HDTV to Overtake Analog in 200623 Jan, 2006 By: Jessica Wolf
Folks are going digital in 2006, according to the Consumer Electronics Association (CEA).
The group predicts that 2006 will be the first year sales of high-definition digital televisions will outpace sales of analog sets. CEA predicts HDTV sets will outsell the old-school TV by 89 percent in 2006, reaching 15.9 million and contributing to more than $23 billion in total digital TV revenue.
“In a way, it is the year of digital TV, although we've been saying that for the last couple of years,” said Sean Wargo, director of industry analysis for CEA. “But this is probably the year you can say digital goes mainstream.”
Now that the technology has passed the 20 million-home threshold, it's shifting from the early-adopter zone into the more price-conscious, brand-aware mainstream consumer, he said.
Last year, more than 12 million digital TV units shipped, according to CEA, increasing 60 percent from 2004 to reach $17 billion in sales. A majority of those shipments — 85 percent — were high-definition sets, according to CEA.
The increasing popularity of digital TV sets came in part from price dips in flat-panel liquid crystal displays (LCD) and plasma screens. These kinds of sets accounted for a combined 40 percent of all 2005 digital TV sales by dollar.
Consumers have been seeing digital TV and HDTV hardware stocked and promoted heavily at retail, as well as programming offered on satellite and cable, and are starting to get the picture, Wargo said.
“There are good price points, a broad understanding of the technology and a wide availability of content, and that awareness is only getting better with a lot of other products hitting the market, like HD DVD, Blu-ray and HD games,” he said.
It's still a product that prices out most mass consumers, Wargo said. The average TV set of any kind sold in a given year is $550, and most flat-panel displays cost twice that much, he said.
“It's not necessarily a technology that all consumers are ready to buy, but there are a lot of options open now for consumers who are in that $550 to $1,000 range, even in flat-panel,” he said.
The march toward the Federal Communications Commission's Jan. 1, 2009, deadline for the end of analog transmissions continues to add some fuel to digital TV hardware sales. The CEA hopes this year will bring legislation that adheres to any hard date.
But for now, it's not the sole driver, Wargo said.
“The fact that we're about to shut off the analog spectrum probably isn't that widely known or understood,” he said. “But the benefits of digital, especially HD, are fairly apparent now. People know they get a better experience when watching DVD [on digital sets] or TV shows in high-def.”