consumer issues

FCC officials and CE industry leaders claim the transition to digital television (DTV) has been successful to date. Yet, despite the hype surrounding
Author:
Publish date:
Social count:
0

FCC officials and CE industry leaders claim the transition to digital television (DTV) has been successful to date. Yet, despite the hype surrounding the many forms of digital television, growth of DTV in American homes has been slow at best, especially when compared to the red-hot DVD, one of the most extraordinarily successful consumer electronics products in history. At this time, three key issues impede widescale adoption of digital television: high prices, availability of programming and lack of consumer education. A recent survey of 750 consumers by Equifax CIS uncovered critical attitudes about digital television.

The affordability chasm First and foremost, DTVs are out of reach to all but a handful of consumers. The average price respondents in the survey would pay for a fully integrated digital television was $800, over 700 percent less than the current average market price. This pricing preference fell 18 percent from March to October 2000, a sign that consumers believe prices should be dropping as DTV technology evolves. Not surprisingly, males are willing to pay 30 percent more than females for digital television, but still well below current pricing. Consumer pricing preferences for digital-ready TVs (no decoder) and set-top digital decoders were $700 and $200 respectively. The affordability chasm that exists must be bridged before mainstream adoption can occur.

Broadcasting obstacles Most industry observers believe that content (programming) will drive the HDTV market. However, the consumers we surveyed were not as concerned with this lack of programming as the industry might think. Nearly two-thirds of respondents "disagreed" or "strongly disagreed" that the lack of HDTV programming is affecting their decision to purchase a digital television. Moreover, respondents' opinions about the importance of broadcasting grew more negative from March to October, falling from 68 percent to 61 percent "important/very important" rankings during that time. Most consumers lack the understanding of DTV technology to make thoughtful value judgments. Nearly half of the respondents in the Equifax CIS survey said they had never seen an actual HDTV picture.

While limited digital broadcasting is available in 64 percent of U.S. households, broadcasters have been reluctant to ramp up production of high-definition television programming due to the high cost and limited number of digital receivers in the field on which to view it. In a war of words and standards, manufacturers claim they have fulfilled their promise of delivering high-quality digital TV products, while broadcasters are lobbying for new DTV standards and for digital tuners to be built into every TV produced, which many claim could be detrimental to the industry.

The number of TV stations currently broadcasting some of their programming in digital had increased 30 percent since March 2000 to 162 stations as of October 2000. Among networks with at least five affiliates, PBS has been the most aggressive about delivering on the digital promise, increasing digital programming 64 percent since March. Among major TV networks, ABC currently has the most affiliates broadcasting digitally. However, NBC had the most unaided awareness of specific programming with 7.3 percent recalling a particular program broadcast in digital on NBC. Overall, the programs most often recalled were "news" (3.6 percent), "football" (3.5 percent) and "Jay Leno/Tonight Show" (3.1 percent).

Digital confusion Compounding the pricing dilemma, lack of knowledge about digital television and fear of obsolescence further delay mainstream adoption. Confusion about the many shades of DTV pervades mainstream America, creating a climate of TV technophobia. Although one in four consumers surveyed believe they are "knowledgeable about consumer electronics," findings from the Equifax CIS survey suggest many consumers may be confused about what high-definition picture quality is, the equipment needed to view an HDTV picture and whether they actually own a digital television.

On the horizon Until the pricing and broadcasting barriers can be overcome, keep an eye on digital TV delivered to personal computers, along with interactive features. PC DTV is technology that allows computer users to receive and view rich DTV, HDTV, Enhanced TV and datacasting services from a terrestrial broadcast, cable or satellite source. Current computer monitors already provide the progressive scan platform necessary to view high-definition signals. PC users in a DTV coverage area will be able to receive digital content using a low-cost PC DTV receiver card and a television antenna. PC DTV may present opportunities to speed adoption in the American home.

Interactive technologies, with their promise of increased viewer power, are the true harbingers of TV's future. Interactive technologies not only let viewers become more involved in what they're watching, but they also offer more choice. Datacasting uses the high-speed DTV broadcast signal to deliver large data files such as music, video, subscription services and software over the air rather than by modem or DSL connection, at 10 times the speed. Enhanced Television contains interactive graphical overlays that present the viewer with additional information during the program. Enhanced DTV provides information related to the program by sending data files along with the DTV video and audio signal. The viewer can access the information through an interactive menu-driven interface or choose to turn off the information altogether.

Time will tell if consumers will watch and interact with digital television through their personal computer. In terms of interactivity or datacasting, there appears to be a general lack of understanding about the technology. The Equifax CIS study found four percent of respondents said interactivity was an important factor in their DTV purchase decision, up from zero in March 2000. Thirty-eight percent of respondents said interactivity was of "little/no importance" in their purchase decision.

In order for digital television to gain mainstream acceptance, several steps must be taken. First, pricing must fall significantly in order for consumers to realistically consider purchasing digital over existing analog technology. Second, a widespread consumer education program must be initiated to demonstrate the distinct advantages and improvements of high-definition picture quality, along with the broadband capabilities of datacasting and enhanced television. Third, broadcasters must develop a focused campaign to promote and develop new programming in high definition. The road to digital acceptance is long and difficult, and only thoughtful planning and execution will ensure its long-term success.