Revised DTV Sales Figures Revealed

At last week's National Association of Broadcasters (NAB) convention, the Consumer Electronics Association (CEA) called on broadcasters to step up digital television (DTV) programming efforts while announcing new market data and projections that they claim demonstrate the link between DTV sales and available content. The CEA says that the data include specific sales numbers for DTV receivers in 1999. The CEA also released revised DTV sales projections based on three different programming scenarios.

According to the new data released by CEA, 17%, or 24,631 of the 143,218 total DTV products sold in 1999 (including monitors, integrated sets, and digital set-top receiver/decoders) were capable of receiving digital broadcasts. The CEA projects total sales of DTV products to reach 600,000 by year's end. However, according to a first-quarter retail research study conducted by Neretin Associates, around 460,000 digital TV products will be sold to consumers this year. Neretin stresses that these figures represent retail sales to consumers, not industry sales to retailers.

According to Neretin, the largest percentage of these sales are expected to be garnered by HDTV-ready direct-view and projection TVs, followed by fully integrated HDTV sales and set-top decoders. "While there is enthusiasm regarding the entire digital TV area, there is also considerable confusion in the industry on what constitutes digital TV, HDTV-ready, and fully integrated HDTV—confusion that, apparently, is filtering down to the consumer."

Neretin reports that "dealers are also upset by the inability of the industry to establish clear-cut HDTV standards and the obstacles that this failure to act has created on retail floors. Retailers indicated that they are downplaying fully integrated HDTV and set-top decoder boxes and would not push these categories until HDTV broadcasting increased considerably, the prices came down on both TVs and decoders, and the built-in decoders were equal to or better than the newest standalone decoders being introduced by suppliers."

Further, the Neretin research states that the dealers are projecting that decoder sales this year will represent only 5.4% of the total digital-ready and HDTV-ready sales they expect to make. Additionally, 32 of the 108 retailers surveyed say they carry fully integrated HDTV on their floors. Of those, 50% carry Sony, 28% Zenith, 12.5% Toshiba and ProScan, 9.4% Sharp, and 6.3% Samsung. All dealers polled say they carry HDTV-ready and digital TV–ready sets from 16 manufacturers.

Putting a positive spin on the matter, the CEA's Todd Thibodeaux states that "product sales demonstrate consumer enthusiasm for DTV's high-quality picture and sound. Consumers are opting to purchase high-resolution monitors even when programming is not widely available to use with DVD players and pre-recorded digital content. We can expect receivers to remain a small percentage of overall DTV sales until consumers have access to regular, high-quality DTV programming."

The CEA also released revised DTV sales projections based on three programming-rollout scenarios. According to the CEA, if broadcasters choose the "fast lane" to DTV and demonstrate 100% compliance with the Federal Communications Commission's (FCC) rollout schedule while providing a high percentage of digitally originated content to consumers, DTV product penetration could reach 50% by 2006. If broadcasters take a "middle-of-the-road" approach and experience continued station conversion delays while providing consumers with a high percentage of upconverted analog content, DTV product penetration will be no more than 30% by 2006. Finally, if broadcasters choose the "off ramp" on the road to DTV—characterized by non-HDTV business models and delays related to reopening the DTV standard—DTV product penetration will be only 15% by 2006.

The CEA's Gary Shapiro concludes, "we've seen very clearly the link between available content and consumer electronics product sales. If you look at color TV or DVD, the numbers demonstrate that product sales take off when content becomes widely available to consumers. DTV has done extraordinarily well so far, despite limited programming. Moving forward, broadcasters' willingness to step up and deliver on DTV could have a significant impact on the pace of the DTV transition and the future of free, over-the-air TV. We urge the broadcast community to accelerate their programming efforts and deliver on DTV."