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Guest Commentary: Education Is Key to Bridging the HD Divide

Mar 16, 2008  •  Post A Comment

High-definition technology provides television viewers with an expansive view of intense color and sharp detail as well as dynamic sound quality. HD enriches the home viewing experience by pulling the viewer into the unfolding story, be it the hot-ticket sporting event, the latest Hollywood action thriller or the evening news. So why isn’t HD consumer penetration taking off like wildfire? It’s simply a matter of consumer confusion.
At Hitachi’s summer 2007 press conference, Marketing VP Daniel Lee cited a survey conducted with KRC Research that revealed 78% of consumers are confused about HDTV options.
As a result, Hitachi focused its efforts on marketing, merchandising and education/training in recognition of the impact that consumer education and retailer training could have, especially in a tough market. Hitachi launched special HDTV consumer promotions, a national certification program for salespeople and an online “showroom” that demonstrates the various benefits of HDTV.
But by the fall, CNNMoney.com reported 50% of consumers still were underestimating the cost of buying HDTV. Most consumers, it found, allocated their budget almost entirely for the television only, neglecting to consider additional costs for cables, audio systems and upgrading to cable or satellite services that offer HD channels.
In that same report, Stephen Baker, consumer electronics analyst with market research firm NPD Group, stated: “[R]etailers have put a lot of emphasis on just the TV and not on the home entertainment package that you can build with an HDTV.”
Earlier this year, Understanding & Solutions Ltd. published further research that showed while high-definition sets were in 34% of U.S. homes at the end of 2007, only 21% of those homes were receiving HD programming. Similarly, in western Europe, 20% of the homes have HD-ready screens, but only 2% are receiving HD programming. But in Japan, where consumer education is pervasive, the percentage of homes with HD screens is identical to the percentage of homes receiving HD broadcasts, and soon to reach 50% of the marketplace.
Looking only at the U.S. marketplace, consumers are used to purchasing their latest electronic device, bringing it home, plugging it in and enjoying all the claimed benefits that prompted the purchase in the first place. Confused consumers are investing in HDTV sets but watching standard-definition digital cable and upconverted DVDs. Because they’re viewing programming on a larger screen, they think they’re getting HD even though they’re not. And until they’ve seen true HD, they don’t know what they’re missing.
Upconverting DVD players and Universal Media Discs only add to the confusion for consumers, as does the battle between the HD DVD and Blu-ray high-def DVD formats. While the industry has recently embraced Blu-ray as the dominant format for home entertainment, retailers are discounting the HD DVD players that remain on their shelves. But continuing to sell equipment that is soon to be obsolete and will not be supported by the major studios also creates the potential for consumer backlash.
The salesman at the local electronics retail outlet may be extolling the incredible viewing experience of HD when selling the HDTV, but is he reminding the consumer that the set is just the first piece of the puzzle? The local cable or satellite company brags about the number of HD channels it offers, but does it clearly state consumers must have an HDTV and the additional HD programming package (and a different set-top box and/or satellite dish) to view those channels? And once the consumer has purchased the HDTV and upgraded to the HD channel package, is there currently enough HD content across all genres of programming to justify the additional expense and keep the customer satisfied?
Dedicated HD channels such as our own MGM HD offer consumers a plethora of high-definition entertainment choices, and the trades are filled with cable companies’ promises of hundreds of additional HD channels in the months and years ahead. But all of this becomes a moot point if the consumer isn’t educated about each of the components required for true HD viewing.
In the next few years, the industry will see tremendous change. One of the most fundamental and important changes—the one that will have the greatest impact on production and distribution—is the adoption of high definition. Hollywood needs to embark on a collaborative consumer-education campaign—one that includes the retailers, the cable and satellite companies and the programming networks and studios—if HD is to realize its potential as the most important technological development of the new century. n
Douglas A. Lee is executive VP of worldwide digital media for Metro-Goldwyn-Mayer.

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