Washington, D.C. (October 20, 2008) -- Multichannel News today is running a story under the headline, "HD: Will Economy Unplug Set Sales?" The article quotes the usual suspects -- Wall Street analysts -- as predicting that there will be a big drop in HD sales during the 2008 holiday season.
The Wall Street Journal last week ran a similar article, forecasting gloom and doom for high-def sales in the next few months.
Let me explain why the Wall Streeters are wrong, as they usually are.
1. Digital TV Transition
First, there's this little thing called the Digital TV transition, scheduled for February 17, 2009. On that day, full-powered local stations will switch from analog to digital signals, meaning you will need a Digital TV, a converter box or a pay TV subscription to keep watching television.
Many people are convinced that they need a Digital TV -- or they are baffled by the converter box process. Consequently, if they haven't already purchased one, they will look for an affordable Digital TV in the coming weeks.
2. Prices Are Falling
Despite what some economists seem to be saying, consumers won't stop shopping entirely. But they will shop more carefully, seeking out bargains and/or products with dropping prices.
High-def set prices are falling, as consumers know, with some 42-inch Plasma sets now around $750. During the holiday season, those prices will fall even further and consumers will take careful note.
3. TV Makers Will Promote Smaller-Screen Sets
TV manufacturers can read the headlines just like everyone else. They know that consumers have fewer dollars to spend. So, they -- and their retail partners -- will spend more money promoting smaller-screen HD sets (32-inch, 37-inch etc.) that also come with smaller price tags.
The message will be that you don't have to spend thousands of dollars on a new Digital TV. You can get a 32-inch HD set for less than $500 -- sets smaller than that for even less. This will appeal to consumers who are concerned about their jobs and their stock portfolios but who still want to buy a new set for the holidays.
So, bottom line: Millions of consumers will still buy high-def TVs this holiday season, but they will be smaller -- both in screen size and price.
Comment on this article!
The Wall Street Journal last week ran a similar article, forecasting gloom and doom for high-def sales in the next few months.
Let me explain why the Wall Streeters are wrong, as they usually are.
1. Digital TV Transition
First, there's this little thing called the Digital TV transition, scheduled for February 17, 2009. On that day, full-powered local stations will switch from analog to digital signals, meaning you will need a Digital TV, a converter box or a pay TV subscription to keep watching television.
Many people are convinced that they need a Digital TV -- or they are baffled by the converter box process. Consequently, if they haven't already purchased one, they will look for an affordable Digital TV in the coming weeks.
2. Prices Are Falling
Despite what some economists seem to be saying, consumers won't stop shopping entirely. But they will shop more carefully, seeking out bargains and/or products with dropping prices.
High-def set prices are falling, as consumers know, with some 42-inch Plasma sets now around $750. During the holiday season, those prices will fall even further and consumers will take careful note.
3. TV Makers Will Promote Smaller-Screen Sets
TV manufacturers can read the headlines just like everyone else. They know that consumers have fewer dollars to spend. So, they -- and their retail partners -- will spend more money promoting smaller-screen HD sets (32-inch, 37-inch etc.) that also come with smaller price tags.
The message will be that you don't have to spend thousands of dollars on a new Digital TV. You can get a 32-inch HD set for less than $500 -- sets smaller than that for even less. This will appeal to consumers who are concerned about their jobs and their stock portfolios but who still want to buy a new set for the holidays.
So, bottom line: Millions of consumers will still buy high-def TVs this holiday season, but they will be smaller -- both in screen size and price.
Comment on this article!
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Phillip Swann is
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