, Japan will cease entirely all analog broadcast, both terrestrial and satellite. Similarly, said Wilson, all TV sets in the U.S. larger than 13 inches will be required to include a digital tuner.

ESPN’s Burns was among the panelists who hailed the seemingly inevitable transition from analog to digital TV in epochal terms. “The perfect storm is about to hit the United States,” he said. He predicted that 100 million HDTV sets would be sold by the end of 2008, forcing broadcasters to follow the example of ESPN in offering virtually all TV content in HD.

He said, “Within a few short years, those with HD programming will win the ratings race.”

Hill was even more bullish, insisting that price and government mandates are helpful, but there are no more significant to the triumph of high-definition than the consumer’s desire for a more complete viewing experience. “People will buy HD sets because of a major difference in the perception of what TV is,” he said.

Hill went further, saying that, “There is no doubt that HDTV will revitalize the television audience. But as great as HD is, the true excitement is when every set in the world is capable of receiving 3D television. And we are capable of providing 3-D TV!”— David Benjamin is a Paris-based freelance writer.