Confusion, High Prices Deter HDTV Audience

Build it and no one will come. That's been the broadcasting industry's worst nightmare since discussions about high-definition television began more than 10 years ago. Many executives have expressed dismay over the fact that the Federal Communications Commission mandated their compliance with HDTV's launch---an effort that costs each station millions of dollars in new equipment and technical training---when there is almost no audience to see it. Dozens of stations are ready for the official nationwide launch of HDTV in just two weeks, but the few people who will see the first broadcasts will be engineers, journalists, and a handful of customers and salespeople in electronics stores.

Public response to television's equivalent of the moon landing has been totally underwhelming. Part of the disinterest can be attributed to technological saturation and part to the fact that the broadcasting and consumer-electronics industries have done a pitiful job getting the word out to the public.

But the most inhibiting factor is the high cost of HDTV receivers. Large-screen rear-projection sets start at about $6000 and run up to $20,000. Some monitors costing thousands and hyped as "digital ready" require external digital tuners costing many hundreds of dollars more.

Consumers are accustomed to paying a few hundred dollars for reliable, high-quality analog televisions, and they are balking at the concept of taking out a second mortgage to buy one for which there is no available programming. A Yankee Group survey revealed that only 10% of the television market is willing to pay more than $800 for a TV of any quality. Most expect to pay about $450, the survey found. "Affordable" digital sets, still bearing four-figure price tags, won't be available for at least a year, and prices aren't expected to drop into the hundreds until four or five years from now.

Furthermore, there is a tremendous amount of misinformation among consumers (and even among electronics salespeople) as to what "digital television" actually means. Satellite transmissions and DVD movies are already hyped as "digital," and the assortment of DTV formats---1080i, 720p, 480p---only adds to the confusion.

The perceived benefit of HDTV isn't there yet, and it might never be if cable systems decide not to carry digital signals. Cable providers supply TV signals to two-thirds of American homes, and cable executives have been more than reluctant to endorse the new system, mainly because HDTV is so bandwidth-intensive that they will have to delete some of their current offerings to accommodate it. "Cable has the potential to kill this baby in the cradle," says National Association of Broadcasters spokesman Dennis Wharton. "We think it will be difficult to jump-start this technology if it's not carried by cable."

The FCC has a target date of 2006 for the complete transition to all-digital programming. At that point, all analog transmission will theoretically cease. But analog reception will likely continue in a big way. Jupiter Communications estimates that 80% of the viewing public will still be watching their trusty NTSC sets eight years from now; most will probably do so through inexpensive set-top boxes that will convert all digital formats into "legacy video" signals. Such devices will produce a picture similar to DVD video on high-quality TVs today---quite good compared to standard broadcasting or VHS tape, but not truly high-definition. Real HDTV might not reach the mass audience for 10 years or more.