Zenith, time to lead........
The way I see it:
1. Consumer demographics: 100 million households in the US own TVs with an average of 2-3 TVs per household. CE market is now $70 billion per year. Trend is up for Home Theater equipment and is expected to quicken. By end of 1997, 13 million will own some home theater equipment. 41% of customers want the entire system installed by the selling store. (source: CEMA).
2. HDTV intent of Broadcasters and Cable Systems: HBO in Summer '98. The Turner Group Discovery channels, PBS, CBS, NBC, ABC in late '98. Broadcasters determining whether to deliver two 480 active interlaced channels with separate brightness and color components during non-peak hours and one HDTV interlaced channel during peak hours (in addition to their analog channels). or other multiplexing alterntives. Multiplexing beyound four channels appears unlikly due to high content costs, too much fragmentation of an already fragmented market and video quality dregradation.
3. HDTV models will come to market in Fall '98 to include Dolby digital six channel surround sound; dual scanning (interlaced and progressive) to meet all 18 formats approved by the ATSC (with 12 of the formats for SDTV); and dual aspect ratios (4:3 and 16:9). Screens will all be more than 40" in size and will be wide sized. Since the highest portion of manufacturers HDTV costs is for the screen (estimated at 80% of the total TV manufacturing cost), the large screens will necessitate high HDTV prices- $5,000 and above. Economies of scale in mass production and forces of competition should rapidly drive down screen costs.
4. Digital set top boxes in the $300 range are being developed which promise 30% improvement over present TV quality and are expected to grab most of the early digital market due to high initial costs of HDTV and SDTV.
5. The SDTV market will be for digital TVs less than 40" screen size. Screens must be at least 40" in size for real diiferentiation between HDTV and SDTV video quality.
6. Expect digital set-top boxes, SDTVs and HDTVs to hit the street at about the same time. with estimated prices of $300 for a set top box, $2,500 for a SDTV and $5,000 - $15,000 for a HDTV.
7. Given the above, my read is that 65% of consumers will initially opt for the set-top box and will get a 30% better picture, 20% will opt for the SDTV to get Digital surround sound and the wide and higher-quality screen, and 15% will go with HDTV for a much better viewing experience. Thus, with a full range of prices, the DTV market should be hot as hell.
My major complaint of Zenith (and LGE) management is that they are not leading the digital revolution. Consumers need to understand the above basic facts and Zenith needs to lay out the future scenario. I'm still against the NCTV (at this stage). It just mucks everything up and there is no indication that consumers give a damn about surfing the net while watching TV. Don't know about the rest of you but I'm even peeved with ESPN for distracting my attention to all the sport scores at the bottom of the screen. Zenith, listen to the consumer, not Silicon Valley marketeers.
Zenith needs to assume the leadership at the January International CE Expo in Las Vegas (largest CE exhibition in the world). Announce that Zenith will offer fully compatible HDTVs, SDTVs, set-top boxes, full audio line and Divx DVDs as early as May 1998. Zenith's early exclusive distribution rights of Divx DVDs provides Zenith an early lock on DTV sales. Zenith could grab the entire early techno market by selling compatible Divx DVDs with HDTVs and SDTVs regardless of when the broadcasters deliver HDTV content.
Pete, It's time to lead or get out of the way. |
