Ultra-HD Off Target?7 Feb, 2014 By: Chris Tribbey
Following all the Ultra-HD (UHD) TV introductions this year at the International Consumer Electronics Show (CES), the consumer electronics industry could use every retailer out there to help promote the format to consumers.
At least for now, mass merchant Target — the second-largest U.S. retailer, according to Fortune 500 rankings (behind No. 1 Walmart, which does sell UHD sets) — won’t be among them.
“Target does not carry 4K TVs, and we do not have information to share regarding future assortment plans or vendor conversations,” a Target spokeswoman said.
Walmart carries the units in select markets.
“Walmart currently sells 4K Ultra-HD TVs on Walmart.com and in approximately 80 Sam’s Clubs,” a Walmart spokeswoman said. “As for future plans, we will continue to listen to our customers and members and make merchandising decisions based on their needs and wants.”
And Best Buy, which caters to higher-end consumers, is behind the format.
“Best Buy is the world’s leading retailer in home theaters and offers the latest and greatest in new technology, including Ultra-HD,” a Best Buy spokesperson said. “With four times the resolution of 1080p HDTVs, Ultra-HD TVs are the next generation of new TV technology, and they continue to grow in popularity.
“Many consumers may opt for this option to view major upcoming sporting events rumored to be aired in Ultra-HD, stream Ultra-HD content available through services like Netflix, or simply to upgrade to the newest technology.”
Still, at first glance, Target’s move could be considered a major blow to the service providers (Amazon, Dish, Netflix) and manufacturers (LG, Panasonic, Samsung, Sony) who’ve thrown weight behind 4K, a format that offers a resolution four times that available on current HDTVs and aims to be the successor to HDTV.
But a new consumer survey from the Consumer Electronics Association (CEA), the trade group behind CES, suggests mass merchants such as Target and Walmart don’t matter as much when it comes to the immediate success of UHD TVs.
The Feb. 5 CEA survey found nearly half of consumers (47%) saying that if they do get an Ultra-HD TV, it’ll be at specialty electronics stores, compared with only 17% at a mass merchant (such as Walmart or Target), and only 8% at a warehouse club store. Only 10% said they would buy online.
Eighty percent of consumers said they would look for 4K displays in stores, and 77% said they would research 4K online before buying.
“Ultra-HD TV consumer adoption will be a case of ‘seeing is believing,’” Rhonda Daniel, senior manager of market research of CEA, said in a statement.
“Experiencing the technology in person is a critical component to drive consumer interest in adopting Ultra-HD as their next television.”
The survey saw a quarter of respondents considering a UHD TV purchase in the next year (compared with 33% who said they might purchase any TV overall during the same period). And price remains a major barrier: 75% of respondents said their chief concern was the cost of a UHD TV.
However, Stephen Baker, VP of industry analysis for research firm The NPD Group, said that UHD TV prices are already heading down, and that price shouldn’t be considered a barrier.
“Price isn’t an issue right now, nor will it be in the future,” he said. “There are $3,000, 55-inch sets from high-quality brands like Samsung and Sony in the market now. The opportunity to trade consumers up will not preclude anyone from working this opportunity.”
Tom Florick, head of TV for electronics retailer H.H. Gregg, concurred, pointing to a larger assortment of 4K screen sizes and more manufacturers entering the market.
“If you think about it, from the introduction into the market from Samsung and Sony from last August, September, a 55-inch 4K TV is down to around $2,000,” he said. “It’s a lot more affordable now, compared to when it first entered the market.
“And for folks who are really looking to buy that higher-end 1080p model, they’re not that far away from getting a 4K model. Samsung and the other brands out there have top-tier 1080p models that close the gap from a 4K model.”
Even if the price of UHD sets comes down, the accessibility to 4K content remains paramount, according to the CEA survey: 57% percent of respondents said they would need pay-TV programming to be in 4K before they would get an Ultra-HD TV, and 49% said discs would need the same before they’d consider a purchase.
Adam Gregorich, group administrator with the Home Theater Forum — an online community dedicated to home entertainment hardware and services — said that’s a major issue.
“While price is a factor in adoption of the format, the lack of native content or a standout benefit like glasses-free 3D are also impediments to the success of the format,” he said. “The fact that different manufacturers are signing their own exclusive deals with content providers will only add to the consumer confusion.
“With current prices and lack of content, its very hard to convince anyone other than the early adopter or bragging-rights consumer that 4K is worth the upgrade, especially in the under-60-inch screen-size category.”
There have been several content commitments to 4K. During CES, Sony Electronics announced it was doubling (to 140) the number of 4K titles available via its Video Unlimited 4K download service (accessible via a Sony 4K Ultra-HD Media Player and Sony 4K Ultra-HD TV). Samsung announced 4K content partnerships with Comcast Xfinity TV, Amazon, DirecTV, Netflix, M-Go, Paramount Home Media Distribution and 20th Century Fox Home Entertainment.