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Analyst: HD Discs a Non-Factor in HDTV Sales

19 Oct, 2006 By: Erik Gruenwedel

Delays to the vaunted Sony PlayStation 3 video game system with Blu-ray Disc technology, and projected reductions in year-end sales of HD DVD players appear to have had little impact on sales of HDTVs analysts say.

Analysts say that releases of movies in HD DVD and Blu-ray have had little effect on consumers' decisions to purchase HDTV because contentwise there are plenty of alternate options that are not as expensive.

With about 7% of U.S. households having HDTVs, reports suggest 60% of HDTV sales are driven largely by sports fans in search of a sharper playing field.

Electronics analyst Rosemary Abowd with Pacific Media Associates in Menlo Park, Calif., said consumers buying an HDTV need look only for a digital source such as digital cable or premium channels with HD movies and sports to realize the improvement.

“The leap into that is pretty pronounced and you get such a big improvement in your viewing experience,” Abowd said. “But a lot of people have trouble understanding why this 1080i DVD is so much better. I don't think a $400 or $700 [HD DVD] device is going to make people jump and buy a $1,500 or $2,500 HD display. ‘Why should I spend all this money on a 1080i player?' they say.”

Analyst Mike Paxton with In-Stat/MDR in Scottsdale, Ariz., said the demand for HD content is increasing but the dearth of HD packaged media and competing formats has resulted in lost revenue opportunities.

He said when Sony's PS3 finally launches, the vast majority of consumers will be gamers, not movie fans. He also said the price of the players is offputting.

“Is it worth it based on the number of movies actually available? The answer seems to be no,” Paxton said.He said sales of HD players would increase in 2007, but only with price reductions and increased content offerings.“Are they going to reach levels hoped for by the two competing camps and manufacturers, that's questionable,” Paxton said. “They've altered their expectations several times before.”

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