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PRN Upgrading to Local HD Content

Jan 19, 2004  •  Post A Comment

Premier Retail Networks, which creates the programming video loops that run nationally on TV sets in Circuit City, Best Buy, Sears, Wal-Mart and other electronics stores, plans to make available high-definition content from local stations and cable operators.
The move is designed to boost the sales of HD sets by showing more HD content to shoppers in the stores. Local broadcasters have been eager for their digital signals to be seen on sets on the retail floors, since some believe it will increase viewership for their digital channels.
PRN will display the HD signals from each market’s broadcasters and HD content from the local cable system.
Based on the traction HD achieved in 2003, the timing made sense to develop the technical infrastructure to support a nationwide rollout to PRN’s retail partners later this year.
“[2003] was the first year that the cable networks and the major broadcasters really stepped up their HD offerings,” said Peter Cullen, general manager of PRN.
PRN said that a study it conducted indicated that its viewers ranked the in-store HDTV experience as the most important source of information when deciding on the purchase of an HDTV.
Getting the local broadcast signals carried in a store environment is critically important to the growth of digital television, said Steve Smith, VP engineering/technology with Liberty Corp., which operates 15 stations.
If consumers can see local broadcast signals in HD in the store, they are more likely to buy the additional equipment, such as the antenna and digital set-top box, that’s needed to view the local broadcast content at home.
More digital viewers also means more leverage when negotiating digital must-carry deals with cable operators, Mr. Smith said. Nearly 1,200 local stations are now offering digital signals, but only 300 of those are carried by cable systems, according to the National Association of Broadcasters.
“If we can’t get our customers buying sets that will pick up the digital signals, we can’t grow our DTV business,” Mr. Smith said.
PRN currently is integrating over-the-air broadcast signals in each market into its in-store servers. When that process is complete, the retailer will be able to turn on a local broadcast or cable signal to showcase any special HD programming being aired, allowing the salesperson to demonstrate HD with homespun fare, the very content consumers will see when they leave the store and plug in the set at home.
“As HD becomes more mass-market, it’s critical to have local broadcast signals to keep it going,” Mr. Cullen said.
Mr. Cullen said the local capability wasn’t introduced sooner because the technology is just now economically feasible. To deliver HD content locally across a chain’s stores, each store needs a server that can be targeted and is addressable, he said. And an integrated antenna is needed to pull down the content. The current 3-year-old servers in stores don’t have those functions.
Currently, without such technology, PRN can show only a single programming feed across the country.
According to the Consumer Electronics Association, 4.1 million digital television sets were sold in 2003 for about $6.1 billion, a 44 percent increase in dollar sales and a 56 percent increase in unit sales from 2002. More than 640,000 digital television sets were sold in December 2003 alone, a record month. HDTV sales account for 87 percent of total DTV sales. CEA predicted that 5.8 million digital sets will be sold in 2004, 8.3 million in 2005, 11.9 million in 2006 and 16.1 million in 2007.
Consumers will begin requesting local content when shopping for sets, Mr. Cullen said. “With cable rolling out HD in more markets, customers have a knowledge of HDTV and they want to know what’s available in their market and they have a relationship with their broadcast partners,” he said.
Bruce Leichtman, president of Leichtman Research Group, is skeptical about the impact local HD content in stores will have on set sales, because the set is a bigger selling factor than any specific programming beyond movies, he said.
The National Association of Broadcasters disagrees. “The product to a degree sells itself once you see the programming, but it certainly would not hurt to see [that HD] content is available from your local broadcaster,” said Dennis Wharton, an NAB spokesperson.
PRN is seen in more than 5,500 stores and delivers more than 170 million gross impressions per month.