What's Wrong With HDTV?
The high-def set is still not a household staple in the United States. How come?
By Swanni
Washington, D.C. (February 16, 2009) -- High-Definition TV is an unqualified success with a majority of U.S. homes tuning in a high-def program every night.
Right?
Wrong.
More than a decade after its launch, HDTV has yet to become a household staple in the U.S., on par with such products as the microwave, cordless phone, mobile phone or even the DVD player. Estimates vary, but most studies show that the HDTV is in only about a third of U.S. homes.
Even worse, Nielsen reported last December that only 23.2 percent of U.S. households have the high-def tuners that are necessary to watch high-def programming. Although that number has climbed from roughly 13 percent from a year ago, it's remarkable that so relatively few Americans are watching High-Definition programming. If you listened to industry and cultural analysts, you would think that HDTV was everywhere.
Not everyone is watching HDTV.
But with the deepening global recession, it's possible that HDTV will not reach a majority of U.S. households in the next 5-10 years, or maybe ever.
So, what's wrong with HDTV?
1. Still Too Costly
Despite dropping prices, most high-def sets are still cost prohibitive for most Americans. While you can buy a small-screen HDTV now for under $500, the sets that make people drool -- that make them run to the store -- are still close to $1,000 or more. Even before the recession, that was too much for budget-conscious Americans. During the recession, it's an unthinkable luxury.
2. Old TVs Prevail
Despite the upcoming Digital TV transition (assuming it is upcoming), millions of Americans still own older, non-HD analog sets. They spent good money for them and they still work -- so why update them? Or, at least, that's the view of the analog TV owner. It's a lot cheaper to get a $50 digital converter box (which allows digital signals to display on the analog set) than it is to buy a high-def set. And it's also cheaper to buy a non-HD Digital TV set for $200-300 than it is to throw down the mortgage money on a high-def one.
3. Poor Education
Cable and satellite providers (and the telcos) still surprisingly do little to educate consumers that if they have a high-def set, they need a high-def tuner to watch HD programming. (Roughly one-third of HDTV owners fall in this category.) They seem to think that high-def owners have figured it out.
And TV manufacturers and CE retailers do next to nothing to help out. Their view: They've sold the set so why spend their time and money ensuring that people use it to its fullest?
However, that's a myopic view. If more people had high-def tuners, that would be more people out there in the marketplace spreading the word about HD's wonderful picture and sound. And that would lead to more people buying high-def sets.
4. Not Enough HD Programming
Not enough high-def programming, you ask? How can that be? Aren't there dozens of HD channels?
Well, yes, that's true. But the four major broadcast networks, which still dominate primetime ratings, still produce far too many shows in standard-def. For instance, on CBS, The CBS Morning Show, The Amazing Race, 48 Hours and several other shows are still not in high-def. And on NBC, under spendthrift CEO Jeff Zucker, sometimes the entire primetime lineup is not in HD. For instance, unscripted shows such as Deal or No Deal and The Biggest Loser are delivered in deadly dull SD.
The result is that the average viewer is not as excited about high-def as he could be.
5. The Blu-ray/HD DVD Debacle
The industry's food fight over which high-def disc format would prevail unquestionably hurt the HDTV industry. The high-def disc, which offers a picture superior to anything on cable, satellite or a telco service, is a great showcase for the technology. However, the format war slowed consumer interest in high-def discs -- and now that Blu-ray has prevailed, the studios' stubborn insistence to price Blu-ray movies at $5-10 more than their standard-def editions continues to delay consumer acceptance.
Blu-ray should be a catalyst for selling more high-def sets, but it's often just a reminder of how costly high-def can be.
Conclusion
High-Definition TV has come a long way in the last 10 years. But the high-def industry -- from retailers to TV makers to TV providers to the Hollywood studios -- need to congratulate each other less and start selling more. They need to stop saying that high-def is a success and start admitting that more needs to be done. If they don't, with the current economic conditions, HDTV may have hit a wall.
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Commentary
Bad Week For Plasma HDTV Lovers
Pioneer and Vizio head for the exit door.
By Joseph Whip
Special to TVPredictions.com
Washington, D.C. (February 15, 2009) -- It goes without saying that It has been a really bad week for for flat panel manufacturers, especially those that manufacture Plasma HDTVs.
The biggest news, of course, is the demise of Pioneer, who was the industry leader in the entire flat panel industry in terms of image quality and performance with their Kuro line.
These sets will be missed and the fact that their 10th generation panels featuring ultimate blacks will never be released is a real shame. I saw a prototype at the 2008 CES and I can say without hesitation that it produced the finest image I have even seen.
Hopefully, given that many of the engineers who worked for Pioneer are on that project now work on Panasonic's R & D team, we will eventually see that level of quality on a Panasonic or some other plasma display manufacturer, if any plasma manufacturers survive.
The problems with Pioneer's business model were clear. First, they dropped out entirely from the 42-inch Plasma market which is by far, the largest segment of the market.
Abandoning the largest segment of the plasma market to Panasonic and Samsung was a huge mistake. The second biggest mistake was their premium pricing. While their sets were clearly the best on the market, they were not THAT much better to most consumers to warrant the premium price. This mistake was clearly underlined by the recent sale at Best Buy and other retailers on the 50-inch 5020 as well as the Elite 111, which are now almost sold out nationwide. Priced competitively, they flew off the shelves. Get one if you can!
Had Pioneer been more aggressive in their pricing a year ago, especially considering the falling economy, perhaps they would be in a much better position than they are today.
The third mistake was in restricting their sales outlet. Clearly, if they had a larger footprint in terms of dealers, they would have sold more product.
Fourth and finally, their Kuro advertising campaign was abysmal. All of these factors worked together to depress sales of their displays and greatly diminished their market share, despite their superior quality. Pioneer once again proved that you need more than the best quality product to succeed, especially in tough economic times, where the quality to price ratio is even more important.
However, there was even more disturbing news this week. First there is the announcement by Vizio that there were exiting the plasma market, as the plasma sets didn't sell as well as LCD's in store as LCD's are brighter and do better in a really bright store.
While Vizio will continue in the LCD display market, I wouldn't expect them to succeed there either as their business model is clearly broken due to the rush to the bottom in terms of pricing by the tier one brands such as Samsung, Sony, Sharp, LG and Toshiba, all of which have better products at similar products as Vizio.
While Vizio was able to gain traction with cheaper products when flat panel prices were priced at very high levels, that is no longer the case. Unless Vizio can innovate and offer superior products, they will go the way of the Dodo bird by the end of Q1 2010.
Looking at the recently announced financials, all the of the flat panel operations are being flooded with red ink, whether they are plasma or LCD manufacturers. While Panasonic has increased market share, they have announced that their new plants will open months later than previously announced and that they will scale back their production of all their flat panels. Sony is also hemorrhaging money not only in their flat panel division but in their gaming/PS3 division as well. NEC has also announced that they are getting out of the LCD market, The same with Hitachi. In short, this economy is killing the entire flat panel industry across the board.
While the plasma market seems to taking the biggest hit at this time, the LCD market is taking quite a hit as well. My guess at this point is that by the end of Q1 2010, you will see several other flat panel makers announce that they are getting out of the business and that the ones that are left will be further scaling back production and slowing the pace of more costly product innovations, including OLED panels. It is quite possible that today's Pioneer Elite panels will not be surpassed in terms of image quality for the next 2 or 3 years. Given the incredible leaps in picture quality that we have seen in the past
Two to three years in both plasma and LCD technologies, this would be a real shame and the lasting legacy (in regards to the flat panel and Home Theater business) of the economic downturn that began in the latter half of 2007. It will effect all technologies, not just plasma. Clearly, when the carnage of this economic downturn is over, there will only be a few flat panel manufacturers left which will likely mean less selection and higher prices points across the board.
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Digital TV: The Screw-Up Continues
Officials fighting over coupon funding; the FCC feels the heat on stations going digital early. And so on and so on.
By Swanni
Washington, D.C. (February 12, 2009) -- The federal government's plan to switch all full-powered local TV stations from analog to digital signals had another tough day on Tuesday. Here's a summary of the action:
Obama Signs Delay Bill 'For Consumers'
President Obama yesterday finally signed legislation that officially moves the transition date from Feb. 17 to June 12 -- a full week after Congress passed the bill. During the week when Mr. Obama ignored the bill -- a bill he urged Congress to pass -- federal agencies seemed confused about when the transition would actually occur. The National Telecommunications and Information Administration actually listed the transition occurring on two dates on its web site -- Feb. 17 and June 12.
The president delays the DTV transition -- well, sort of.
Mr. Obama yesterday issued a statement explaining why he signed the delay bill:
"During these challenging economic times, the needs of American consumers are a top priority of my administration," the president said. "This law, which was crafted in a bipartisan way and passed overwhelmingly in the House and Senate, ensures that our citizens will have more time to prepare for the conversion."
But Some Consumers Won't Get a Delay
However, despite the president's assurance that citizens would have more time to prepare, Reuters reported yesterday that 40 percent of local stations planned to switch to all-digital by Feb 17 anyway.
If they proceed, it means that their viewers will need to be ready with converter boxes, a Digital TV or a pay TV service by next week -- not four months from now as the president just promised.
"Regulators were caught off guard by the steep number of stations that want to transition early, even after lawmakers delayed a mandatory nationwide switch to 'DTV' by months,"Reuters wrote.
Perhaps embarrassed -- as well as caught off-guard -- by the large number of stations getting ready to go all-digital, acting FCC Chairman Michael Copps held a press conference yesterday to say that the agency will review the list of stations planning to make the switch early. He said the FCC may even stop some of them from switching.
"We are six days from the most demanding consumer technology transition in the history of broadcasting," Copps said, referring to the old Digital TV transition date of Feb. 17, which actually could still be the current transition date for hundreds of local stations.
So, the FCC has six days to determine whether some local stations can go all-digital early. Well, actually, that's not true. Because the transition date was scheduled on Feb. 17, the agency has already permitted roughly 150 stations to switch to all-digital signals.
There's no bringing them back.
Congress Fights Over Converter Box Funding
And finally yesterday, Democrats and Republicans yesterday fought over a provision in the Economic Stimulus Bill that would allocate another $650 million for the federal government's digital converter coupon program. (The program has run out of funds, leaving many consumers hesitant to buy the converters. The coupon is worth $40 while most converters cost between $50 and $75.)
Broadcasting & Cable Magazine reports that a compromise has been reached in a House-Senate conference committee that will allow the $650 million to stay in the bill, although many Republicans say it won't "stimulate" the economy or create jobs. However, it remains to be seen if the funding will make it to final passage.
Without the funding, it's likely that a portion of the seven million Americans who have yet to prepare for the DTV switch will continue to stay on the sidelines.
The actions described above took place on one day. And now we have four months more to go before the next transition date.
Good luck to us all.
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Vizio to Stop Producing Plasma HDTVs
The discount TV maker will focus exclusively on LCD.
By Swanni
Washington, D.C. (February 11, 2009) -- Vizio says it has stopped producing Plasma High-Definition sets and will now concentrate entirely on its LCD series, according to the New York Times.
In an article published today, Vizio's co-founder, Laynie Newsome, told the newspaper that the company is nearly out of existing Plasma inventory, although it's still selling Plasma sets at its web site. And the low-cost TV maker has no plans to resume Plasma production.
Newsome explained the company's decision by saying that Plasma does not sell as well as LCD in part because its picture does not look as good in retail showrooms. Generally, Plasma sets look better in dark rooms while LCD sets fare better in well-lit rooms, such as electronics stores.
Vizio's decision is another blow to the Plasma HDTV which has lagged behind the LCD in sales over the past two years for a variety of reasons. Vizio has become a top seller of new TVs because of its lower prices and consumer-friendly promotions.
The Times notes that Vizio's departure leaves just three large-volume Plasma makers in the United States: market leader Panasonic, Samsung and LG Electronics.
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Sony to Offer PS3/Blu-ray Combo Disc
The discs would enable PS3 owners to use both features.
By Swanni
Washington, D.C. (February 11, 2009) -- Sony says it will introduce combo PlayStation 3 game/Blu-ray movie discs later this year, according to an article by Video Business.
The publication reports that the combo discs will be designed to broaden the appeal of the PS3 which has lagged in sales behind Nintendo's Wii and Microsoft's XBox 360. Sony also wants to emphasize that its game console can play high-def movies as well as games.
Video Business writes that the combo disc would also allow PS3 owners to transfer the film to view on a PlayStation Portable.
“We are actively pushing, and the way that we see the future is that the movie and the game are placed on the same disc,” John Koller, director of hardware marketing for the PS3, told the publication. “There are a lot of developers who say, we have this game based on a movie, wouldn’t it be great to marry these concepts? We will definitely see this stuff this year.”
The executive did not say when the combo discs would be available, but he said two or three could launch this year. He also did not offer specific pricing for the combo discs.
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News & Commentary
TV Stations Ignore Obama, Congress on Digital TV
Roughly 40 percent of local stations will go digital early despite the president's pleas.
By Swanni
Washington, D.C. (February 11, 2009) -- At the urging of President Obama, Congress last week passed legislation to delay next week's scheduled Digital TV transition from Feb. 17 to June 12.
Mr. Obama is expected to sign the bill shortly. But the Associated Press reports that 40 percent of local TV stations will switch to all-digital signals on or before Feb. 17 anyway. This is despite protestations from the Obama administration and lawmakers that the early switch will confuse consumers.
Nielsen estimates that roughly seven million Americans are not ready for the switch, meaning they have not purchased digital converter boxes or Digital TVs or signed up for a pay TV service. If their local stations go digital early, they will lose their TV signals and their screen will go dark.
Congress' decision to pass legislation to delay the transition has generated significant media coverage so it's unlikely that the seven million will take steps to prepare for Digital TV before Feb. 17; the remaining hold-outs now think they have four months to get ready.
As part of a compromise to win Republican support, Senate Democrats included a provision in the delay bill that allows local stations to switch to all-digital signals early if they want. This was done because many local stations expressed concern that they would lose money if they had to broadcast both analog and digital signals beyond February 17.
Commentary:
From the beginning, the government has screwed up the handling of the Digital TV transition and this is just the latest blunder.
By passing the delay legislation, Congress and the president sent a loud message that Americans had four more months to prepare for the switch.
However, allowing local stations to switch early guarantees that millions of people will lose their TV signals next week because they now think they have four months to prepare. When their screens go dark next week, they will panic and start calling everyone from their local congressman to their local station.
Obama and the Congress either should not have passed the delay legislation or they should have passed it without allowing local stations to switch early. By trying to have it both ways, they have only made a bad situation worse.
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DIRECTV: 50 Percent of Subs Get HD, DVR
The satcaster added 301,000 net subs in the fourth quarter.
By Swanni
Washington, D.C. (February 11, 2009) -- DIRECTV said yesterday that roughly 50 percent of its subscribers now subscribe to High-Definition and/or DVR packages.
Additionally, company executives said that 55 to 60 percent of new subscribers are signing up for high-def and/or DVR services. (DIRECTV does not break down how many subscribers have High-Definition TV and how many have Digital Video Recorders. They include both in the same category.)
The satcaster revealed the numbers yesterday in an investors call following the release of its fourth quarter report.
DIRECTV said that it added 301,000 net new subscribers (SD and HD) in the fourth quarter, an increase from the 275,000 generated during the 2007 fourth quarter. The satcaster said the increase was its largest quarterly sub increase in three years. The company now has 17.6 million total subscribers.
DIRECTV CEO Chase Carey said his company has been "immune' to the economic recession which has hurt other TV providers. Wall Street analysts yesterday suggested that DIRECTV is taking new customers from their cable and satellite rivals.
But Carey added: "I expect the economy to put pressure on us."
DIRECTV has seen its subscriber totals rise steadily since it began expanding its high-def lineup in the fall of 2007. The satcaster now claims more than 130 HD channels, although a Pike & Fischer study yesterday said the number is actually 104. (DIRECTV includes Pay Per View channels in the total.)
The company has been slower to add HD channels in the last several months due to capacity issues and programming costs. But CEO Carey yesterday reminded analysts in the investors call that his company will launch a new satellite this year that will offer more capacity.
"We’ll launch a satellite latter this year that will enable us to continue to add to our HD experience or continuing to build on our leadership in sports and add to the richness of our content with events like Friday Night Lights. Our VOD offering will improve in both richness to the offering and functionality in terms of things like faster access and a more integrated experience," Carey said.
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Who's the Real HDTV Leader?
A new study says DIRECTV's top ranking is under challenge.
By Swanni
Washington, D.C. (February 10, 2009) -- Verizon's FiOS TV service is challenging DIRECTV's position as the TV provider with the most High-Definition channels, according to a new study from market research firm Pike & Fischer.
The study says that, as of January 2009, DIRECTV offered 104 high-def channels. (The satcaster claims to offer more than 130 HD channels, but its total includes a number of Pay Per View channels and distant network signals that few count as real channels.)
But Verizon had 103 HD channels in January 2009, just one less than DIRECTV, the company said.
DIRECTV has established itself as the leading provider of High-Definition channels for the past year after it dramatically expanded its high-def lineup in the Fall of 2007. But Verizon last year boosted its HD lineup in several cities and now offers more than 100 HD channels in every market it serves.
The Pike & Fischer study says Comcast, the nation's largest cable operator, has "one of the smallest selections of HD channels," offering fewer than 40 HD channels in some markets. (Comcast has recently ncreased that number in several markets.)
"Cable networks do not have the same capacity as Verizon's all-fiber infrastructure and DIRECTV's satellite coverage, and thus face more constraints on bandwidth for HD channels," the company says in a press release.
Although Verizon and DIRECTV may offer more high-def channels than their cable counterparts, P&F notes that Cablevision and Time Warner are among a group of cable ops that offer "a substantial number of HD channels for free...Some providers have clearly assembled both the physical plant and the contracts with content owners to provide more HD content than their competitors. But it is important to look at what content is actually being offered, and at what price."
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Commentary
Digital TV: What Is Obama Waiting For?
The president needs to sign the delay bill -- now.
By Swanni
Washington, D.C. (February 10, 2009) -- Congress last Wednesday approved legislation that would delay the Digital TV transition from Feb. 17 to June 12.
President Obama, who requested the delay, has promised to sign that bill. However, as of this writing, the president has yet to approve it and the transition is still scheduled to take place next week, leaving a whole lot of people confused.
For instance, Multichannel News reports that the National Telecommunications & Information Administration, which runs the government's DTV converter box program, is saying at its web site that the transition will take place on both days.
The FCC says at its web site that "some" local TV stations may switch to digital on Feb. 17 while others may switch "sometime" before June 12. Dozens of newspapers are still reporting that the transition will occur on Feb. 17 while dozens more are saying it will be June 12.
The mixed messages are just making it more difficult for the roughly seven million people who haven't prepared for the switch to start taking action. With the government -- and perhaps their local newspaper and other media -- saying confusing and conflicting things, they will likely start tuning out anything related to Digital TV. And if that occurs, good luck in getting them to buy converter boxes or Digital TVs before June 12.
I realize that the president is busy these days, but he needs to sign the legislation immediately. And he needs to step forward with a concrete and clear plan on how the nation will switch to digital without leaving millions of people without TV signals.
Hey, Mr. President, you asked for the delay. So sign it already!
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Vudu Drops Set-Top Price to $149
The VOD service offers more than 1,000 high-def films.
By Swanni
Washington, D.C. (February 10, 2009) -- Vudu, the VOD set-top service, has dropped the price of its entry-level set-top (BX100) from $295 to $149, according to CNET.com.
The Vudu set-top enables users to download movies over a high-speed Internet connection. The box, which can also store movies, offers more than 13,000 movies and shows, including more than 1,000 HDTV selections.
However, Vudu has struggled to generate interest due to competition from traditional TV services such as cable and satellite and a general 'set-top' fatigue among Americans. To build interest, the company cut the price of its entry-level box from $399 to $295 last year.
The new price reduction could be seen as an effort to keep pace with other Net-enabled set-top services, such as Apple TV, Netflix (available on the XBox 360 and other devices) and Blockbuster, which recently launched the MediaPoint VOD player, made by Broadband device manufacturer 2Wire.
But it also could be a last ditch effort to survive amid increasing competition in a tough economy.
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DIRECTV to Increase HD & SD Bills
The satcaster says the average increase will be four percent a month.
By Swanni
Washington, D.C. (February 9, 2009) -- DIRECTV has announced that it will raise monthly programming rates on March 4, including High-Definition packages.
That's according to an article by Multichannel News.
The satcaster said monthly programming package will rise an average of four percent. For instance, DIRECTV's Plus HD DVR package will jump 4.8 percent from $72.99 to $75.99.
DIRECTV's 'Select' package will rise 6.5 percent, from $45.99 to $48.99.
DIRECTV spokesman Robert Mercer told Multichannel News that the new prices reflect the "significant investments we've made to enhance our customers' viewing experience."
Craig Moffett, a Wall Street analyst, noted today in a research note that other TV providers are also raising rates. But the Sanford Bernstein analyst suggested that DIRECTV may be taking a bigger risk by raising prices now because consumers may opt to eliminate premium channels from their lineups. The satcaster is more dependent on premium channel revenue than its cable counterparts.
"Weighing on the pay TV stocks has been a generalized fear that investors will downgrade their service packages," he said. "On this score, DIRECTV may, over the long run, be more vulnerable to recession-related service downgrades than its competitors given DIRECTV's more significant reliance on 'discretionary' services.'"
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Apple to Enter the TV Business?
Wall Street analyst says the company will include iTunes in the set.
By Swanni
Washington, D.C. (February 9, 2009) -- Pioneer may be ready to exit the TV business, but one Wall Street analyst says Apple could be preparing to storm in the front door.
Gene Munster, the managing director and senior research analyst at Piper Jaffray, predicts that Apple will launch its own branded TV set in the next two years. The set, the analyst says, will likely include DVR features and built-in components for Apple TV and iTunes.
In March 2007, Apple launched the Apple TV device which allows viewers to send videos and music from the company's iTunes store to a widescreen TV.
But the Net TV product has been a disappointment although it has been heavily promoted by some tech journalists and Wall Street analysts. Two years after launch, Apple has yet to release sales figures for Apple TV and company executives have dubbed it a "hobby."
If Munster is correct, Apple could be looking for a way to eliminate the middleman by including iTunes videos and music directly in the television.
Apple would not be the first computer maker to enter the TV business. Dell and Gateway became TV manufacturers a few years ago, but both dropped out due to poor sales and other problems.
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News & Commentary
Why Pioneer May Exit the TV Business
The company's strategy of selling high-end HDTVs meets the global recession.
By Swanni
Washington, D.C. (February 8, 2009) -- Pioneer, the maker of high-end Plasma High-Definition TVs, told Reuters last week that it's considering leaving the TV business entirely.
The company is projecting a loss of $848 million for the year ending March 31, which would be its fifth consecutive annual loss
"There is a whole spectrum of possibilities with withdrawal on one end, in-house development and production on the other and sales of procured TVs somewhere in the middle," a Pioneer spokesman told the news service.
Several other news reports, however, say Pioneer has decided to exit the TV business and bundle its DVD/Blu-ray business into a join venture with Sharp.
Pioneer has carefully crafted a reputation in North America for selling expensive, but exquisitely made Plasma HDTVs. Some high-def enthusiasts swear by them, saying they offer the best picture on the market. (Pioneer only makes LCD sets for the European market.) However, the sets are often hundreds of dollars more than comparably-sized models from rival companies.
Reuters notes that Pioneer captured just 5.9 percent of the Plasma TV market share in the first three quarters of 2008, badly trailing LG, which had 15.5 percent, Samsung, which had 22.8 percent and top-ranked Panasonic with 37.2 percent.
Commentary:
Pioneer is a victim of the deepening global recession -- and its own market strategy.
The electronics company has learned the hard way that today's anxiety-ridden consumer is rejecting anything that's perceived as a luxury item. And with Pioneer pricing its sets far above the norm, the average person sees Pioneer as pricey.
Instead, average folks are deciding that buying a cheaper Plasma set from well-known brand names such as Samsung and Panasonic makes more sense.
However, even if times were good, Pioneer's sales would continue to disappoint.
The company has failed to create a strong enough perception in the marketplace that its sets are something special, worth the extra coin. The tech intelligentisia -- led by tech journalists -- may sing Pioneer's praises, but the average consumer just thinks the sets are overpriced.
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Study: Blu-ray to Get 60 Percent Market Share In 2014
The Kagan study says player sales will reach $1.3 billion by 2010.
By Swanni
Washington, D.C. (February 5, 2009) -- Research firm SNL Kagan said yesterday that the Blu-ray high-def disc will capture a 60 percent market share of home video sales by 2014.
The company added that the high-def format will take a whopping 74 percent market share by 2017.
Despite some analysts predicting that digital downloads will soon dominate the home video scene, Kagan's study is decidedly bullish on physical media, particularly Blu-ray. At least for the next decade, that is.
“Blu-ray will be the driving force behind the video retail market throughout the next decade,” said Wade Holden, an analyst at SNL Kagan, according to Home Media Magazine.
Holden acknowledges, however, that the current economic recession will slow Blu-ray's growth.
“The current economic climate, however, will slow the growth of this new format and likely keep it from reaching the heights that it may have (reached) in better times," he said.
Still, Kagan estimates that Blu-ray disc sales will reach $13.1 billion in revenue by 2014 and $15.6 billion by 2017. Additionally, Blu-ray player sales will jump from $255.4 million in 2008 to $1.3 billion in 2010 and $6.9 billion by 2013.
After 2017, Kagan says Video on Demand services, including digital downloads over the Net, will begin to take over the home video industry.
“VOD services will continue to improve in both technology and content over the next decade and begin to draw consumers away from Blu-ray and DVD by 2017,” Holden said, according to Home Media Magazine.
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Congress Approves Digital TV Delay
The bill now goes to President Obama for his expected signature.
By Swanni
Washington, D.C. (February 4, 2009) -- The U.S. House today approved a Senate bill that delays the nation's switch to Digital TV from Feb. 17 to June 12.
The bill, which was approved by a vote of 264 to 158, now goes to President Obama for his expected signature.
The Obama administration had urged Congress to delay the transition from analog to digital, saying that millions of people are not ready for the switch and therefore could lose their TV signals.
Until today's vote, all full-powered local stations were scheduled to switch their analog signals to digital on February 17, meaning viewers would need a Digital TV, a digital converter box or a pay TV subscription to continuing watching television.
But the president and others have noted that the federal government has run out of funds for $40 coupons that consumers can use to defray the cost of the converters. Obama's proposed economic stimulus legislation includes $650 million to refund the converter coupon program.
The Senate passed the delay bill last week on a voice vote. To generate support for the delay, the bill allows local stations to switch to digital before June if they get approval from the FCC.
Nielsen has estimated that as many as seven million people are not ready for the transition at this point.
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News & Commentary
Disney May Raise Blu-ray Prices
The company examines ways to cut losses.
By Swanni
Washington, D.C. (February 4, 2009) -- The Walt Disney studio yesterday said it's considering raising the price on Blu-ray titles although surveys show that most consumers believe that high-def discs are already too expensive.
In a conference call with Wall Street analysts, the studio discussed various ways how it would rebound from a 64 percent first quarter earnings decline. Disney CEO Robert Iger said that the company would continue to try to convince consumers that its products have value that goes beyond price.
For instance, he said, Blu-ray discs that offer interactive features and a digital download file that enables playback on computers could be a candidate for a price hike.
"For instance, we are finding that when we sell a Blu-ray DVD with a standard DEP file and also a downloadable file, we can actually offer a price to the consumer that is viewed by the consumer as delivering greater value, which is enabling us to drive revenue at a level that is slightly better than we might have if we had not added those basically valuable extras to the DVD," Iger said.
Most Blu-ray high-def titles are priced between $5-10 more than their standard-def DVD companions and analysts have blamed this in part for disappointing disc sales. Some studios have experimented with lower prices, but Disney appears poised to raise prices.
"Today our focus is only intensifying as we address the changes affecting the DVD market. To that end we plan to reduce production, marketing, and distribution expenses at our home video business and to implement strategies that enhance the price-to-value relationship of our products. We believe the unique nature of our brand and the quality of our movies helps us to stand out in this environment but we must also innovate in order to generate attractive returns," Iger said.
Disney has recently released such popular Blu-ray titles as Sleeping Beauty, WALL-E and the Pirates of the Caribbean trilogy.
Commentary
Yes, times are tough and companies have to reassess how they do business. But if Disney raises Blu-ray disc prices, times will get a lot tougher for its home video business. Bad idea, Bob Iger.
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Dish Network Adds Fox News HD
This is the second HD addition during the week.
By Swanni
Washington, D.C. (February 3, 2009) -- Dish Network today added the Fox News HD Channel to its lineup of high-def channels.
The channel, a simulcast of the news network's standard-def channel, includes such programs as Fox & Friends, Hannity, The O'Reilly Factor, the Fox Report With Shepard Smith and Glenn Beck.
Dish Network also this week added the Crime and Investigation HD channel. However, at the same time, it removed the Smithsonian Channel HD channel without explanation.
Dish officials have hinted that they will add several more HD channels this year, but they have not said anything about dropping channels to make room.
Crime & Investigation HD offers a diverse mix of crime-related documentaries and fiction shows such as 24, Crossing Jordan and Twin Peaks.
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Report: Blu-ray Players to Hit $150 In 2009
The price could be lower in discount stores.
By Swanni
Washington, D.C. (February 3, 2009) -- Blu-ray player prices will fall to $150 suggested retail by the 2009 holiday season, according to an article in today's Economic Daily News.
The Chinese-language newspaper reports that "white box vendors," the industry term for no-name or little-known brands, will offer the $150 Blu-ray players.
Additionally, Lite-On IT, a Taiwan-based maker of optical disc drives, will sell Blu-ray players at that price, the article said. (The Economic Daily News article was reported today by DigiTimes.com). The newspaper said the low-priced Blu-ray players would be available internationally and in the United States.
If the report is true, it would likely mean that Blu-ray players would be available this holiday season for under $100. Discount stores often slash a product's suggested retail price, particularly during the holidays.
Most entry-level Blu-ray players now carry a suggested retail of $299, although stores and web sites offer some players for less than $200. Industry analysts have said that Blu-ray player prices need to fall before the high-def disc industry can reach a wider audience.
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Survey: Netflix Top Choice Of DVD Renters
But Consumer Reports notes the company charges extra for Blu-ray rentals
By Swanni
Washington, D.C. (February 3, 2009) -- Netflix has scored the highest overall customer satisfaction marks in a Consumer Reports survey of its online subscribers, the publication announced.
Consumer Reports said Netflix received high marks for price, selection and service, but the publication added that survey respondents expressed satisfaction with all of the rated providers, which included subscription services, in-store kiosks, walk-in stores and chains.
The magazine also noted that Netflix charges an extra $1 monthly fee for Blu-ray rentals and that Blockbuster and Netflix offer the same number of Blu-ray titles (roughly 1,000.). Blockbuster's online service does not charge extra for Blu-ray rentals.
Blockbuster, which finished second in the survey, also allows subscribers to exchange online rentals at its retail stores.
Consumer Reports said price was the biggest factor in overall customer satisfaction, followed by convenience, variety, and flexibility. The publication said Netflix was top rated for selection and service.
"With monthly payment plans starting at $5, Netflix was among the standouts for price; it was top-rated for selection and service. Readers reported that orders were filled promptly and with very few errors," Consumer Reports said in a statement released yesterday.
Among in-store kiosks, Redbox received top marks for price and convenience, Consumer Reports said.
The full results of the Consumer Reports survey can be found in the March issue of the publication.
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Commentary
Hey, I Don't Want the DTV Switch Delayed!
But the feds better push it back unless they want chaos on their hands.
By Swanni
Washington, D.C. (February 2, 2009) -- The U.S. House this week is expected to vote on a Senate bill that would delay the Digital TV transition from February 17 to June 12. By most accounts, the legislation will pass and will soon be signed into law by President Obama who supports a delay.
And that's a damn good thing.
I predicted more than a year ago that the federal government would delay the nation's switch from analog to digital signals. As a longtime observer of the federal government (including 10 years as a congressional reporter), I have come to the conclusion that our nation's leaders are incapable of doing anything right until the problem blows up in their faces.
Why?
Politicians only care about covering their fat political asses, getting re-elected and blaming others for their mistakes. They couldn't care less about their constituents, the concept of public service or just simply doing a good job. (Trust me, I've seen these animals up close; they are even worse than you think.)
Joe Six Pack: What's a converter box?
So forecasting that the digital transition would be delayed was one of my easiest predictions. I knew that the feds would screw it up -- and they certainly have. Seriously, here we are roughly two weeks away from the transition and:
1. The Converter Waiting List Is Growing and Growing...
Millions of people are now on a federal waiting list for $40 digital converter coupons because the feds ran out of money to issue them. (The coupons can be used to buy converters that can enable old analog TVs to keep working when the signals are switched to digital.)
Why did they run out of money?
At the start, the feds decided to make everyone eligible for the coupons, regardless of their income level. Yes, that's right. Bill Gates is eligible for a $40 coupon. Warren Buffet is eligible. Donald Trump is eligible. Everybody is eligible! No wonder they ran out of money!
The feds should have made the coupons available only to the people who needed them the most -- low income folks who can't afford to plunk down $60 or $70 for a converter box, not to mention buy a new Digital TV.
Plus, the feds should have done a better job of alerting cable and satellite subscribers that they didn't need converter boxes so they wouldn't apply for them. (Cable and satellite providers provide digital boxes as part of their service.) That would have left more coupons available for those who did need them.
2. Millions of People Are Still Baffled
Approximately seven million people say they are not ready for the switch and polls show that the chief reason is that they are confused. They still don't have a clue whether to get a converter box, a new TV or stand on their heads and hope for the best.
And there's no wonder. The government and the CE industry did a horrible job of educating consumers on how to prepare for the switch. Horrible! The slick PR commercials (by cable, local stations, the feds, etc.) looked like they were designed by Silicon Valley tech freaks for Silicon Valley tech freaks.
How was Grandma Moses or Joe Six Pack going to understand what was going on with all those flashy graphics and fast cuts on their screen? Give me a break.
3. The Feds Are Continuing to Confuse People
Okay, it's February 2 and the federal government still hasn't decided on the transition date! You don't think that's not confusing people?
Dear God, what if Congress this week decides not to postpone the transition -- after the president and congressional leaders said they likely would postpone it.
Well, there's little chance that those seven million people will run out and get converter boxes in the next two weeks; based on what they've been hearing, those seven million people probably have already decided that the transition will be delayed.
So, Congress better delay this thing or it will be an even bigger mess than it would have been before they started talking about a delay a few weeks ago.
Now that I've gotten that off my chest, let me get to the real point of this commentary.
Yes, I predicted the transition would be delayed. I have also pointed out (repeatedly) over the last year how the feds were exhibiting gross incompetence in managing the transition.
Because of those two things, some readers have posted comments in our message board saying that I have always wanted the transition to be delayed. By pointing out the transition's flaws, some people assume that I am against it.
Well, that's nonsense. Like it or not, I realize the Digital TV transition is inevitable. But I don't want to see millions of people suddenly lose their TV signals because of government incompetence. I don't want to see millions of people flooding government offices and local stations with phone calls. And I don't want to see local TV stations suddenly have a dramatic drop-off in ratings.
The Digital TV transition must happen -- but it must be done right. So, yes, approve the damn delay.
But as I say that, I have to ask a final question:
Will our politicians put aside their petty ways and do it right the second time around?
I wish I could say I can predict that one..
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Dish Network Adds HD Channel; Drops Another
This satcaster does not offer an explanation.
By Swanni
Washington, D.C. (February 1, 2009) -- Dish Network today added the Crime & Investigation high-def channel, but apparently made room in its lineup by dropping the Smithsonian Channel HD.
That's according to an article by Multichannel News.
Dish subscribers who tune to Smithsonian Channel HD are greeted with an on-screen message saying the satcaster "regrets that we no longer offer this channel." Viewers are advised to consult Dish's web site for more information.
The web site, however, only shows that the Smithsonian Channel has been replaced by the Crime and Investigation HD channel in the satcaster's 'PlatinumHD' programming package.
Dish officials have hinted that they will add several more HD channels this year, but they have not said anything about dropping channels to make room.
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House Rejects DTV Delay -- For Now
But House leaders plan another vote next week.
By Swanni
Washington, D.C. (January 29, 2009) -- The House of Representatives yesterday rejected a measure that would have pushed the Digital TV deadline from Feb. 17 to June 12.
The House voted 258-168 in favor of the delay, but the bill needed a two-third majority to pass under rules approved for its consideration; the legislation fell 26 votes short of the two-thirds majority.
The defeat surprised many industry observers who thought the delay was assured when the Senate earlier in the week approved it by a voice vote. However, House Republicans opposed the delay, saying it would further confuse consumers.
Despite yesterday's defeat, House Democratic leaders remained hopeful that the delay bill would pass next week when it would not require a two-thirds vote.
"The likelihood is we'll come back next week" and pass the bill, said Rep. Rick Boucher, chairman of the House telecommunications subcommittee, according to the Los Angeles Times.
A spokesperson for House Speaker Nancy Pelosi told The Times that the speaker was looking for a way to hold another vote.
On February 17, 2009, all full-powered local stations are scheduled to switch their analog signals to digital which means viewers will need a Digital TV, a digital converter box or a pay TV subscription to continuing watching television.
But the Obama administration has urged Congress to delay the transition from analog to digital, saying that millions of people are not ready for the switch and therefore could lose their TV signals.
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Netflix: Blu-ray Subs Hit 700,000
The DVD rental service charges a $1 monthly surcharge.
By Swanni
Washington, D.C. (January 29, 2009) -- Netflix said this week that it ended the fourth quarter with 700,000 Blu-ray subscribers, a sharp jump from the previous quarter.
The online DVD rental service said it had roughly 500,000 Blu-ray subscribers at the end of the third quarter. But the company increased that total despite adding a $1 monthly surcharge on Blu-ray customers.
In an investors call, Netflix CEO Reed Hastings said the high-def disc is doing better than expected thanks largely to dropping Blu-ray player prices.
“If Blu-ray player prices continue to fall as expected, driven by next-generation chip designs, then widespread adoption becomes increasingly likely and it extends the life of disc-based viewing," Hastings said.
The company also reported that its fourth-quarter profit soared 45 percent and that it now has more than nine million subscribers overall.
"Our October forecast of slowing growth turned out to be wrong," Netflix CFO Barry McCarthy said during the investors call.
Netflix also said that "millions" of subscribers are using its video streaming service, but the company would not disclose specific numbers. The streaming service, which enables you to download Netflix movies over Internet lines on several devices including Blu-ray players and the XBox 360, is free to subscribers.
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Digital TV Switch: Prisoners Getting New HDTVs
The Massachusetts corrections department says it was preferable to buying cheaper digital converter boxes.
By Swanni
Washington, D.C. (January 28, 2009) -- Can't afford a new High-Definition TV? Well, steal one. If they catch you, you'll still be able to watch it in prison.
At least in Massachusetts, that is.
The Boston Herald reports that the Massachusetts Department of Corrections has purchased 117 new High-Definition TVs for inmates to watch this Sunday's Super Bowl.
The sets, which include 32-inch LG sets and 26-inch Sharp LCDs, cost the state $76,958 at a time when Massachusetts is laying off workers and cutting social programs. The sets are being installed in the common areas of all state DOC prisons this month.
DOC spokeswoman Diane Wiffin defends the purchase by saying the state was forced to upgrade because of the nation's scheduled switch to Digital TV signals next month. The agency formed a committee in 2007 to study the digital transition and decided to purchase the new high-def sets for the common areas rather than buy digital converter boxes, which cost between $40 and $70.
However, the DOC did buy converter boxes for prisoners' in-cell televisions.
Massachusetts is not the only state facing the problem of how to upgrade prisoners' televisions when the digital switch occurs. The Orlando Sentinel reports that Florida is planning to spend $100,000 in tax money to upgrade 1,500 prison televisions so they will operate when the switch happens. And in McLennan County in Texas, the local prison there also bought new TVs to get ready for the transition, reports The Waco Tribune.
But The Boston Herald reports that some law enforcement officials are outraged by the purchase.
“It sends the wrong message when they’re asking sheriff offices throughout the state to cut at least a million out of our budget,” said Worcester County Sheriff Guy Glodis, who says he recently removed TVs from the Worcester County House of Correction. “I would argue there are other things you can spend the money on that are more conducive to rehabilitation.”
But Wiffin told the Herald that the HDTVs were "modest" and were bought from the prisoners' 'canteen funds' rather a direct appropriation from the state. Canteen funds are accumulated by prisoner purchases of items in the prison canteen, such as food and assorted sundries.
It is unclear what happens to canteen money when it's not being used to buy high-def televisions.
“I think you can find a better use for $77,000 than to go out and buy TVs for guys who are used to stealing them," Steve Kenneway, president of the Massachusetts Correction Officers Federal Union, told the Herald.
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U.S. Senate OKs Digital TV Delay
The House is expected to act this week.
By Swanni
Washington, D.C. (January 27, 2009) -- The U.S. Senate last night voted to delay the nation's switch to Digital TV from Feb. 17 to June 12 and the House could do the same as early as today.
On February 17, 2009, all full-powered local stations are scheduled to switch their analog signals to digital which means viewers will need a Digital TV, a digital converter box or a pay TV subscription to continuing watching television.
But the Obama administration has urged Congress to delay the transition from analog to digital, saying that millions of people are not ready for the switch and therefore could lose their TV signals.
The president and others have noted that the federal government has run out of funds for $40 coupons that consumers can use to defray the cost of the converters. Obama's proposed economic stimulus legislation includes $650 million to refund the converter coupon program.
The Senate passed the delay bill last night on a voice vote, but key senators have said for weeks that the nation is not ready for the transition.
"I firmly believe that our nation is not yet ready to make this transition at this time," said Senate Commerce Committee Chairman John Rockefeller who proposed the delay bill.
To generate Republican support, Rockefeller has promised not to seek more delays past the June 12 deadline. Additionally, local stations are permitted to switch to digital before June if they get approval from the FCC.
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