News Analysis
Swanni's 8 Steps to Better HD Sales
Is the industry taking them or falling down on the job?
By Phillip Swann

Washington, D.C. (November 3, 2006) -- Two years ago, I published a feature called, "8 Steps to Better HDTV Sales." Noting that high-def sets were in just 10 million U.S. homes, I urged the industry to rethink its marketing and selling strategies.

Today, nearly 25 million U.S. homes have HDTVs, a dramatic improvement.

But could TV makers and retailers be doing more?

You bet.

Let's review my "8 Steps to Better HDTV Sales" -- and see where the industry has followed them or fallen down on the job.

Step #1: Promote Lower Prices
2004 Grade: D-
2006 Grade: C
I wrote two years ago that some HDTV prices had dropped nearly 50 percent, with some rear-projection models costing just $1,200. However, electronics stores, such as Best Buy and Good Guys, were ignoring the lower-priced sets in their promotions. Instead, they were emphasizing new flat-screen TVs, which at the time still cost thousands of dollars. The reason: The retailers make more profit on the more expensive sets.

But the heavy promotion of the pricey flat-screens left the impression with consumers that all HDTV sets were still cost-prohibitive.

Today, electronics stores are still featuring their most expensive sets in print and TV advertisements. However, consumers are less intimidated because the price of all sets have dropped dramatically over the last few years. That $3,500 42-inch Plasma TV is now just $1,600 in some stores. Still, if retailers would do more to promote the lower-priced sets, it would encourage more people to come in and browse -- and perhaps buy.


Step #2: Get Women to Buy Plasma TVs
2004 Grade: F
2006 Grade: B+
In 2004, I wrote that the flat-screen TV could generate greater awareness and interest in HDTV among women. With many men already sold on buying a high-def set, I said the industry should focus its flat-screen advertising campaigns on female buyers. In many households where women are fearful that a bulky projection set will destroy the decor, the stylish flat-screen set could make the difference.

Over the last two years,  TV makers (particularly Sony) have done an excellent job of targeting females with their flat-screen campaigns. The ads emphasize that a LCD or Plasma set is fashionable and will look great in the living room. I have no doubt that the campaigns have been a huge factor in the increased sales of HD sets.

Step #3: Promote the 'HDTV Effect' to Women
2004 Grade: F
2006 Grade: C
The HDTV picture is so clear that you can see the facial imperfections and aging signs of actors and other TV personalities. As more people buy high-def sets, the ''HDTV Effect' could change our perception of who's beautiful and who's not.

I wrote in 2004 that women would be more interested in HDTV if they knew that they could suddenly see their favorite celebrities as they look in real life. (Let's fact it, women love gossip more than men.) I said the industry should do more to promote the 'HDTV Effect' -- and its entertainment value -- to reluctant female buyers.

Over the last two years, TV makers and retailers have occasionally cited the 'HD Effect' in public statements but not promotional campaigns. I still say that the first TV maker that launches a clever spot illustrating the 'HD Effect' will reap the benefits.

Step #4: Promote HD's Educational Benefits
2004 Grade: C
2006 Grade: C
HDTV owners often tell me they are amazed at how often they watch 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," one said.

The HDTV documentary can be a great learning tool for kids. And, consequently, it can be a great tool to get more parents to buy HDTVs. But the industry still seems reluctant to promote the educational benefits of high-def. It's as if the industry thinks it's not sexy enough.

Step #5: Keep Emphasizing Sports to Men
2004 Grade: A
2006 Grade: A
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 and they continue to do so.

Step #6: Stop Promoting Arcane Terms
2004 Grade: D-
2006 Grade: C
Two years ago, I wrote: "LCD. DLP. SED. TFT. PDP. Enough already. In fact, BFD, if you know what I mean. The arcane terms do nothing but further confuse consumers who are already baffled by the buying process."

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

Today, the jargon is still there, but several companies have acknowledged the problem by launching HDTV educational efforts at retail and web sites. That is a good start, but the industry still has a long way to go here.

Step #7: Pass a 'Drop-Dead' Deadline for the Digital TV Transition
2004 Grade: F
2006 Grade: A
In 1997, the federal government passed a law that said  that local TV stations must switch from analog to digital signals by the end of 2006. To get your TV signals at that time, you would need a new Digital TV or a digital converter box.

However, the law was filled with so many loopholes that consumers knew that the transition would not occur on time. Consequently, there was no need to buy a new digital set.

Earlier this year, Congress passed a new law that sets a "drop-dead" deadline for the transition in February 2009. As we move closer to the big switch, more consumers will decide to buy a new set. The new law will have a big impact on sales in 2007, and particularly, 2008.

Step #8: Launch an Educational Campaign By the Federal Government
2004 Grade: F
2006 Grade: F
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.

With the digital transition almost two years away, the feds still haven't lifted a finger to let people know about it. I'm sure they will do something eventually -- probably a few months before the big date. But if they don't act soon, the Digital TV transition could become the Katrina of technology.

Summary
So, overall, there has been some improvement. Prices are down, which has encouraged more sales. And TV makers are targeting both men and women now in their campaigns. But the industry still needs to do a better job of explaining what high-def is all about -- and letting consumers know about those dropping prices.

Click TVPredictions.com to see today's Swanni Sez.

© TVPredictions.com
----------------------------------------------------------------------------

-----------------------------------------------------------------------------

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 New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

Click TVPredictions.com to read more news and features on TV technology.