TV-set brands carefully enter digital future
Strategies differ for gaining edge in new segment
by Bradley Johnson
TV set marketers are taking a calculated approach to rolling out
the first digital TVs, eyeing early models as halo products to drive
retail traffic and position brands for leadership when--an
assumption--the mass market finally emerges.
With the debut this month of high-definition digital broadcasts in
10 major cities, marketers are beginning to ship sets. The TV
picture features images through the digital shorthand of zeros and
ones, which also approximates early sales prospects.
Thomson Consumer Electronics, the No. 1 set maker, projects
first-year industry sales of 20,000 to 100,000 sets--in an industry
that this year expects to sell a record 29 million regular, or analog,
TV sets.
'A SLOW TRANSITION'
Shifting to digital, said John Revie, director of marketing for
consumer TV products at Sony Electronics, is "going to be a slow
transition . . . a trial-and-error experience over the next few
years."
Set on reducing the errors, marketers are steering carefully to
promote new technology while striving to keep analog sales
humming. The result is distinctly different approaches in how
consumer electronics marketers are packaging their new products
and how they're promoting them.
Philips Consumer Electronics, ranked by industry watchers as No.
2 in sales to Thomson, claims to be first to market with an
all-in-one HDTV set, a 64-inch projection set shipping to the 10
cities this month. Price: $8,999.
'STAR PRODUCT'
Philips this month will add a national TV spot on the HDTV set to
its ongoing campaign, featuring HDTV as one of its "star
products," said John Strobel, VP-marketing for digital TV.
Messner Vetere Berger McNamee Schmetterer/Euro RSCG,
New York, is the agency.
Mr. Strobel said Philips took the all-in-one approach for its new
flagship product based on research finding that "early adopter"
prospects want the ultimate in audio/video for entertainment and
then sports and that customers prefer HDTV be packaged in one
set rather than split into components.
Next year, Philips will add smaller, somewhat less expensive
HDTV sets. It also will introduce a set-top box that allows analog
sets to receive digital signals for customers not wanting to pay the
price of a car for a TV.
Thomson won't get its RCA and Proscan sets into stores till early
1999, but it will put demos into "dozens" of stores in New York,
Los Angeles and Washington by mid-December, a spokesman
said. Thomson's sets, starting at $6,999, will be all-in-one devices
that can receive digital and analog broadcasts as well as
direct-broadcast-satellite feeds.
Thomson also plans a $700 converter box for analog sets.
"We know the game will be played next year, not this year," said a
Thomson spokesman, since digital won't be broadcast in the top
30 markets till November 1999.
Sony will ship its first set, a 34-inch model for $8,999, mid-month,
concentrating on the 10 key markets.
Like others, Sony hopes the lure of digital will drive customers into
stores to see other wares; Sony will push retailers to display its
HDTV next to a new $1,699 Sony 34-inch flat-screen analog set,
betting customers not ready for HDTV will be impressed by the
high-end analog set.
"We think it's an excellent way for the dealer to raise his average
ticket" by pushing sales of premium analog models, Mr. Revie
said.
MITISUBISHI'S BASE
Mitsubishi Consumer Electronics America, the leader in projection
TV, is using that natural base to push into HDTV with products
now entering stores. However, Mitsubishi is packaging the screen,
selling for $3,895 to $9,000, separate from the HDTV receiver,
priced at $3,000.
Director of Marketing Robert Perry contends the prime market
opportunity today is selling these "HDTV upgradeable" screens to
customers who can use the analog set today, then upgrade with
the receiver when more digital programming becomes available
down the road.
Mr. Perry said the strategy addresses the biggest concern among
high-end TV buyers: technological obsolescence. Mitsubishi is
focusing on HDTV in a multimillion-dollar fourth-quarter print
campaign developed in-house.
PANASONIC SEEKS TOP POSITION
Panasonic, rolling out a $6,500 package of screen and set-top
box, has used aggressive PR and events to position itself as the
digital leader. On Nov. 22, it debuts a TV spot promoting HDTV,
from Grey Advertising, New York.
Panasonic VP Communications Robert Greenberg said Panasonic
has two corporate goals with HDTV: Promote digital leadership
and become the nation's No. 1 seller of HDTV sets.
Establishing leadership early is crucial, Mr. Greenberg said. "Once
the dealer has shelf space allocated to a brand," he said, "it's very
hard to knock that brand off."
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