DTV Summit Concludes

Four major industries banded together last week to focus on the business issues necessary to bring digital TV to the American consumer. More than 300 people attended the fourth DTV Summit, which was sponsored by the Consumer Electronics Manufacturers Association (CEMA) in conjunction with the Association for Maximum Service Television (MSTV), the National Association of Broadcasters (NAB), the National Cable Television Association (NCTA), and the Satellite Broadcasting and Communications Association (SBCA). The one-day summit featured leaders from the consumer-electronics, broadcast, cable, satellite, and retail industries discussing their latest plans and strategies for the DTV transition.

According to Gary Shapiro, president of CEMA, "HDTV is here at last, and while this is a gradual transition, the momentum is building. Consumers are buying their TVs from retailers, and manufacturers have introduced nearly 80 DTV products. Everyone is catching the digital TV fever."

Todd Thibodeaux, vice president and senior economist for CEMA Market Research, presented new DTV consumer-research results. Several focus groups and a telephone survey were conducted by CEMA earlier this year. The research indicates that consumer awareness of DTV is on the rise, though many consumers remain confused about the differences between analog and digital television. Among consumers familiar with DTV, one in five (which represents 11 million households) said they had visited a retailer in the past 12 months to see or ask about DTV. Of those familiar with the technology, nearly 60% said their next TV purchase will probably or definitely be a DTV.

Focus-group results reaffirm that with DTV, seeing is believing: HDTV demonstrations exceed consumer expectations. Focus-group participants who expressed satisfaction with their current set changed their minds after seeing an HDTV demonstration. About half the consumers surveyed expect DTV to increase their TV time and/or increase the attention given to TV. Most consumers said they expect the transition to HDTV to be a gradual process, and many thought the prices would come down. Many compared the DTV transition to the change from 8-track and cassette tape to CD. Others cited the falling prices of computers as evidence of digital technology becoming less expensive over time. Most expected to purchase a DTV in two to four years.

The research results also demonstrate that the majority of consumers rate superior picture quality as the most likely reason to purchase a high-definition set. Among this segment, many with Internet access believe that a DTV with web-browsing capabilities is redundant. Others were extremely interested in datastreaming and multicasting. This segment includes those who want to consolidate the separate devices in their systems and those who do not have a PC but desire web-browsing capabilities. Generally, datacasting and surround sound were ranked second behind picture quality as reasons to buy an HDTV. Multicasting ranked last, perhaps because the concept was difficult for consumers to understand.

"The transition from analog to digital television promises to provide new value to consumers," says Decker Anstrom, president of NCTA. "Cable operators have invested $20 billion since 1996 to upgrade their facilities to deliver digital and HDTV programming, and we remain committed to providing cable customers with the programming they tell us they want. We are pleased that cable networks like HBO are among the HDTV pioneers."

According to Chuck Sherman, NAB's executive vice president of television, "Broadcasters are ahead of schedule in rolling out their digital facilities, and they are now increasingly turning their attention to providing the programming that will attract consumers."

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