News Analysis
8 Steps to Better HDTV Sales
If you're in the High-Definition TV industry, this is must reading.
By Phillip Swann

Washington, D.C. (March 10, 2005) -- Next Tuesday,  I will be a speaker at the Consumer Electronics Association's HDTV Summit in Washington, D.C. My remarks will focus on why more Americans haven't purchased High-Definition TV sets. To date, only 12 million homes have HDTV-ready sets -- and less than five million people have purchased or leased the high-def tuners that are necessary to display HD signals.

In advance of my speech, I want to lay out what I think the industry needs to do to improve HDTV sales. Here are eight steps to putting High-Definition TV in every American household:

1. Promote Lower Prices
Over the last few years, prices of some HDTV sets have dropped nearly 50 percent. For instance, you can now buy a name-brand 52-inch HDTV-ready rear-projection set for approximately $1,200. That same set was priced at nearly $3,000 just a few years ago.

However, electronics stores, such as Best Buy and Good Guys, rarely mention the dropping prices in their print and TV advertisements. The retailers choose instead to emphasize the new flat-screen sets, which still cost thousands of dollars. The reason is simple: They make more money on the more expensive sets.

However, the heavy promotion of the pricey flat-screens leaves the impression that all HDTV sets are still cost-prohibitive. Consumers never get the message that many high-def TVs are now affordable. For the benefit of all, the retailers need to include both low-end and high-end HDTVs in their advertising campaigns.

2. Get Women to Buy Plasma TVs
Despite what I just said, the flat-screen TV will help generate greater awareness and interest in HDTV. Whether it's a Plasma or a LCD, the sleek set provides a great look and a great picture. With some sets measuring less than four inches deep, the thin TV fits beautifully in any living room, unlike some clunky rear projection sets.

Research and industry officials say that women, in particular, are attracted to the flat-screen set because it makes good fashion sense. With many men already sold on buying a new high-def set, the industry should focus its flat-screen advertising campaigns on women. In households where women are fearful that a bulky set will destroy their decor, the flat-screen could make the difference.

3. Promote the 'HDTV Effect' to Women
The HDTV picture is so clear that you can see the facial imperfections and aging signs of actors and other TV personalities. For instance, Cameron Diaz, who is often listed as one of Hollywood's most beautiful actresses, looks like a different person in HDTV due to her longtime battle with acne scars. As more people buy high-def sets, the ''HDTV Effect' could change our perception of who's beautiful and who's not.

Women, who tend to appreciate Hollywood gossip more than men, might be more interested in HDTV if they knew that they could suddenly see their favorite celebrities as they look in real life. The industry should do more to promote the HDTV Effect -- and its entertainment value -- to females who are now reluctant buyers.

4. Promote the Educational Benefits
A recent HDTV owner told me that he's amazed at how often he watches the high-def documentaries on Discovery HD Theater. "I wouldn't normally watch them because they can be a little dry, but the picture is so unbelievable that you can't stop looking at it," he said. "It's gorgeous."

Indeed, HDTV is giving new life to the travel and nature documentary. Whether it's on Discovery, INHD or PBS, an HD produced documentary offers a more emotional and engaging experience for the viewer. The subject matter may be educational, but the life-like picture is pure entertainment because you feel like you are a participant.

The HDTV documentary can be a great tool to get children more interested in learning. And, consequently, it can be a great tool to get more parents to buy HDTVs.

5. Keep Emphasizing Sports to Men
Men love sports, but they really love them in HDTV. There's nothing like watching a football or baseball game in high-def. For several years, retailer ads have stressed the benefits of watching sports in HD. To keep males interested, the industry needs to keep beating that drum.

6. Stop Promoting Arcane Terms
LCD. DLP. SED. TFT. PDP. Enough already. In fact, BFD, if you know what I mean.

The industry loves to use three-letter acronyms to describe new High-Definition TV models, such as DLP for Digital Light Processing or LCD for Liquid Crystal Display. However, the arcane terms do nothing but further confuse consumers who are already baffled by the buying process. For instance, many people have personally asked me whether they should get an HDTV or a DLP, as if the two were different types of televisions. (DLP is simply the technology used to deliver the HDTV signal.)

The industry needs to de-emphasize the tech talk and start communicating in a way that average folks will understand.

TV manufacturers now believe that the three-letter terms gives them an edge at retail. For instance, some believe that consumers may be more likely to buy a LCD than a DLP. But trust me, guys, real people don't think that way. They go into the store to buy a High-Definition TV and when they start hearing the three-letter acronyms, they get confused. And when they get confused, they don't buy.

The industry should promote brands, not acronyms.

7. Pass a 'Drop-Dead' Deadline for the Digital TV Transition
In 1997, the federal government passed a law that says that local TV stations must switch from analog to digital signals by the end of 2006. In theory, you would need a Digital TV to get your TV signals at that time. However, the law has a big loophole. The switch will only occur in a market where 85 percent of its residents have the capability to get digital signals. With Digital TVs in less than 15 percent of U.S. homes, it's highly unlikely that the switch will occur for several years.

Consequently, most consumers have not taken the transition very seriously, which is why they haven't purchased new digital sets capable of receiving high-def programming.

Congress should pass a new law that sets a firm deadline for the transition, with no qualifying language. Rep. Joe Barton (R-TX), chairman of the House Energy and Commerce Committee, wants to keep the current date as that deadline. But I think that's unfair. The American people -- and the industry -- needs more time to prepare for a real transition. For instance, set-top makers will have to mass produce inexpensive converter boxes that would enable people to get TV signals if they can't afford a new digital set.

I believe that the digital transition date should be moved to January 2009. And, it should be a drop-dead date. All signals would be switched to digital at that time -- regardless of whether everyone has a new set or converter box. People respect real deadlines. I believe they will respond accordingly by getting the necessary equipment.

8. Launch an Educational Campaign for Digital TV
To encourage Americans to support the transition, the federal government should launch an educational campaign on Digital TV and HDTV. Although everyone knows that the feds are really pushing the transition so they can auction off the analog signal spectrum to help reduce the deficit, the feds should let Americans know there will be real benefits for them. The campaign could emphasize the improved HDTV picture and the interactive capability of digital television.

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The Chicago Tribune, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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