Satellite Merger?

Liberty Media is the owner of the QVC cable shopping newtork and and Starz movie channels, among others. Last year, it made a deal with Rupert Murdoch’s News Corp. to trade for a controlling interest in the satellite television service, DirecTV. Now a number of sources, including analysts Probe Financial Associates, are musing about the possibility of a DirecTV merger with EchoStar, which runs the DISH Network satellite television service.

The idea of this merger was floated back in 2002, but was considered then to be in conflict with anti-trust laws. The situation as changed, however, as the question of monopolies is now considered in the broader market context. As a result, a single satellite company would be less likely to be judged a monopoly, because it has to compete in the same market as the cable and telephone companies that are also offering television service. Similar reasoning is at work in the possible merger of the Sirius and XM satellite radio services.

A merger between DirecTV and EchoStar would make a lot of sense, especially now that EchoStar has bought SlingBox. It presumably would result in a more efficient operation. The problem facing any satellite service, however, is how to compete with the cable and telco “triple play” offerings that include broadband Internet service. A larger, combined DirecTV/EchoStar might have the clout needed to make some favorable alliances with broadband providers.

The Liberty Media CEO, Greg Maffei, has stated that such a merger is unlikely. Still, that doesn’t mean it won’t happen.

You can see the differences between DirecTV and DISH Network offerings at http://hdtvprofessor.com/SatelliteTVService/satellite-comparison.html.

Tipping Point for HD DVD?

In the battle for the high-definition DVD, Blu-ray has a big advantage because there are all those PlayStation 3 consoles out there with Blu-ray drives. In spite of this, HD DVD has a strong advantage by having lower cost players than Blu-ray; entry level models cost about half as much. And I’m convinced that purchase price trumps features, available titles, and installed base. (Note that I’m impartial but not unbiased on this topic; I’ve picked HD DVD as the eventual winner.) Now comes an interesting analysis that may prove to be the tipping point in HD DVD’s favor.

My former colleague Melissa Perenson is now at PC World, and she wrote an excellent piece based on an interview with Toshiba’s VP of product development and product management at the DVD Forum conference in Los Angelese last week. The Toshiba VP said that the first notebook with an HD DVD drive was priced at $3,000. The price now is about $1,500, and by Christmas, they are expected to be below $1,000. And these are not just HD DVD drives; they are also DVD SuperMulti drives that can also write to standard recordable DVD and CD media, making them ideal for backup and other data purposes.

So what’s significant about this news? Next year, notebooks are expected to outsell desktop computers for the first time in this country. Almost all notebooks have high resolution, wide format screens, so clearly people are watching movies on their notebooks. (That extra screen width has negligeable advantages for data applications.) And guess who is one of the top notebook manufacturers? Yup. Toshiba.

And how do you drive down the cost of a technology component? Build a zillion of them. Increasing sales volume improves cash flow and results in higher production efficiencies. According to the article, Toshiba intends to make HD DVD an option on most of its notebook models for 2008, and expects to ship more than 5 million HD DVD drives in notebooks next year. There goes the PS2 installed base advantage, and this can only increase the price advantage of HD DVD over Blu-ray players. If (or when) the tide starts to shift in HD DVD’s favor, I’m sure we’ll find that the Hollywood studios’ commitment to Blu-ray is thinner than a DVD disc.

(Tip of the hat to Steve Sechrist at Insight Media for bringing this to my attention.)

More Big Screens from Olevia

Syntax-Brillian is looking to make some noise for its Olevia brand in the larger sizes, and has announced two new LCD HDTVs. The 247TFHD is a 47″ model that has an MSRP of $1,999. The 265TFHD is 65″, and lists for $6,995. Both have 1080p resolution, a pair of HDMI connectors, and thin bezel design. The 65″ model uses a panel provided by Sharp.

It’s interesting to note where these sets will be sold. According to a company press release, the 47″ model is available at Target and BJ’s, and is expected to show up at Circuit City next month. Perhaps more significant is the fact that the 65″ model is available now at Costco, and soon at Target. Breaking into Costco is an important step, and a bit of a coup given Vizio’s strong position there. Also, it seems a bit strange that Target would take on a $7,000 product, but maybe it’s a fit with its image of being the upscale discount store.

These new models also highlight the discrepencies in pricing between technologies. The 47″ model is priced at $1,999, which is the same price as Olevia’s 65″ LC0S 1080p rear projection set, the 665H. Apparently, consumers are still willing to accept a much smaller screen for the same price, in order to get a flat panel model.

LCD HDTV Wins

Market researched DisplayBank has released its forecasts for the worldwide television market, and they predict that the number of TVs shipped will increase 50% from 196 million this year to 290 million units in 2015. This year, about 38% of those sets will be LCD TVs; by 2015 this proportion is expected to grow to 66%.

So if you’re going to go by the numbers, odds are two out of three that you’ll eventually own an LCD TV. Why is that?

The main reason is that there is no viable competition for smaller sized sets. Only CRT (picture tube) televisions are priced lower than LCDs in the smaller sizes, but the actual dollar difference is so small at that point that many people will opt for the advantages of a thin, sharp LCD image. At the other end, the average selling price of a 52″ 1080p LCD is now lower than that of a 50″ 1080p plasma HDTV. (Plasma still has a distinct price advantage at this size in 720p resolutions, but buyers are clearly moving to 1080p.) So LCD now owns the sizes where the vast majority of the sales are going to occur.

The only thing that could upset DisplayBank’s forecast would be a sudden shift to another technology. If a breakthrough in plasma panel production lowered costs significantly, or if one of the novel technologies — such as OLED – made some major advances, then LCD might not do as well as predicted. But for the moment, it looks as though LCD technology will be the winner.

2007: When to Buy Your HDTV?

One of the most frequent questions I get is “when is the best time to buy an HDTV?” I’ve mentioned this already recently, but I want to give a more detailed explanation of my thoughts on this thorny question.

Note that this forecast is an informed guess, but it’s still a guess. Here’s how I see things playing out. The manufacturers have been building a lot of product, encouraged by the fact that prices have stayed fairly constant over the summer. (Prices for some models have declined sharply, but that was largely the typical result of an older model being replaced by a newer one.) Some retailers such as Circuit City and Tweeter have not had a good year; this holiday buying season is going to be a make-or-break time for many of them, and they’re counting on HDTV sales to carry a large part of the load. Best Buy has already stated that they will do what they have to do to maintain market share. And Wal-Mart is making a much bigger play for HDTV sales this year, with an expanded line-up of top brand products.

If the consumers come out waving wads of cash, all will be well for the manufacturers and retailers. But I don’t think that is going to happen. Yes, the Dow Jones Industrial Average is at an all-time high, but that doesn’t really matter to the bulk of the American buying public. Bigger factors are higher interest rates and the difficulty of getting credit. Without home mortgage refinancing, many families are not going to have ready cash for big ticket items like HDTVs. And with the whispers of recession being spoken out loud, more and more workers are feeling uneasy about the future of their jobs.

So while people will tell you that they really want a flat screen TV this year, they may not be quite so anxious to shell out the bucks to get one. This leads to my big “if”; if consumers don’t start spending on HDTVs in the next five weeks, someone is going to blink. Maybe it will be a manufacturer looking at thousands of sets stuck in warehouses, with factories still churning out thousands more. Maybe it will be a retailer who needs cash flow at any price, or who is concerned that they won’t hit their target market share. But someone will blink. And all the brave talk about not slashing profit margins the way they did last year will go right out the door. One will drop prices, and the others will have to follow.

I think this will happen, and the most likely point to try to “buy” sales with lower prices is Black Friday, the day after Thanksgiving. So if you want a good bargain, wait until then to buy. If the market is as bad as I think it may be, the lower prices will not be a one day or one weekend event, but will carry through the end of the year.

If you’re a gambler and you want to roll the dice for an even better deal and are willing to wait, then the last week of the year may be your best bet. I expect that even with lower prices, the stores will have more inventory than they will want to carry over into 2008, and some may do crazy things to get rid of some of that during the last week of the year. This is far enough in advance of the build-up to the Super Bowl that you may see another round of desperation discounts for that last week of December.

You may know when to buy, but do you know what to buy? The answers are in Professor Poor’s Guide to Buying HDTV, now available in paperback from Amazon or other fine booksellers.

Truth Patrol: EDTV is Analog?

HDTV Truth Patrol

I know I did a Truth Patrol entry last week, but this one is too good to pass up. The WCPO Channel 9 Web site ran a story from the E.W. Scripps Co. about what you can expect to pay for an HDTV. The piece was doing fine until it ran off the tracks at the end:

However, be careful of flat screen TV’s for much under $300: They may look like an HDTV, but may still be analog. For instance, an “EDTV” is really analog, and won’t pick up signals after 2009. Avoid it.

Okay, this is wrong on so many counts. First, any new television sold in this country has to have a digital tuner. If a store is selling old stock that does not have an analog tuner, then it has to have a prominent disclaimer that makes it clear that it will not be able to receive digital broadcasts after most local television broadcasters shut off their analog broadcasts on February 17, 2009. After that time, you’ll need a converter box to receive the free over-the-air local television broadcasts. (It looks as though my prediction of $50 converter boxes is going to be on target, and after the federal government’s $40 rebate coupon, it will cost you $10 or less.)

EDTV is not an analog broadcast resolution. Only standard definition can be broadcast on an analog signal, and that’s an interlaced 480 line resolution. No matter how you define EDTV — either progressive scan 480p standard screen width, or wide 480p with 848 by 480 pixels — it requires a digital signal to convey that much data. You can get that from a DVD player, but not over the air.

EDTVs with just analog tuners do exist, just as HDTVs with just analog tuners exist. But there is nothing about an EDTV that requires it to only have an analog tuner. And any EDTV with a digital tuner is going to work just fine in 2009.

Is anyone surprised that people are confused about this?

Thanks to Rob for sending in this one. You can win a coveted “Truth Patrol” t-shirt if we use an item you send in that manages to get HDTV explanations twisted sideways.

Hi-Def DVD: Confusion Aplenty

I’m the first to admit that getting all the details right is difficult in this business. The biggest problem is that it’s so easy to pass along “common knowledge” items that contain true statements but that are misleading or even wrong in the whole. For example, DisplaySearch is a major market research firm that covers HDTVs and other related technologies. This week, they’re holding their annual HDTV conference in Los Angeles. One of their emails promoting the event emphasized the battle between HD DVD and Blu-ray. The following week, they issued a revised version of the email, which led off with the following:

CORRECTION: It has come to our attention that Blu-ray Disc is not the exclusive next-generation DVD provider to Target and Blockbuster, as indicated in the release we distributed last Friday. HD DVDs can be found in an estimated 250 Blockbuster stores and Blockbuster Online. In addition, Toshiba’s HD DVD players are currently merchandised at Target.com and Microsoft’s HD DVD player is currently merchandised in store and on Target.com. We sincerely apologize for the error on our end and have updated the release accordingly.

Yes, Blockbuster is renting HD DVDs, and Target is selling HD DVD players. The publicity machine of the Blu-ray camp has never claimed otherwise, but has presented its position in a way that implies an exclusive relationship with those companies. The bottom line here is that you have to be careful when working from any press release, and you need to dig a little deeper in order to report accurately. It’s not easy. So if you’re ever puzzled by a claim about some HDTV topic, please write to me at alfred@hdtvprofessor.com and I’ll do my best to get to the bottom of it.

HDTV Guide Now Available in Paperback

I haven’t had a chance to put out a press release about it yet, but not only is Professor Poor’s Guide to Buying HDTV now available in its newly revised Second Edition, just in time for the fall HDTV buying season, but it also is now available in paperback as well as the original ebook version.

You can get the paperback version directly from Amazon. You also should be able to order it through any local bookstore, as it is also available through Ingram. (They should be able to find it by the title, but the ISBN number 978-0-9651975-2-6 will help them find it.)

The paperback version has the exact same content as the electronic version (except the illustrations are black and white in the paper version, instead of color for the electronic version). So if you want a copy to put on your shelf or carry around with you, now you can get it.

Best Buy Survey: Buyers Confused by HDTV

It must be the season for survey results, because here’s another. According to a CNNMoney.com article, Best Buy VP Mike Mohan said “We were getting a lot of anecdotal evidence that showed consumers were frustrated with their HDTV purchases. We felt that we had some gaps in key areas of consumer education.”

I can’t say that I’m terribly surprised by that observation; after all, that’s what moved me to start this HDTV Almanac in the first place. So what did Best Buy discover when they commissioned this survey?

89% of the respondents reported that they lacked a complete understanding of HDTV. That’s not really a news flash; we’ve known all along that people find this confusing, even after they’ve studied it for a while.

The other finding was that 48% failed to budget enough to get the HDTV experience. But that’s not going to stop the presses, either. We’ve known for a long time that half or more of the people with HDTVs aren’t getting an HDTV signal, and many of them don’t even know that they’re not watching HDTV. So it’s no surprise that half the people are not planning an HD cable or satellite subscription to go with their new set.

Depending on how you look at it, this report can be good news. It means that there still are plenty of people out there who need my book.

Are you thinking about getting HD satellite service, but don’t know whether to choose DISH Network or DirecTV? To see a comparison between the two, click here.

Truth Patrol: Radioactive HDTVs?

HDTV Truth Patrol

Okay, maybe I shouldn’t pick on the Nigerian press, especially after all that country has done to help make sure that everyone gets plenty of email. But when I received this item from Vanguard Online, I couldn’t believe that someone would actually publish this:

General Manager of [LG]’s Nigerian operation, Mr. Tae-Joon Park also noted that … “Plasma displays were also said to have short life spans because of the radioactive half-life of the gases they use.”

Excuse me!?! Radioactive half-life? So that’s why plasma screens glow!

Okay, before you all start running for your lead aprons and Geiger counters, there are no radioactive gases in a plasma display. The gases used in these panels are mixtures of inert gases such as argon and neon. They are not radioactive.

Someone got a bit sideways along the track here, but whether it’s the reporter or someone else is anybody’s guess. The early plasma panels did have short life spans. The display industry measures useful life as the time it takes until the amount of light produced by the display drops to half its original value. (For a variety of reasons, it will still look brighter than half as bright as the original level, but that’s another topic.) So somebody took “half-life” and must have assumed that they were talking about radioactive material, which also has a half-life.

The fact is that there is no radioactive gas in a plasma display, and any new panel that you buy will last at least as long as a traditional CRT picture tube television.

Thanks to Jamie for sending in this one. You can win a coveted “Truth Patrol” t-shirt if your submitted HDTV weirdness gets picked for debunking in the HDTV Almanac.