HDTV turns the corner

If a walk down the aisles at BestBuy isn’t enough to convince you, then CNET’s got some hard data on HDTV penetration.

About 16.2 million U.S. homes had at least one [HDTV] at the beginning of 2006, and that tally has likely grown to about 19 million since then, according to Leichtman Research Group.

That rise in popularity is being driven by more affordable models. At Christmastime last year, the average price of an HDTV was $1,600, but people were able to get them for as little as $500. As prices continue to drop and people replace old TVs with newer ones, the number of homes with at least one HDTV set is expected to jump to 65 million by 2010.

65 million households by 2010 seems like a conservative estimate. It’s not often you see many of those in the field of consumer electronics. The article posits HDTV might be the deciding factor in the battle between the telcos and cable companies. If that’s the case, it should be an easy victory for the cable companies. HDTV takes up a decent amount of bandwidth (about 8 Mbps per channel), and the cable companies have more bandwidth going to the home.

Even the the cable companies’ fatter pipes will clog offering more than eight to ten HD channels. The telcos, for the most part, can only offer one or two. They will have to do better than that, and much better than AT&T’s IPTV deployment in San Antonio. No HDTV is currently available there. This could be a marketing nightmare.

People buy new products and services based on anticipated needs, not actual needs. Even consumers yet to purchase an HDTV set are less likely to sign up for a new telelvision service that lacks HD. Remember the VCR. VHS marketed its ability to record up to six hours of material against Betamax’s hour and a half. This was a wildly successful marketing strategy even though almost nobody recorded anything VCRs.

This might get interesting in the context of the net nuetrality debate. If AT&T, Verizon, and company argue that net nuetrality needs to be pushed aside in order to provide HDTV to the masses at a reasonable cost, they stand a very good chance of victory.

“Hello, AT&T. How may I help you?”
“I was wondering how to get more HD channels through your IPTV service.”
“Sir, AT&T is committed to bringing you more HDTV channels, but our hands are tied. Congress won’t pass the legislation we need to build out the network. Please call your congressman and ask him to support the Network Freedom Bill.”

A bit of semantics right up there with the Death Tax.

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