September 1, 2005
High Definition TV Starts Slowly, Makers Hopeful
BERLIN -- Armin Schoenfelder would love to buy a television set that is ready for high definition broadcasts but the German engineer wants to spend no more than 900 euros, while the sets start at twice his budget.
"Sure I'm interested, but I'm looking at the prices," the 68-year-old said as he browsed at the Saturn electronics store in Frankfurt.Salesman Mathias Kerscher, 25, is not convinced about high definition television (HDTV) yet, because no German channel is broadcasting in the high-quality format yet. "Until there's a better signal, I don't see any point," he said.
The two men illustrate the hurdles the consumer electronics industry must overcome to promote HDTV: a weak European economy and lack of high-quality broadcasts.
Yet at the bi-annual consumer electronics trade show IFA in Berlin, once the launch platform for DVD, big TV set producers draw confidence from market research that suggests HDTV may grow faster than black-and-white television did.
It took 25 years for 80 percent of households to own a black-and-white TV, a percentage forecast to be hit within 15 years by "High Def" households. It took color TV some 21 years, according to a study by Euroconsult and NPA Conseil.
Consumers are now much quicker to pick up the latest gadgets to receive TV broadcasts. In France, it took only five years before 2 million homes had purchased a flat TV, a period after which barely 0.5 million homes had a color TV.
Flat screens are not equivalent to HDTV but many of the new plasma and liquid crystal display (LCD) sets are able to reflect the 1080 viewable lines of HDTV, creating a picture that has five times more detail than standard definition television.
LONG TIME COMING
Unlike the picture quality of HDTV, the launch date of the technology is far from razor sharp.
Research began in the United States as early as 1970 and became serious in 1974 with the HDTV study of the International Telecommunications Union. It took nearly two decades to set a world standard, after which the United States kicked off the change-over.
In Europe, the electronics industry and the European Union agreed in 1992 to start HDTV as soon as 1999 but the first channel began service in 2004 and 1080 will remain the only one until joined by Germany's premium channel Premiere in November.
"There has been a widespread view in the industry that HDTV itself has failed," a working paper by the European Commission said in 2004.
One reason the first incarnation of HDTV was late was that the industry first planned an analog version and then realised it had to shift to digital, which makes more efficient use of radio spectrum and network capacity.
"I share the sense of frustration that it's been slow to happen, but the wave has begun," the European president of consumer electronics giant and TV market leader Sony Corp, Chris Deering, told Reuters.
The United States has led the charge to HDTV and 10 percent of homes are ready for the new technology. Government regulation and HDTV broadcast targets have contributed to this achievement, while Europe has decided to let the market set the pace.
"The market has to drive it in Europe, more than in other places," Deering said.
The soccer World Cup may give HDTV the boost it has been waiting for, said Premiere's head Georg Kofler.
"Ahead of the 1974 World Cup, many TV households swapped their black-and-white TV sets for a color TV. We are expecting a similar drive through next year's World Cup," Kofler said at a news conference at IFA.
Booz Allen Hamilton consultants expect Europe to cross the 10 percent penetration mark in 2008. This is a significant threshold, because it brings a HDTV set close to every home.
"All we need is a set on every block, so people can see what it's like, at the neighbors," Deering said, adding that he is more bullish than even his own company, which expects aggregated market sales of 20 million "HD ready" sets by 2008.
"I think it will happen at an accelerated pace, with initiatives such as those of Sky in the United Kingdom, which has very big plans for HDTV. There are also initiatives in France, Germany, Italy and also by the BBC in Britain. Britain will probably be one the early adopters, and a lot of broadcasters look and learn from the BBC," he said.
HDTV may be adopted quicker in Europe than in the United States because of recording equipment such as the new generation of high-density DVD recorders, HD DVD and Blu-ray.
Rapid adoption by broadcasters will finally push European TV producers to start using HDTV recording equipment, which is already a pre-requisite for U.S.-based TV producers -- 70 percent of U.S. prime-time broadcasts are in HDTV.