Posted on: Sunday, June 6, 2004

HDTV rarely shows what you paid for

By Crayton Harrison
Dallas Morning News

Next time your neighbor starts bragging about his snazzy high-definition plasma screen, just smile to yourself.

Chances are, Mr. Sophisticated has just paid a lot of money to watch the same old picture blown up to a bigger size. If he's like most high-definition TV set owners, he doesn't really have high-def programming on the screen.

Less than one in four owners of HDTV sets actually subscribe to cable or satellite channels that broadcast in crisp, clear high-def. In other words, less than 2 percent of television-owning households — about 2 million homes — subscribe to HD programming, though nearly 9 percent own an HDTV-ready set. About 1.2 million households have digital tuners to get HD signals over the airwaves.

Broadcasters aren't terribly concerned that many HDTV owners aren't watching HD programs. Consumers will eventually migrate to HD programming, they say, noting the resources the industry and government have put into HDTV's development.

"This is no different than every technology before it," said Mark Cuban, president of high-definition network HDNet LLC. "The market will grow as the price points of HDTVs fall."

But the disparity shows that just persuading people to buy newfangled televisions won't readily create HD-craving viewers. HD broadcasters have several obstacles to surmount to build an audience:

• Indifference. Many HDTV set owners don't know why they'd want HD programming, believing they already have a good-looking picture on their digital screens.

"Anything put into their TV set looks better," said Lee Simonson, a purchasing executive at Best Buy Co.

• Confusion. Some consumers think they're getting high-definition pictures when they're not.

"You'll talk to a guy who's got an HDTV monitor and has digital cable, and he brags about having HDTV, and you're like, 'No, you don't — you have digital cable and a really nice monitor,"' said Jenny Miller, a spokeswoman for the Consumer Electronics Association.

• Few choices. Until November, Comcast Corp.'s cable subscribers in the Dallas area couldn't subscribe to HD channels. Satellite services such as News Corp.'s DirecTV and EchoStar Communications Corp.'s Dish Network began offering HD packages earlier, but their packages of channels expanded only recently.

Waiting for right moment

Broadcasters are trying to delicately time their entries into HD programming. If they jump in too early, they'll lose money on channels that can't attract advertising because of poor viewership. If they wait too long, viewers may have built loyalty to other channels.

The Discovery Channel took the leap last year, unveiling the Discovery HD Theater channel. The timing was finally right, said Clint Stinchcomb, a senior vice president at the channel, owned by Discovery Communications Inc.

"I think there is a combination of factors in place today that have never been in place before," he said. "HD set prices are declining. Set-top box prices are declining, and that's enabled cable to roll it out aggressively. And there's pressure from the FCC to make the conversion, so you're seeing increased content."

The availability and variety of HD content has improved. Cable operators now offer HDTV channels in 99 of the top 100 television markets, including Honolulu, making it possible to send HD to 84 million of the 108 million television-watching U.S. households.

DirecTV and Dish Network have offered HD channels for years. A third service launched last year, Voom, offers the widest variety of HD content, with 21 exclusive HD channels.

Both cable and satellite now have more content to carry. ESPN, Bravo and Discovery launched their HD channels last year, joining stalwarts HBO and Showtime, which started their HD channels in 1999 and 2000, respectively.

More channels are on the way, including HD versions of TNT and the Outdoor Channel. Broadcast networks are offering more content in HD, and cable and satellite providers are beginning to include those programs in their services.

Many consumers stumped

While HD enthusiasts believe that more choices will persuade people to buy subscriptions for HD programming, many consumers still don't know what HD programming is.

A Consumer Electronics Association survey in September asked respondents across the country whether high-definition TV and digital TV were the same thing. (They're not — HDTV is a form of digital TV.) About 55 percent answered correctly, but 21 percent were wrong and 24 percent said they didn't know the answer.

Even people who own televisions capable of displaying HD programming don't necessarily understand what HD is, and some don't appear greatly concerned with the quality of the image on their screens.

Best Buy is training its sales force to explain aspect ratio and other important HD terms to shoppers, according to Simonson. "We tell customers that if you primarily watch news content, you'll want the heads of the people to look as normal as possible," he said.

Consumers have no choice but to move to HD programming eventually, said Cuban, who also owns the Dallas Mavericks.

"People buy what is sold to them," he said. "As the price point of HD set-top boxes fall, then (major cable operators) will push people towards HD set-top boxes simply because they want to push people in that direction."