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Expected Dip in HD Sales Could Hit Satellite Hardest

Oct 15, 2008  •  Post A Comment

Flagging HDTV set sales in recent months could be a sign of a dire Christmas sales season, which could have a ripple effect that hits the pay television industry, a Bernstein Research survey reports.
While sales have increased year-over-year for HDTV sets through August, the survey said several indicators are pointing toward a rapid decline in sales through November.
According to the research, MasterCard’s SpendingPulse data, which tracks MasterCard usage, reported a steep decline in electronics purchases in the month of September versus last year, dipping 13.8%.
Also, Best Buy’s recent quarterly findings suggest a decline in year-to-year sales by 9% to 10% in the second half of September.
Bernstein cites the bankruptcy of Lehman Brothers on Sept. 13, which triggered a stock sell-off, along with the ensuing press coverage as a watershed moment that put the brakes on purchases—especially discretionary buys such as HDTV sets.
If HDTV set sales do decline as expected, Bernstein said, several other arenas could suffer, especially the satellite television market.
“Traditionally, home relocations and the purchase of a new HDTV have served as the two most important purchase occasions for satellite subscriptions. Declining HDTV sales are likely to have a negative effect on satellite gross additions in 4Q 2008 and beyond, in our view,” the report said.
Bernstein said sluggish housing sales, while detrimental to satellite providers, could end up being a boon for cable providers. They theorize that without the incentive for consumers to change providers—such as moving or a new television set—the incumbent cable companies stand to gain customers.

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